The Hartford 2008 Annual Report Download - page 8

Table of Contents
PART I
Item 1. BUSINESS
(Dollar amounts in millions, except for per share data, unless otherwise stated)
General
The Hartford Financial Services Group, Inc. (together with its subsidiaries, “The Hartford” or the “Company”) is an
insurance and financial services company. The Hartford, headquartered in Connecticut, is among the largest providers of
investment products, individual life, group life and group disability insurance products, and property and casualty insurance
products in the United States. Hartford Fire Insurance Company, founded in 1810, is the oldest of The Hartford’s
subsidiaries. The Hartford writes insurance in the United States and internationally. At December 31, 2008, total assets and
total stockholders’ equity of The Hartford were $287.6 billion and $9.3 billion, respectively.
Organization
The Hartford strives to maintain and enhance its position as a market leader within the financial services industry. The
Company sells diverse and innovative products through multiple distribution channels to consumers and businesses. The
Company is continuously seeking to develop and expand its distribution channels, achieve cost efficiencies through
improved technology, and capitalize on its brand name and The Hartford Stag Logo, one of the most recognized symbols in
the financial services industry.
As a holding company that is separate and distinct from its subsidiaries, The Hartford Financial Services Group, Inc. has no
significant business operations of its own. Therefore, it relies on the dividends from its insurance companies and other
subsidiaries as the principal source of cash flow to meet its obligations. Additional information regarding the cash flow and
liquidity needs of The Hartford Financial Services Group, Inc. may be found in the Capital Resources and Liquidity section
of Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”).
The Company maintains a retail mutual fund operation, whereby the Company, through wholly-owned subsidiaries,
provides investment management and administrative services to The Hartford Mutual Funds, Inc. and The Hartford Mutual
Funds II, Inc (“The mutual funds”), families of 62 mutual funds and 1 closed end fund. The Company charges fees to the
shareholders of the mutual funds, which are recorded as revenue by the Company. Investors can purchase “shares” in the
mutual funds, all of which are registered with the Securities and Exchange Commission (“SEC”), in accordance with the
Investment Company Act of 1940.
The mutual funds are owned by the shareholders of those funds and not by the Company. As such, the mutual fund assets
and liabilities and related investment returns are not reflected in the Company’s consolidated financial statements since they
are not assets, liabilities and operations of the Company.
Reporting Segments
The Hartford is organized into two major operations: Life and Property & Casualty, each containing reporting segments.
Within the Life and Property & Casualty operations, The Hartford conducts business principally in eleven reporting
segments. Corporate primarily includes the Company’s debt financing and related interest expense, as well as other capital
raising activities and purchase accounting adjustments.
Life is organized into four groups which are comprised of six reporting segments: The Retail Products Group (“Retail”) and
Individual Life segments make up the Individual Markets Group. The Retirement Plans and Group Benefits segments make
up the Employer Markets Group. The International and Institutional Solutions Group (“Institutional”) segments each make
up their own group.
Life includes in an Other category its leveraged private placement life insurance (“PPLI”) product line of business; corporate
items not directly allocated to any of its reportable operating segments; inter-segment eliminations; and the mark-to-market
adjustment for the International variable annuity account assets that are classified as equity securities held for trading
reported in net investment income and the related change in interest credited reported as a component of benefits, losses and
loss adjustment expenses.
Property & Casualty is organized into five reporting segments: the underwriting segments of Personal Lines, Small
Commercial, Middle Market and Specialty Commercial (collectively “Ongoing Operations”); and the Other Operations
segment.
A measure of profit or loss used by The Hartford’s management in evaluating the performance of its Life segments is net
income (loss). Likewise, within Property & Casualty, net income (loss) is a measure of profit or loss used in evaluating the
performance of Total Property & Casualty, Ongoing Operations and the Other Operations segment. Within Ongoing
Operations, the underwriting segments of Personal Lines, Small Commercial, Middle Market and Specialty Commercial are
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009