The Hartford 2011 Annual Report Download - page 72
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72
After-tax margin
After-tax margin is a key indicator of overall profitability for the Individual Life and Group Benefits reporting segments as a significant
portion of their earnings are a result of the net margin from losses incurred on earned premiums, fees and other considerations.
2011
2010
2009
Individual Life
After-tax margin
9.6%
17.9%
1.3%
Effect of net realized gains (losses), net of tax and DAC on after-tax margin
1.3%
1.3%
(6.6%)
Effect of Unlock on after-tax margin
(5.5%)
1.7%
(4.7%)
After-tax margin, core earnings excluding Unlock
13.8%
14.9%
12.6%
Group Benefits
After-tax margin (excluding buyouts)
2.0%
3.9%
4.2%
Effect of net realized gains (losses), net of tax on after-tax margin
0.1%
0.5%
(1.5%)
After-tax margin (excluding buyouts), excluding realized gains (losses)
1.9%
3.4%
5.7%
Year ended December 31, 2011 compared to year ended December 31, 2010
• Individual Life’ s after-tax margin, core earnings excluding Unlock, decrease was primarily due to increased benefits, losses and
expenses and increased mortality costs, partially offset by increased net investment income.
• The decrease in Group Benefits’ after-tax margin (excluding buyouts), excluding realized gains (losses), was primarily due to
higher mortality and morbidity driven by elevated incidence and lower claim terminations, and to a lesser extent, a decrease in fully
insured ongoing premiums, driven by lower sales over the past year, as well as from a challenging economic environment.
Year ended December 31, 2010 compared to year ended December 31, 2009
• Individual Life’ s after-tax margin, core earnings excluding Unlock, increase was primarily due to lower DAC amortization and net
realized capital gains in 2010 compared to net realized capital losses in 2009.
• Group Benefits’ after-tax margin (excluding buyouts), excluding realized gains (losses), decrease was primarily due to a higher loss
ratio from unfavorable morbidity driven by lower claim terminations on disability business.