HARTFORD FINANCIAL SERVICES GROUP INC

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|GROUP BENEFITS - RESULTS OF OPERATIONS

[1]For discussion of consolidated investment results, see MD&A - Investment Results.

[2]For discussion of income taxes, see Note 17 - Income Taxes of Notes to Consolidated Financial Statements.

Premiums and Other Considerations

Ratios, Excluding Buyouts

[1]Integration and transaction costs related to the acquisition of Aetna's U.S. group life and disability business are not included in the expense ratio.

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Margin

Net income increased primarily due to a lower loss ratio, the effect of higher fully insured ongoing premiums, including a lower expense ratio, and lower net realized losses, partially offset by a decrease in net investment income.

Insurance operating costs and other expenses were higher prim arily due to the effect of premium growth, including higher commissions and staffing costs and increased investments in technology, partially offset by incremental expense savings from Hartford Next and lower incentive compensation.

Fully Insured Ongoing Premiums

Fully insured ongoing premiums increased in group disability, life and other driven by strong persistency and new business sales as well as an increase in exposure on existing accounts.

Fully insured ongoing sales increased primarily due to increases in group life sales, partially offset by a decrease in group disability sales.

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Ratios

Loss ratio improved 2.7 points for 2023 compared to the prior year period reflecting lower group life and group disability loss ratios. The group life loss ratio decreased 3.9 points driven by a lower level of mortality compared to the prior year period.

The group disability loss ratio decreased 1.2 points due to favorable long-term disability claim incidence and recoveries, partially offset by higher incidence in paid family leave and short-term disability products.

Expense ratio decreased in 2023 driven by the effect of higher earned premiums, incremental expense savings from Hartford Next and lower incentive compensation, partially offset by higher staffing costs and increased investments in technology.

In a highly competitive pricing environment, the Company expects growth in fully insured ongoing premiums in 2024 due to continued strong book persistency and sales, including from voluntary product offerings, state paid family and medical leave and an emphasis on small to mid-size employer groups. The level of long-term disability incidence and recoveries, both of which were favorable in 2023, will impact the group disability loss ratio. The group life loss ratio, which had been elevated during the pandemic, improved in 2023 and may be impacted by the effect of increasing pricing and loss trends in an endemic state. We expect the long-term net income margin outlook for this business to be approximately 6% to 7%, which does not assume any net realized gains or losses and is subject to uncertainty on mortality and long-term disability loss cost trends as well as volatility in net investment income.