The Hartford 2008 Annual Report Download - page 207

Table of Contents
ONGOING OPERATIONS
Ongoing Operations includes the four underwriting segments of Personal Lines, Small Commercial, Middle Market and
Specialty Commercial.
Operating Summary
Net income for Ongoing Operations includes underwriting results for each of its segments, income from servicing
businesses, net investment income, other expenses and net realized capital gains (losses), net of related income taxes.
Ongoing Operations 2008 2007 2006
Written premiums $ 10,224 $ 10,435 $ 10,658
Change in unearned premium reserve (107) (56) 230
Earned premiums 10,331 10,491 10,428
Losses and loss adjustment expenses
Current accident year before catastrophes 6,390 6,692 6,507
Current accident year catastrophes 543 177 199
Prior accident years (355) (145) (64)
Total losses and loss adjustment expenses 6,578 6,724 6,642
Amortization of deferred policy acquisition costs 2,095 2,104 2,106
Insurance operating costs and expenses 701 694 569
Underwriting results 957 969 1,111
Net servicing income [1] 31 52 53
Net investment income 1,056 1,439 1,225
Net realized capital losses (1,669) (160) (17)
Other expenses (219) (248) (222)
Income before income taxes 156 2,052 2,150
Income tax benefit (expense) 33 (575) (596)
Net income $ 189 $ 1,477 $ 1,554
Loss and loss adjustment expense ratio
Current accident year before catastrophes 61.9 63.8 62.4
Current accident year catastrophes 5.3 1.7 1.9
Prior accident years (3.4) (1.4) (0.6)
Total loss and loss adjustment expense ratio 63.7 64.1 63.7
Expense ratio 26.6 26.3 25.6
Policyholder dividend ratio 0.5 0.4 0.1
Combined ratio 90.7 90.8 89.3
Catastrophe ratio
Current accident year 5.3 1.7 1.9
Prior accident years (0.2) 0.1 (0.7)
Total catastrophe ratio 5.0 1.8 1.2
Combined ratio before catastrophes 85.7 89.0 88.1
Combined ratio before catastrophes and prior accident year
development 88.9 90.5 88.0
[1] Net of expenses related to service business.
Year ended December 31, 2008 compared to the year ended December 31, 2007
Net income
Net income decreased by $1,288, from $1,477 in 2007 to $189 in 2008, due primarily to an increase in net realized capital
losses and a decrease in net investment income.
Net realized capital losses increased by $1,509
The increase in net realized capital losses of $1,509 in 2008 was primarily due to realized losses in 2008 from impairments
of subordinated fixed maturities and preferred equity securities in the financial services sector as well as of securitized
assets. (See the Other-Than-Temporary Impairments discussion within “Investment Results” in the “Investments” section of
the MD&A for more information on the impairments recorded in 2008).
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Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009