The Hartford 2015 Annual Report Download - page 5

5
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”, the “Company”, “we”, or “our”) is a holding
company for a group of subsidiaries that provide property and casualty insurance, group benefits and mutual funds to individual and
business customers in the United States and continues to administer life and annuity products previously sold. The Hartford is
headquartered in Connecticut and its oldest subsidiary, Hartford Fire Insurance Company, dates to 1810. At December 31, 2015, total
assets and total stockholders’ equity of The Hartford were $228 billion and $17.6 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 individuals and businesses. The Company seeks on an ongoing
basis to develop and expand its distribution channels, achieving cost efficiencies through economies of scale and investments in
technology, and capitalize on the strength of its brand, including The Hartford Stag logo, one of the most recognized symbols in the
financial services industry.
As a holding company, The Hartford Financial Services Group, Inc. is separate and distinct from its subsidiaries and 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, pay dividends and repurchase common stock. Information regarding the cash flow and
liquidity needs of The Hartford Financial Services Group, Inc. may be found in Part II, Item 7, Management’s Discussion and Analysis
of Financial Condition and Results of Operations (“MD&A”) — Capital Resources and Liquidity.
Reporting Segments
The Hartford conducts business principally in six reporting segments including Commercial Lines, Personal Lines, Property & Casualty
Other Operations, Group Benefits, Mutual Funds and Talcott Resolution, as well as a Corporate category. The Hartford includes in its
Corporate category the Company’s capital raising activities (including debt financing and related interest expense), purchase accounting
adjustments related to goodwill and other expenses not allocated to the reporting segments.
The following discussion describes the principal products and services, marketing and distribution, and competition of The Hartford's
reporting segments. For further discussion of the reporting segments, including financial disclosures of revenues by product line, net
income (loss), and assets for each reporting segment, see Note 3 - Segment Information of Notes to Consolidated Financial Statements.
Commercial Lines
Principal Products and Services
Commercial Lines provides workers’ compensation, property, automobile, liability, umbrella, marine and livestock insurance products to
businesses, primarily throughout the United States. The Commercial Lines segment includes three lines of business: small commercial;
middle market; and specialty. The majority of Commercial Lines written premium is generated by small commercial and middle market,
which provide coverage options and customized pricing based on the policyholder’s individualized risk characteristics. Specialty
provides a variety of customized insurance products and services including workers’ compensation, automobile, general liability,
professional liability, bond, and specialty casualty coverages.
Small commercial provides workers' compensation, automobile, property and liability coverages for small businesses. The Company
considers small businesses those with annual payroll under $12, revenues under $25 and property values less than $20 per location.
Property and liability coverages are offered as part of a single package policy, marketed under the Spectrum name. Middle market
provides medium-sized businesses, which are companies whose payroll, revenue and property values exceed the small business
definition, with workers’ compensation, property, automobile, liability, umbrella, marine and livestock coverages.
Within specialty, a significant portion of the business is written through large deductible programs for national accounts. The business
also provides retrospectively-rated programs where the premiums are adjustable based on loss experience. The financial products
business provides management and professional liability products including D&O (directors and officers) and E&O (errors and
omissions) insurance. The bond business provides businesses with contract surety bonds, commercial surety and fidelity coverage. The
captive programs business provides tailored programs primarily to customers with common risk characteristics and those seeking a loss
sensitive solution.