The Hartford 2008 Annual Report Download - page 404

Table of Contents
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
5. Investments and Derivative Instruments (continued)
Concentration of Credit Risk
The Company aims to maintain a diversified investment portfolio including issuer, sector and geographic stratification,
where applicable, and has established certain exposure limits, diversification standards and review procedures to mitigate
credit risk.
Other than U.S. government and certain U.S. government agencies backed by the full faith and credit of the U.S.
government, the Company’s only exposure to any credit concentration risk of a single issuer greater than 10% of the
Company’s stockholders’ equity is the Government of Japan, which represents $2.3 billion, or 25%, of stockholders’ equity,
and less than 2.0% of total invested assets. The Company’s second and third largest exposures by issuer as of December 31,
2008 were the Government of Canada and JP Morgan Chase & Company, which each comprise less than 0.5%, of total
invested assets. Other than U.S. government and certain U.S. government agencies, the Company’s largest three exposures
by issuer as of December 31, 2007 were the State of California, General Electric Company and the State of Massachusetts,
which each comprise less than 0.5%, of total invested assets.
The Company’s largest three exposures by sector, as of December 31, 2008 were commercial mortgage and real estate, basic
industry, and state municipalities and political subdivisions which comprised approximately 13%, 9%, and 9%, respectively,
of total invested assets. The Company’s largest three exposures by sector, as of December 31, 2007 were commercial
mortgage and real estate, state municipalities and political subdivisions, and financial services which comprised
approximately 18%, 10%, and 10%, respectively, of total invested assets.
The Company’s investments in states, municipalities and political subdivisions are geographically dispersed throughout the
United States. The largest concentrations, as of December 31, 2008 and 2007, were in California, New York and Illinois
which each comprise less than 1.5% and 2%, respectively, of total invested assets.
Security Unrealized Loss Aging
As part of the Company’s ongoing security monitoring process by a committee of investment and accounting professionals,
the Company identifies securities in an unrealized loss position that could potentially be other-than-temporarily impaired.
For further discussion regarding the Company’s other-than-temporary impairment policy, see the Other-Than-Temporary
Impairments on Available-for-Sale Securities section of Note 1. Due to the issuers’ continued satisfaction of the securities’
obligations in accordance with their contractual terms and the expectation that they will continue to do so, management’s
intent and ability to hold these securities for a period of time sufficient to allow for any anticipated recovery in fair value, as
well as the evaluation of the fundamentals of the issuers’ financial condition and other objective evidence, the Company
believes that the prices of the securities in the sectors identified in the tables below were temporarily depressed as of
December 31, 2008 and 2007.
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Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009