HARTFORD FINANCIAL SERVICES GROUP INC

| PERSONAL LINES - RESULTS OF OPERATIONS

[1]For discussion of current accident year catastrophes and prior accident year development, see MD&A - Critical Accounting Estimates, Property and Casualty Insurance Product Reserves, Net of Reinsurance and Note 11 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Consolidated Financial Statements.

[3]Includes servicing revenues of $81, $73, and $80 for 2023, 2022, and 2021, respectively and includes servicing expenses of $60, $55, and $61 for 2023, 2022, and 2021, respectively.

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Written and Earned Premiums

Premium Measures

[1] Policy count retention represents the number of renewal policies issued during the current year period divided by the new and renewal policies issued in the prior period. Effective policy count retention represents the number of policies expected to renew in the current year period, based on contract effective dates, divided by the new and renewal policies effective in the prior period.

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Underwriting Ratios

Product Combined Ratios

Net Income (Loss)

Net loss changed from net income in 2022, largely driven by an increase in the underwriting loss, partially offset by an increase in net investment income and a decrease in net realized losses.

Underwriting Gain (Loss)

Underwriting loss increased in 2023, driven by higher current accident year losses before catastrophes, an increase in current accident year catastrophe losses and a change from favorable to unfavorable prior accident year development, partially offset by the effect of an increase in earned premium due to renewal written price increases, and a decrease in direct marketing costs.

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Expense ratio decreased in 2023 primarily due to lower direct marketing costs, and to a lesser extent, the impact of higher earned premium and Hartford Next savings.

Earned premiums increased in 2023 due to an increase in written premium over the prior twelve months in both automobile and in homeowners.

Written Premiums

Written premiums increased in 2023 due to the effect of written pricing increases in both automobile and homeowners, partially offset by non-renewals.

Renewal written pricing increases were higher for both automobile and homeowners in 2023 primarily in response to recent higher loss cost trends as well as higher insured values in homeowners.

Policy count retention slightly increased in automobile, and was stable for homeowners in 2023.

Effective policy count retention decreased both for automobile and for homeowners in 2023 in response to renewal written pricing increases.

Policies in-force as of the end of 2023 decreased for both automobile and for homeowners compared to the end of 2022, reflecting the level of new business in relation to non-renewed policies.

Current Accident Year Loss and Loss Adjustment Expense Ratio before Catastrophes

Current accident year loss and LAE ratio before catastrophes increased in both automobile and homeowners in 2023. The increase in automobile was primarily due to an increase in automobile liability and physical damage claim severity, as well as a higher level of frequency in the current period due to driving continuing to return to more normalized levels, partially offset by the impact of earned pricing increases. The automobile severity increases include the inflationary effects on bodily injury claims and automobile parts and repairs. For homeowners, the increase in the current accident year loss and LAE ratio before catastrophes was due to an increase in severity for both weather and non-weather claims, partially offset by earned pricing increases. Contributing to the increase in homeowners severity was the effect of higher rebuilding costs due to inflation.

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Current Accident Year Catastrophes and Unfavorable (Favorable) Prior Accident Year Development

Current accident year catastrophe losses increased in 2023 compared to the prior year. Current accident year catastrophe losses for 2023 included tornado, wind and hail events across several regions of the United States, losses from winter storms primarily on the East and West coasts, and to a lessor extent, wildfire events and hurricanes and tropical storms. Current accident year catastrophe losses for 2022 included losses for Hurricane Ian as well as wind and hail events primarily in the Northern Plains, Midwest, South and Mountain West, and losses from winter storms.

Prior accident year development was unfavorable in 2023, primarily driven by automobile physical damage, partially offset by decreases in reserves related to homeowners and catastrophes. Prior accident year development was favorable for 2022, primarily driven by automobile liability.

In 2024, the Company expects written premium growth largely from strong renewal written pricing increases. Retention is expected to moderate while growth in new business will be driven by increased marketing spend and the continued roll out of our new Prevail automobile and homeowners’ product which is available in 39 states as of December 31, 2023, with additional states expected during the year. We expect 2024 annual written pricing in both automobile and homeowners’ to be consistent with fourth quarter 2023 results. Loss ratios are expected to improve in automobile and earned pricing is expected to remain above loss cost trends in homeowners’, however both are subject to volatility in severity trends, for which we are expecting moderation from the elevated levels that have occurred over the past couple of years due to supply chain and other inflationary pressures, and the impact of volatile catastrophe results.