The Hartford 2014 Annual Report Download - page 3


Certain of the statements contained herein are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,”
“expects,” “projects,” and similar references to future periods.
Forward-looking statements are based on our current expectations and assumptions regarding economic, competitive, legislative and other developments.
Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to
predict. They have been made based upon management’s expectations and beliefs concerning future developments and their potential effect upon The
Hartford Financial Services Group, Inc. and its subsidiaries (collectively, the “Company” or “The Hartford”). Future developments may not be in line with
management’s expectations or may have unanticipated effects. Actual results could differ materially from expectations, depending on the evolution of
various factors, including those set forth in Part I, Item 1A. Risk Factors, in Part II, Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations, and those identified from time to time in our other filings with the Securities and Exchange Commission. These important risks and
uncertainties include:
•challenges related to the Company’s current operating environment, including global political, economic and market conditions, and the effect of
financial market disruptions, economic downturns or other potentially adverse macroeconomic developments on the attractiveness of our products, the
returns in our investment portfolios and the hedging costs associated with our variable annuities business;
• the risks, challenges and uncertainties associated with our capital management plan, expense reduction initiatives and other actions, which may
include acquisitions, divestitures or restructurings;
• financial risk related to the continued reinvestment of our investment portfolios and performance of our hedge program for our runoff annuity block;
• market risks associated with our business, including changes in interest rates, credit spreads, equity prices, market volatility and foreign exchange rates,
commodities prices and implied volatility levels, as well as continuing uncertainty in key sectors such as the global real estate market;
• the possibility of unfavorable loss development including with respect to long-tailed exposures;
• the possibility of a pandemic, earthquake, or other natural or man-made disaster that may adversely affect our businesses;
• weather and other natural physical events, including the severity and frequency of storms, hail, winter storms, hurricanes and tropical storms, as well as
climate change and its potential impact on weather patterns;
• risk associated with the use of analytical models in making decisions in key areas such as underwriting, capital, hedging, reserving, and catastrophe
risk management;
• the uncertain effects of emerging claim and coverage issues;
• the Company’s ability to effectively price its property and casualty policies, including its ability to obtain regulatory consents to pricing actions or to
non-renewal or withdrawal of certain product lines;
• the impact on our statutory capital of various factors, including many that are outside the Company’s control, which can in turn affect our credit and
financial strength ratings, cost of capital, regulatory compliance and other aspects of our business and results;
• risks to our business, financial position, prospects and results associated with negative rating actions or downgrades in the Company’s financial
strength and credit ratings or negative rating actions or downgrades relating to our investments;
• the impact on our investment portfolio if our investment portfolio is concentrated in any particular segment of the economy;
• volatility in our statutory and United States ("U.S.") GAAP earnings and potential material changes to our results resulting from our adjustment of our
risk management program to emphasize protection of economic value;
• the potential for differing interpretations of the methodologies, estimations and assumptions that underlie the valuation of the Company’s financial
instruments that could result in changes to investment valuations;
• the subjective determinations that underlie the Company’s evaluation of other-than-temporary impairments on available-for-sale securities;
• losses due to nonperformance or defaults by others, including reinsurers, sourcing partners, derivative counterparties and other third parties;
• the potential for further acceleration of deferred policy acquisition cost amortization;
3