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.

September 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, high-quality residential mortgage-backed securities ("RMBS") and CLOs, partially offset by net reductions to U.S. treasuries, tax-exempt municipal bonds, and commercial mortgage-backed securities ("CMBS"). The increase was also due to higher valuations as a result of lower interest rates and tighter credit spreads.

[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 the impact of reinvesting at higher interest rates and a higher level of invested assets, partially offset by a lower level of income on 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.

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

the three and nine months ended September 30, 2024, were 5.5% and 6.0%, respectively, which were above the average yield of sales and maturities of 4.4% and 4.7%, respectively. Average reinvestment rates for the three and nine months ended September 30, 2023, were 6.0% and 5.7%, respectively, which were above the average yield of sales and maturities of 4.5% and 4.2%, 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 September 30, 2024 and included in net realized gains (losses) were $27 and $71 for the three and nine months ended September 30, 2024, respectively. The change in net unrealized gains (losses) on equity securities still held as of September 30, 2023 and included in net realized gains (losses) were $(14) and $(5) for the three and nine months ended September 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 nine months ended September 30, 2024, includes gains (losses) from transactional foreign currency revaluation of $(11) and $(5), respectively, and gains (losses) on non-qualifying derivatives of $23 and $15, respectively. For the three and nine months ended September 30, 2023, includes gains (losses) from transactional foreign currency revaluation of $13 and $(3), respectively, and gains (losses) on non-qualifying derivatives of $(74) and $(108), 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, netgains for the three and nine month periods ended September 30, 2024 primarily included gains of $12 and $9, respectively, on interest rate derivatives driven by changes in interest rates, gains of $11 and $6 on equity derivatives driven by changes in equity market levels, and losses of $11 and $5, respectively, on transactional foreign currency revaluation.

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 losses for the three month period ended September 30, 2023 were primarily driven by a decline in value due to lower equity market levels. Equity securities net gains for the nine month period ended September 30, 2023 were primarily driven by an increase in value due to higher equity market levels.

Other, netlosses for the three and nine month periods ended September 30, 2023 primarily included losses of $71 and $53, respectively, on interest rate derivatives driven by an increase in interest rates and losses of $3 and $55, on credit derivatives primarily due to changes in valuations. Also included for the three month period ended September 30, 2023 were gains of $16 on FVO securities due to changes in credit spreads and gains of $13 on transactional foreign currency revaluation.