The Hartford 2010 Annual Report Download - page 5

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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 an insurance and
financial services company. The Hartford, headquartered in Connecticut, is among the largest providers of investment products and life,
property, and casualty insurance to both individual and business customers in the United States of America. Also, The Hartford
continues to administer business previously sold in Japan and the United Kingdom. Hartford Fire Insurance Company, founded in 1810,
is the oldest of The Hartford’ s subsidiaries. At December 31, 2010, total assets and total stockholders’ equity of The Hartford were
$318.3 billion and $20.3 billion, respectively.
Organization
The Hartford strives to maintain and enhance its position as a market leader within the financial services industry. The Company sells
diverse and innovative products through multiple distribution channels to consumers and businesses. The Company is continuously
seeking to develop and expand its distribution channels, achieving cost efficiencies through economies of scale and improved
technology, and capitalizes on its brand name and The Hartford Stag Logo, one of the most recognized symbols in the financial services
industry. In 2009, the Company announced it would focus on its U.S. businesses and suspended sales in Japan and the United Kingdom.
In 2010, the Company announced a customer-oriented strategy and established three divisions Commercial Markets, Consumer Markets,
and Wealth Management. In 2010, the Company announced the sale of two businesses that are not core to its focus and strategy: its
Canadian mutual fund business, Hartford Investments Canada Corporation, and Specialty Risk Services, LLC, a third-party
administrator for claims administration (scheduled to close in 2011). Going forward, the Company intends to continue evaluating its
businesses and may make additional divestitures of businesses and assets that are outside its focus or not necessary to the
implementation of its strategy.
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 Part II, 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. (collectively,
“mutual funds”), consisting of 52 mutual funds, as of December 31, 2010. The Company charges fees to these mutual funds, which are
recorded as revenue by the Company. These mutual funds are registered with the Securities and Exchange Commission (“SEC”) under
the Investment Company Act of 1940. The mutual funds are owned by the shareholders of those funds and not by the Company.
Reporting Segments
The Hartford made changes to its reporting segments in 2010 to reflect the manner in which the Company is currently organized for
purposes of making operating decisions and assessing performance. Accordingly, segment data for prior reporting periods has been
adjusted to reflect the new segment reporting. As a result, the Company created three customer-oriented divisions, Commercial
Markets, Consumer Markets and Wealth Management, conducting business principally in seven reporting segments. The Hartford
includes in Corporate and Other the Company’ s debt financing and related interest expense, as well as other capital raising activities;
banking operations; certain fee income and commission expenses associated with sales of non-proprietary products by broker-dealer
subsidiaries; and certain purchase accounting adjustments and other charges not allocated to the reporting segments. Also included in
Corporate and Other is the Company’ s management of certain property and casualty operations that have discontinued writing new
business and substantially all of the Company’ s asbestos and environmental exposures, collectively referred to as Other Operations.
The following discussion describes the principal products and services, marketing and distribution, and competition of each of the three
divisions of The Hartford. For further discussion on changes to reporting segments in 2010, as well as financial disclosures on revenues
by product, net income (loss), and assets for each reporting segment, see Note 3 of the Notes to Consolidated Financial Statements.