The Hartford 2008 Annual Report Download - page 163

Table of Contents
Year ended December 31, 2008 compared to the year ended December 31, 2007
Earned Premiums
Total Property & Casualty earned premiums decreased $158, or 2%, primarily due to lower earned premiums in Middle
Market and Specialty Commercial, partially offset by increased earned premiums in Personal Lines.
Personal Lines • Earned premium grew by $37, or 1%, due to a $97, or 4%, increase in AARP earned
premiums, partially offset by a $60, or 5%, decrease in Agency and other earned
premiums. AARP earned premiums grew primarily due to modest earned pricing
increases for both auto and homeowners and the effect of new business premium
outpacing non-renewals in the last nine months of 2007. Agency earned premium
decreased $43, or 4%, largely due to a decline in new business premium and premium
renewal retention since the middle of 2007, partially offset by the effect of modest earned
pricing increases.
Small Commercial • Earned premium decreased slightly, to $2,724, as a decrease in commercial auto was
largely offset by an increase in worker’s compensation. Earned premium decreases were
largely due to the effect of non-renewals outpacing new business for commercial auto
business in 2008 and to earned pricing decreases, largely offset by new business
outpacing non-renewals in workers’ compensation business over the last nine months of
2007 and first nine months of 2008.
Middle Market • Earned premium decreased by $121, or 5%, driven primarily by decreases in commercial
auto, workers’ compensation and general liability. Earned premium decreases were
driven primarily by a decline in earned pricing in 2008 and the effect of non-renewals
outpacing new business in commercial auto and general liability over the last nine
months of 2007 and first nine months of 2008, partially offset by the effect of new
business outpacing non-renewals in workers’ compensation since the fourth quarter of
2007.
Specialty Commercial • Earned premium decreased by $64, or 4%, driven primarily by a decrease in property
earned premiums and, to a lesser extent, casualty earned premiums. Property earned
premiums decreased due largely to the Company’s decision to stop writing specialty
property business with large, national accounts and lower new business and renewal
retention for core excess and surplus lines business. Casualty earned premiums decreased
primarily because of lower earned premium from captive programs and a decline in new
business premium on loss-sensitive business written with larger accounts over the last
nine months of 2007 and first three months of 2008.
Year ended December 31, 2007 compared to the year ended December 31, 2006
Earned Premiums
Total Property & Casualty earned premiums increased by $63 due to an increase in Personal Lines and Small Commercial,
partially offset by a decrease in Middle Market and Specialty Commercial.
Personal Lines • Earned premium grew by $129, or 3%, primarily due to an increase in AARP and
Agency earned premiums. AARP earned premium grew primarily due to an increase in
the size of the AARP target market, the effect of direct marketing programs and the effect
of cross selling homeowners insurance to insureds who have auto policies. Agency
earned premium grew as a result of an increase in the number of agency appointments
and further refinement of the Dimensions class plans. Partially offsetting this growth was
the effect of the sale of the Omni non-standard auto business in the fourth quarter of 2006
which accounted for $127 of earned premium in 2006. Excluding Omni, Personal Lines’
earned premiums grew $251, or 7%, for the year ended December 31, 2007.
Small Commercial • Earned premium increased $84, or 3%, primarily due to new business premiums
outpacing non-renewals for workers’ compensation business over the last six months of
2006 and the first six months of 2007.
Middle Market • Earned premium decreased by $103, or 4%, driven by decreases in all lines, including
commercial auto, general liability, workers’ compensation and property. Earned premium
decreases were driven by declines in earned pricing and premium renewal retention in all
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009