The Hartford 2007 Annual Report Download - page 3

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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” or the “Company”) is a diversified
insurance and financial services company. The Hartford, headquartered in Connecticut, is among the largest providers of investment
products, individual life, group life and group disability insurance products, and property and casualty insurance products in the United
States. Hartford Fire Insurance Company, founded in 1810, is the oldest of The Hartford’ s subsidiaries. The Hartford writes insurance
in the United States and internationally. At December 31, 2007, total assets and total stockholders’ equity of The Hartford were $360.4
billion and $19.2 billion, respectively.
Organization
The Hartford strives to maintain and enhance its position as a market leader within the financial services industry, while effectively
managing risks to drive long term shareholder value. The Company pursues a strategy of developing and selling diverse and innovative
products through multiple distribution channels to consumers and businesses. The Company is continuously developing and expanding
its distribution channels, achieving cost efficiencies through economies of scale and improved technology, and capitalizing on its brand
name and The Hartford Stag Logo, one of the most recognized symbols in the financial services industry.
As a holding company that is separate and distinct from its subsidiaries, The Hartford Financial Services Group, Inc. 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. Additional information regarding the cash flow and liquidity needs of The Hartford
Financial Services Group, Inc. may be found in the Capital Resources and Liquidity section of Item 7, Management’ s Discussion and
Analysis of Financial Condition and Results of Operations (“MD&A”).
The Company maintains a retail mutual fund operation, whereby the Company, through wholly-owned subsidiaries, provides
investment management and administrative services to The Hartford Mutual Funds, Inc. and The Hartford Mutual Funds II, Inc. (“The
Hartford mutual funds”) families of 54 mutual funds and 1 closed end fund. Investors can purchase “shares” in The Hartford mutual
funds, all of which are registered with the Securities and Exchange Commission in accordance with the Investment Company Act of
1940. The Hartford mutual funds are owned by the shareholders of those funds and not by the Company.
Reporting Segments
The Hartford is organized into two major operations: Life and Property & Casualty, each containing reporting segments. Within the
Life and Property & Casualty operations, The Hartford conducts business principally in eleven reporting segments. Corporate
primarily includes the Company’ s debt financing and related interest expense, as well as other capital raising activities and purchase
accounting adjustments.
Life is organized into six reporting segments: Retail Products Group (“Retail”), Retirement Plans, Institutional Solutions Group
(“Institutional”), Individual Life, Group Benefits and International. In 2007, Life changed its reporting for realized gains and losses, as
well as credit risk charges previously allocated between Life Other and each of Life’ s reporting segments. All segment data for prior
reporting periods have been adjusted to reflect the current segment reporting.
Retail offers individual variable and fixed market value adjusted (“MVA”) annuities, retail mutual funds, 529 college savings plans,
Canadian and offshore investment products.
Retirement Plans provides products and services to corporations pursuant to Section 401(k) and products and services to municipalities
and not-for-profit organizations under Section 457 and 403(b) of the IRS code.
Institutional primarily offers institutional liability products, including stable value products and institutional annuities (primarily
terminal funding cases), as well as variable Private Placement Life Insurance (“PPLI”) owned by corporations and high net worth
individuals. Institutional also offers mutual funds to institutional investors. Furthermore, Institutional offers additional individual
products including structured settlements, consumer notes and single premium immediate annuities and longevity assurance.
Individual Life sells a variety of life insurance products, including variable universal life, universal life, interest sensitive whole life and
term life.
Group Benefits provides individual members of employer groups, associations, affinity groups and financial institutions with group life,
accident and disability coverage, along with other products and services, including voluntary benefits and group retiree health.
International, which has operations located in Japan, Brazil, Ireland and the United Kingdom, provides investments, retirement savings
and other insurance and savings products to individuals and groups outside the United States and Canada.
Life includes in an Other category its leveraged PPLI product line of business; corporate items not directly allocated to any of its
reporting segments; inter-segment eliminations and the mark-to-market adjustment for the International variable annuity assets that are
classified as equity securities held for trading reported in net investment income and the related change in interest credited reported as a