The Hartford 2008 Annual Report Download - page 180

investment portfolios are maintained within Other Operations for the runoff of international assumed reinsurance claims and
for the runoff business of Heritage Holdings, Inc., including its subsidiaries, Excess Insurance Company Ltd., First State
Insurance Company and Heritage Reinsurance Company, Ltd. Within the Hartford Fire Insurance Pool, invested assets are
attributed to Ongoing Operations and Other Operations pursuant to the Company’s capital attribution process.
The Hartford attributes capital to each line of business or segment using an internally-developed, risk-based capital
attribution methodology that incorporates management’s assessment of the relative risks within each line of business or
segment, as well as the capital requirements of external parties, such as regulators and rating agencies. Net investment
income earned on the Hartford Fire invested asset portfolio is allocated between Ongoing Operations and Other Operations
based on the allocation of invested assets to each segment and the expected investment yields earned by each segment. Net
investment income earned on the separate portfolios within Other Operations is recorded entirely within Other Operations.
Based on the Company’s method of allocating net investment income for the Hartford Fire Insurance Pool and the net
investment income earned by Other Operations on its separate investment portfolios, in 2008, the after-tax investment yield
for Ongoing Operations was 3.2% and the after-tax investment yield for Other Operations was 3.6%.
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Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009