The Hartford 2014 Annual Report Download - page 78

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Results of Operations
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Written premiums $ 2 $ 2 $ 8
Change in unearned premium reserve 1 1 10
Earned premiums 1 1 (2)
Losses and loss adjustment expenses
Prior accident years 261 148 65
Total losses and loss adjustment expenses 261 148 65
Underwriting expenses 37 29 34
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Net servicing expense — (1) —
Net investment income 129 141 149
Net realized capital gains 3 12 17
Other income 6 2 6
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Income tax expense (benefit) (51) (20) 14
      
Year ended December 31, 2014 compared to the year ended December 31, 2013
Net loss, as compared to the prior year period, increased in 2014 primarily due to an increase in net asbestos and environmental reserve strengthening. As part
of its annual ground-up asbestos and environmental reserve evaluations in 2014, the Company strengthened its associated reserves by $212 and $27, before
tax, respectively. In 2013, the Company strengthened its net asbestos and environmental reserves by $130 and $10, before tax, respectively.
Year ended December 31, 2013 compared to the year ended December 31, 2012
Net income, as compared to the prior year period, decreased in 2013 primarily due to net asbestos and environmental reserve strengthening. As part of its
annual ground-up asbestos and environmental reserve evaluations in 2013, the Company strengthened its associated reserves by $130 and $10, before tax,
respectively. In 2012, the Company strengthened its net asbestos and environmental reserves by $48 and $3, before tax, respectively.
The effective tax rates in 2014, 2013 and 2012 differ from the U.S. Federal statutory rate of 35% primarily due to permanent differences related to investments
in tax exempt securities. For further discussion of income taxes, see the Income Taxes section within Note 1 - Basis of Presentation and Significant
Accounting Policies of Notes to Consolidated Financial Statements.
For information on net asbestos and environmental reserves, see Property & Casualty Other Operations Claims within the Property and Casualty Insurance
Product Reserves, Net of Reinsurance section in Critical Accounting Estimates.
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