The Hartford 2015 Annual Report Download - page 72

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72
Written and Earned Premiums
Written premium is a statutory accounting financial measure which represents the amount of premiums charged for policies issued, net
of reinsurance, during a fiscal period. Earned premium is a U.S. GAAP and statutory measure. Premiums are considered earned and are
included in the financial results on a pro rata basis over the policy period. Management believes that written premium is a performance
measure that is useful to investors as it reflects current trends in the Company’s sale of property and casualty insurance products. Written
and earned premium are recorded net of ceded reinsurance premium.
Traditional life insurance type products, such as those sold by Group Benefits, collect premiums from policyholders in exchange for
financial protection for the policyholder from a specified insurable loss, such as death or disability. These premiums together with net
investment income earned from the overall investment strategy are used to pay the contractual obligations under these insurance
contracts. Two major factors, new sales and persistency, impact premium growth. Sales can increase or decrease in a given year based on
a number of factors, including but not limited to, customer demand for the Company’s product offerings, pricing competition,
distribution channels and the Company’s reputation and ratings. Persistency refers to the percentage of policies remaining in-force from
year-to-year.