HARTFORD FINANCIAL SERVICES GROUP INC

[1]Primarily consists of equity fund investments, overseas deposits, consolidated investment funds, and derivative instruments which are carried at fair value.

June 30, 2024 compared to December 31, 2023

Total investments increased primarily due to an increase in fixed maturities, AFS, at fair value.

Fixed maturities, AFS, at fair value increased primarily due to net additions of corporate bonds and securitized products, partially offset by net reductions to tax-exempt municipal bonds and U.S. treasuries, as well as an overall decrease in valuations due to higher interest rates.

[1]Yields calculated using annualized net investment income divided by the monthly average invested assets at amortized cost, as applicable, excluding derivatives book value.

[2]Includes net investment income on short-term investments.

[3]Primarily includes changes in fair value of certain equity fund investments and income from derivatives that qualify for hedge accounting and are used to hedge fixed maturities.

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Total net investment income increased primarily due to a higher level of invested assets, the impact of reinvesting at higher rates, and a higher yield on variable-rate securities, partially offset by lower income from limited partnerships and other alternative investments.

Annualized net investment income yield, excluding limited partnerships and other alternative investments, was up primarily due to the impact of reinvesting at higher rates and a higher yield on variable-rate securities.

Average reinvestment rates, on fixed maturities and mortgage loans, excluding certain U.S. Treasury securities, for

the three and six months ended June 30, 2024 were 6.4% and 6.2%, respectively, which were above the average yield of sales and maturities of 4.9% and 4.9%, respectively. Average reinvestment rates for the three and six months ended June 30, 2023, were 5.3% and 5.6%, respectively, which were above the average yield of sales and maturities of 4.1% and 4.1%, respectively.

For the 2024 calendar year, we expect the annualized net investment income yield, excluding limited partnerships and other alternative investments, to be above the portfolio yield earned in 2023 due to the higher rate environment. The estimated impact on annualized net investment income yield is subject to variability including the impact of evolving market conditions.

[1]The change in net unrealized gains (losses) on equity securities still held as of June 30, 2024 and included in net realized gains (losses) were $15 and $44 for the three and six months ended June 30, 2024, respectively. The change in net unrealized gains (losses) on equity securities still held as of June 30, 2023 and included in net realized gains (losses) were $7 and $7 for the three and six months ended June 30, 2023, respectively.

[2]See Credit Losses on Fixed Maturities, AFS and Intent-to-Sell Impairments within the Investment Portfolio Risks and Risk Management section of the MD&A.

[3]See ACL on Mortgage Loans within the Investment Portfolio Risks and Risk Management section of the MD&A.

[4]For the three and six months ended June 30, 2024, includes gains (losses) from transactional foreign currency revaluation of $4 and $6, respectively, and gains (losses) on non-qualifying derivatives of $(6) and $(8), respectively. For the three and six months ended June 30, 2023, includes gains (losses) from transactional foreign currency revaluation of $(9) and $(16), respectively, and gains (losses) on non-qualifying derivatives of $(39) and $(34), respectively.

Gross gains and losses on sales were primarily due to sales of U.S. treasuries, corporate securities, and tax-exempt municipals to fund purchases of higher-yielding investments.

Equity securities net gains were primarily driven by an increase in value due to higher equity market levels.

Other, netlosses for the three and six month periods ended June 30, 2024 primarily included losses of $6 and $3, respectively, on interest rate derivatives driven by changes in interest rates, and gains of $4 and $6, respectively, on transactional foreign currency revaluation. Also included for the six month period ended June 30, 2024 were losses of $5 on equity derivatives due to higher equity market levels.

Gross gains and losses on sales were primarily due to sales of corporate securities and tax-exempt municipals, in addition to sales of U.S. treasuries for duration and/or liquidity management.

Equity securitiesnet gains were primarily driven by an increase in value due to higher equity market levels.

Other, netlosses for the three and six month periods ended June 30, 2023 primarily included losses of $36 and $52, respectively, on credit derivatives primarily due to changes in valuation, and losses of $9 and $16, respectively, on transactional foreign currency revaluation. Also included for the six month period ended June 30, 2023 were losses of $11 on FVO securities due to changes in credit spreads and gains of $18 on interest rate derivatives driven by an increase in interest rates.