The Hartford 2010 Annual Report Download - page 9

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Principal Products and Services
Global Annuity offers individual variable, fixed market value adjusted (“fixed MVA”) and single premium immediate annuities in the
U.S., a range of products to institutional investors, including but not limited to, stable value contracts and institutional annuities, and
administers investments, retirement savings and other insurance and savings products to individuals and groups outside the U.S.,
primarily in Japan and Europe.
Life Insurance sells a variety of life insurance products, including variable universal life, universal life, and term life, as well as variable
private placement life insurance (“PPLI”) owned by corporations and high net worth individuals.
Retirement Plans provides products and services to corporations, municipalities, and not-for-profit organizations pursuant to Sections
401(k), 457 and 403(b) of the Internal Revenue Code of 1986, as amended (the “Code”), respectively
Mutual Funds offers retail mutual funds, investment-only mutual funds and college savings plans under Section 529 of the Code
(collectively referred to as non-proprietary) and proprietary mutual funds.
Marketing and Distribution
Global Annuity’ s distribution network includes national and regional broker-dealer organizations, banks and other financial institutions
and independent financial advisors. The Company periodically negotiates provisions and terms of its relationships with unaffiliated
parties. The Company’ s primary wholesaler of its individual annuities is Hartford Life Distributors, LLC, and its affiliate, PLANCO,
LLC (collectively “HLD”) which are indirect wholly-owned subsidiaries of Hartford Life, Inc. HLD provides sales support to registered
representatives, financial planners and broker-dealers at brokerage firms and banks across the United States.
Life Insurance’ s distribution network includes national and regional broker-dealer organizations, banks, independent agents,
independent life and property-casualty agents, and Woodbury Financial Services, an indirect, wholly-owned subsidiary retail broker-
dealer. PPLI’ s distribution network includes: specialized brokers with expertise in the large case market; financial advisors that work
with individual investors; investment banking and wealth management specialists; benefits consulting firms; investment consulting
firms employed by retirement plan sponsors; and The Hartford employees.
Retirement Plans distribution network includes Company employees with extensive retirement experience selling its products and
services through national and regional broker-dealer firms, banks and other financial institutions.
Mutual Fund sales professionals are segmented into two teams; a retail team and an institutional team. The retail team distributes The
Hartford’ s open-end funds and 529 College Savings funds to national and regional broker-dealer organizations, banks and other
financial institutions, independent financial advisors and registered investment advisors. The institutional team distributes The
Hartford’ s funds to professional buyers, such as broker-dealer wrap, consultants, record keepers, and bank trust groups.
Competition
Global Annuity competes with other life insurance companies, as well as certain banks, securities brokerage firms, independent financial
advisors, asset managers, and other financial intermediaries marketing annuities, mutual funds and other retirement-oriented products.
Product sales are affected by competitive factors such as investment performance ratings, product design, visibility in the marketplace,
financial strength ratings, distribution capabilities, levels of charges and credited rates, reputation and customer service. Global
Annuity’ s U.S. annuity deposits continue to decline due to competitive activity and the Company’ s product and risk decisions. Many
competitors have responded to the equity market volatility by increasing the price of their living benefit products and changing the level
of the guarantee offered. Management believes that the most significant industry de-risking changes have occurred. In 2010, the
Company transitioned to a new variable annuity product designed to meet customers future income needs while abiding by the risk
tolerances of the Company.
Life Insurance competes with other life insurance companies in the United States, as well as other financial intermediaries marketing
insurance products. Product sales are affected primarily by the availability and price of reinsurance, volatility in the equity markets,
breadth and quality of life insurance products being offered, pricing, relationships with third-party distributors, effectiveness of
wholesaling support, and the quality of underwriting and customer service. The individual life industry continues to see a distribution
shift away from the traditional life insurance sales agents to the consultative financial advisor as the place people go to buy their life
insurance. Life Insurance’ s regional sales office system is a differentiator in the market and allows it to compete effectively across
multiple distribution outlets.
Retirement Plans compete with other insurance carriers, large investment brokerage companies and large mutual fund companies. The
401(k), 457, and 403(b) products offer mutual funds wrapped in variable annuities, variable funding agreements, or mutual fund
retirement products. Plan sponsors seek a diversity of available funds and favorable fund performance. Consolidation among industry
providers has continued as competitors increase scale advantages.
Mutual Funds compete with other mutual fund companies along with investment brokerage companies and differentiate themselves
through product solutions, performance, and service. In this non-proprietary broker sold market, the Company and its competitors
compete aggressively for net sales.