The Hartford 2008 Annual Report Download - page 219

Table of Contents
The earned premium growth in AARP and Agency was primarily due to auto and homeowners new business written
premium outpacing non-renewals over the last six months of 2006 and the first six months of 2007.
Auto earned premium grew slightly, by $30, or 1%, for the year ended December 31, 2007, primarily due to new business
outpacing non-renewals in AARP and Agency over the last six months of 2006 and the first six months of 2007, partially
offset by the effect of the sale of Omni. Before considering the effect of the sale of Omni, auto earned premium grew $152,
or 6%, for the year ended December 31, 2007. Homeowners’ earned premium grew $99, or 10%, primarily due to earned
pricing increases and due to new business outpacing non-renewals in AARP business over the last six months of 2006 and
the first six months of 2007 and new business outpacing non-renewals in Agency over the last three months of 2006 and the
first six months of 2007.
New business premium • Omni accounted for $25 of new business written premium during the 2006
calendar year. Excluding Omni business, auto new business written premium
decreased by $20, or 5%, to $424, for the year ended December 31, 2007. The
decrease in auto new business premium was due to a decrease in AARP and
Agency auto new business as a result of increased competition. Homeowners’ new
business written premium decreased by $21, or 13%, primarily due to a decrease in
Agency new business, partially offset by an increase in AARP new business.
Premium renewal retention • Premium renewal retention for auto increased from 87% to 88% for the year ended
December 31, 2007, primarily due to the sale of the Omni non-standard auto
business during 2006, which had a lower premium renewal retention than the
Company’s standard auto business. Excluding Omni business, premium renewal
retention decreased slightly, from 89% to 88%, as renewal retention remained flat
in AARP and decreased in Agency. Premium renewal retention for homeowners
increased from 94% to 96% for the year ended December 31, 2007, primarily due
to an increase in retention of Agency business.
Earned pricing increase
(decrease)
• The trend in earned pricing during 2007 was primarily a reflection of the written
pricing changes in the last six months of 2006 and the first six months of 2007.
Written pricing remained flat in auto primarily due to an extended period of
favorable results factoring into the rate setting process. Homeowners’ written
pricing continued to increase due largely to increases in insurance to value and an
increase in the value of insured properties. Insurance to value is the ratio of the
amount of insurance purchased to the value of the insured property.
Policies in-force • Consistent with the growth in earned premium, the number of policies in-force has
increased in auto and homeowners. The growth in policies in-force does not
correspond directly with the growth in earned premiums due to the effect of earned
pricing changes and because policy in-force counts are as of a point in time rather
than over a period of time.
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Source: HARTFORD FINANCIAL S, 10-K, February 12, 2009