The Hartford 2008 Annual Report Download - page 146

Table of Contents
INDIVIDUAL LIFE
Operating Summary 2008 2007 2006
Fee income and other $ 899 $ 870 $ 885
Earned premiums (71) (62) (53)
Net investment income 338 359 324
Net realized capital losses (252) (28) (25)
Total revenues 914 1,139 1,131
Benefits, losses and loss adjustment expenses 627 562 497
Insurance operating costs and other expenses 202 193 179
Amortization of deferred policy acquisition costs and present value
of future profits 169 121 243
Total benefits, losses and expenses 998 876 919
Income (loss) before income taxes (84) 263 212
Income tax expense (benefit) (41) 81 62
Net income (loss) $ (43) $ 182 $ 150
Account Values 2008 2007 2006
Variable universal life insurance $ 4,802 $ 7,284 $ 6,637
Universal life/interest sensitive whole life 4,727 4,388 4,035
Modified guaranteed life and other 653 677 699
Total account values $ 10,182 $ 12,349 $ 11,371
Life Insurance In-force
Variable universal life insurance $ 78,853 $ 77,566 $ 73,770
Universal life/interest sensitive whole life 52,356 48,636 45,230
Term life 63,334 52,298 44,175
Modified guaranteed life and other 921 983 1,052
Total life insurance in-force $ 195,464 $ 179,483 $ 164,227
Individual Life provides life insurance solutions to a wide array of business intermediaries to solve the wealth protection,
accumulation and transfer needs of their affluent, emerging affluent and small business insurance clients.
Year ended December 31, 2008 compared to the year ended December 31, 2007
Net income decreased for the year ended December 31, 2008, driven primarily by significantly higher realized capital losses
and the impacts of the Unlock in the third quarter of 2008 as compared to the third quarter of 2007. For further discussion on
the Unlock, see Unlock and Sensitivity Analysis in the Critical Accounting Estimates section of the MD&A. For further
discussion of net realized capital losses, see Realized Capital Gains and Losses by Segment table under Life’s Operating
Section of the MD&A. The following other factors contributed to the changes in net income:
Fee income and other • Fee income and other increased primarily due to an increase in cost of insurance charges of
$45 as a result of growth in guaranteed universal life insurance in-force and fees on higher
surrenders of $12 due to internal exchanges from non-guaranteed universal life insurance
to variable universal life insurance. Partially offsetting these increases are the impacts of
the 2008 and 2007 Unlocks as well as lower variable life fees as a result of equity market
declines.
Earned premiums • Earned premiums, which include premiums for ceded reinsurance, decreased primarily due
to increased ceded reinsurance premiums due to life insurance in-force growth.
Net investment income • Net investment income decreased primarily due to lower income from limited partnership
and other alternative investments, lower yields on fixed maturity investments, and reduced
net investment income associated with a more efficient capital approach for our secondary
guarantee universal life business, which released assets supporting capital and the related
net investment income earned on those assets (described further in the “Outlook” section),
partially offset by growth in general account values.
Benefits, losses and
loss adjustment
expenses
• Benefits, losses and loss adjustment expenses increased as a result of higher death benefits
consistent with a larger life insurance in-force and unfavorable mortality, as well as the
impact of the 2008 Unlock.
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Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009