The Hartford 2008 Annual Report Download - page 135

• The decrease in Individual Life’s after-tax margin, excluding realized gains (losses) and the effect of the DAC Unlock,
was due to lower net investment income from limited partnership and other alternative investments, unfavorable
mortality expense, reduced net investment income associated with a more efficient capital approach for our secondary
guarantee universal life business which released assets supporting capital and lower variable life insurance fees from
equity market declines, partially offset by life insurance in-force growth, lower credited rates and higher surrender
charges.
• The decrease in Retirement Plans ROA, excluding realized gains (losses) and the effect of the DAC Unlock, was
primarily driven by an increase in assets under management due to the acquired rights to service $18.7 billion in mutual
funds, comprised of $15.8 billion in mutual funds from Sun Life Retirement Services, Inc., and $2.9 billion in mutual
funds from Princeton Retirement Group, both of which closed in the first quarter of 2008. The acquired blocks of assets
produce a lower ROA as they are comprised of mutual fund assets and assets under administration as opposed to
traditional annuity contracts. Also contributing to the decrease was lower yields on fixed maturity investments and a
decline in limited partnership and other alternative investment income, higher service and technology costs and
additional expenses associated with the acquisitions. Partially offsetting these decreases were tax benefits primarily
associated with DRD.
75
Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009