(Dollar amounts in millions except for per share data, unless otherwise stated)
The Hartford provides projections and other forward-looking information in the following discussions, which contain many forward-looking statements, particularly relating to the Company’s future financial performance. These forward-looking statements are estimates based on information currently available to the Company, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are subject to the cautionary statements set forth on pages 4 and 5 of this Form 10-Q. Actual results are likely to differ, and in the past have differed, materially from those forecast by the Company, depending on the outcome of various factors, including, but not limited to, those set forth in the following discussion; Part I, Item 1A, Risk Factors in The Hartford’s 2025 Form 10-K Annual Report; and our other filings with the Securities and Exchange Commission ("SEC"). The Hartford undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise.
On June 3, 2026, the Company entered into a definitive agreement to sell Hartford Funds Management Group, Inc. ("Hartford Funds"), a subsidiary of Hartford Holdings, Inc. For further discussion of this transaction, see Note 17 - Discontinued Operations of Notes to Condensed Consolidated Financial Statements.
Certain reclassifications have been made to historical financial information presented in Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") to conform to the current period presentation. For discussion of reclassifications and discontinued operations, see Note 1 - Basis of Presentation and Significant Accounting Policies, and Note 17 - Discontinued Operations of Notes to Condensed Consolidated Financial Statements.
The Hartford defines increases or decreases greater than or equal to 200%, or changes from a net gain to a net loss position, or vice versa, as “NM” or not meaningful.
Index
Description Page
Key Performance Measures and Ratios 53
The Hartford's Operations 59
Financial Highlights 60
Consolidated Results of Operations 61
Investment Results 66
Critical Accounting Estimates 69
Business Insurance 74
Personal Insurance 79
Property & Casualty Other Operations 83
Employee Benefits 84
Corporate 86
Enterprise Risk Management 88
Capital Resources and Liquidity 100
Impact of New Accounting Standards 105
Throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations, we use certain terms and abbreviations, the more commonly used are summarized in the Acronyms section.
Key Performance Measures and Ratios
The Company considers the measures and ratios in the following discussion to be key performance indicators for its businesses. Management believes that these ratios and measures are useful in understanding the underlying trends in The Hartford’s businesses. However, these key performance indicators should only be used in conjunction with, and not in lieu of, the results presented in the reportable segment and corporate operating summaries that follow in this MD&A. These ratios and measures may not be comparable to other performance measures used by the Company’s competitors.
Definitions of Non-GAAP and Other Measures and Ratios
Book Value per Diluted Share excluding accumulated other comprehensive income (loss) ("AOCI")- This is a non-GAAP per share measure that is calculated by dividing (a) common stockholders' equity, excluding AOCI, after tax, by (b) common shares outstanding and dilutive potential common shares. The Company provides this measure to enable investors to analyze the amount of the Company's net worth that is primarily attributable to the Company's business operations. The Company believes that
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excluding AOCI from the numerator is useful to investors because it eliminates the effect of items that can fluctuate significantly from period to period, primarily based on changes in interest rates. Book value per diluted share is the most directly comparable U.S. GAAP measure.
Combined Ratio- The sum of the loss and loss adjustment expense ("LAE") ratio, the expense ratio and the policyholder dividend ratio. This ratio is a relative measurement that describes the related cost of losses and expenses for every $100 of earned premiums. A combined ratio below 100 demonstrates underwriting profit; a combined ratio above 100 demonstrates underwriting losses.
Core Earnings- The Hartford uses the non-GAAP measure core earnings as an important measure of the Company’s operating performance. The Hartford believes that core earnings provides investors with a valuable measure of the performance of the Company’s ongoing businesses because it reveals trends in our insurance businesses that may be obscured by including the net effect of certain items. Therefore, the following items are excluded from core earnings:
•Certain realized gains and losses - Generally realized gains and losses are primarily driven by investment decisions and external economic developments, the nature and timing of which are unrelated to the insurance and underwriting aspects of our business. Accordingly, core earnings excludes the effect of realized gains and losses that tend to be highly variable from period to period based on capital market conditions. The Hartford believes, however, that some realized gains and losses are integrally related to our insurance operations, so core earnings includes net realized gains and losses such as net periodic settlements on credit derivatives. These net realized gains and losses are directly related to an offsetting item included in the income statement such as net investment income.
•Restructuring and other costs - Costs incurred as part of a restructuring plan are not a recurring operating expense of the business.
•Loss on extinguishment of debt - Largely consisting of make-whole payments or tender premiums upon paying debt off before maturity, these losses are not a recurring operating expense of the business.
•Gains and losses on reinsurance transactions - Gains or losses on reinsurance, such as those entered into upon sale of a business or to reinsure loss reserves, are not a recurring operating expense of the business.
•Integration and other non-recurring M&A costs - These costs, including transaction costs incurred in connection with an acquired business, are incurred over a short period of time and do not represent an ongoing operating expense of the business.
•Change in loss reserves upon acquisition of a business - These changes in loss reserves are excluded from core earnings because such changes could obscure the ability to compare results in periods after the acquisition to results of periods prior to the acquisition.
•Deferred gain resulting from retroactive reinsurance and subsequent changes in the deferred gain - Retroactive reinsurance agreements economically transfer risk to the reinsurers and excluding the deferred gain on retroactive reinsurance and related amortization of the deferred gain from core earnings provides greater insight into the economics of the business.
•Change in valuation allowance on deferred taxes related to non-core components of before tax income - These changes in valuation allowances are excluded from core earnings because they relate to non-core components of before tax income, such as tax attributes like capital loss carryforwards.
•Results of discontinued operations - These results are excluded from core earnings for businesses sold or held for sale because such results could obscure the ability to compare period over period results for our ongoing businesses.
In addition to the above components of net income available to common stockholders that are excluded from core earnings, preferred stock dividends declared, which are excluded from net income, are included in the determination of core earnings. Preferred stock dividends are a cost of financing more akin to interest expense on debt and are expected to be a recurring expense as long as the preferred stock is outstanding.
Net income (loss) and net income (loss) available to common stockholders are the most directly comparable U.S. GAAP measures to core earnings. Core earnings should not be considered as a substitute for net income (loss) or net income (loss) available to common stockholders and does not reflect the overall profitability of the Company’s business. Therefore, The Hartford believes that it is useful for investors to evaluate net income (loss), net income (loss) available to common stockholders, and core earnings when reviewing the Company’s performance.
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Reconciliation of Net Income to Core Earnings
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Net income $ 1,298 $ 995 $ 2,154 $ 1,625
Preferred stock dividends 5 5 10 10
Net income available to common stockholders 1,293 990 2,144 1,615
Adjustments to reconcile net income available to common stockholders to core earnings:
Net realized (gains) losses, excluded from core earnings, before tax [1] (40) 19 11 66
Integration and other non-recurring M&A costs, before tax 3 2 4 4
Change in deferred gain on retroactive reinsurance, before tax [2] — (24) (36) (56)
Income tax expense (benefit) [3] 7 2 4 (2)
Income from discontinued operations, net of tax (318) (57) (370) (103)
Core earnings $ 945 $ 932 $ 1,757 $ 1,524
[1]Includes a loss on disposal of real estate, which was reported in insurance operating costs and other expenses and sold during the second quarter of 2026.
[2]During first quarter 2026, the Company began collecting recoveries from National Indemnity Company (“NICO”), a subsidiary of Berkshire Hathaway Inc., related to the asbestos and environmental adverse development cover (“A&E ADC”) and as a result amortized $36 of the deferred gain within benefits, losses and loss adjustment expenses in the three months ended March 31, 2026. Subsequently NICO suspended any further payment under the A&E ADC due to a dispute that is the subject of an arbitration proceeding. The Company recorded amortization of the deferred gain related to the Navigators adverse development cover (“Navigators ADC”) of $24 and $56 for the three and six months ended June 30, 2025, respectively. For additional information regarding the adverse development cover ("ADC") reinsurance agreement, refer to Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.
[3]Primarily represents the federal income tax expense (benefit) related to before tax items not included in core earnings.
Core Earnings Margin- The Hartford uses the non-GAAP measure core earnings margin to evaluate, and believes it is an important measure of, the Employee Benefits segment's operating performance. Core earnings margin is calculated by dividing core earnings by revenues, excluding buyouts and realized (gains) losses. Net income margin, calculated by dividing net income by revenues, is the most directly comparable U.S. GAAP measure. The Company believes that core earnings margin provides investors with a valuable measure of the performance of Employee Benefits because it reveals trends in the business that may be obscured by the effect of buyouts and realized (gains) losses as well as other items excluded in the calculation of core earnings. Core earnings margin should not be considered as a substitute for net income margin and does not reflect the overall profitability of Employee Benefits. Therefore, the Company believes it is important for investors to evaluate both core earnings margin and net income margin when reviewing performance. A reconciliation of net income margin to core earnings margin is set forth in the Results of Operations section within MD&A - Employee Benefits.
Current Accident Year Catastrophe Ratio- A component of the loss and loss adjustment expense ratio, represents the ratio of catastrophe losses incurred in the current accident year ("CAY") (net of reinsurance) to earned premiums. For U.S. events, a catastrophe is an event that causes $25 or more in industry insured property losses and affects a significant number of property and casualty policyholders and insurers, as defined by the Property Claim Services office of Verisk. For international events, the Company's approach is similar, informed, in part, by how Lloyd's of London defines major losses. Lloyd's of London is an insurance market-place operating worldwide ("Lloyd's"). Lloyd's does not underwrite risks. The Company accepts risks as the sole member of Lloyd's Syndicate 1221 ("Lloyd's Syndicate"). The current accident year catastrophe ratio includes the effect of catastrophe losses, but does not include the effect of reinstatement premiums.
Expense Ratio- For Business Insurance and Personal Insurance is the ratio of underwriting expenses less fee income, to earned premiums. Underwriting expenses include the amortization of deferred policy acquisition costs ("DAC"), amortization of other intangible assets and insurance operating costs and other expenses, including certain centralized services costs and bad debt expense. DAC includes commissions, taxes, licenses and fees and other incremental direct underwriting expenses and are amortized over the policy term.
The expense ratio for Employee Benefits is expressed as the ratio of insurance operating costs and other expenses including amortization of intangibles and amortization of DAC, to premiums and other considerations, excluding buyout premiums.
The expense ratio for Business Insurance, Personal Insurance and Employee Benefits does not include integration and other transaction costs associated with an acquired business.
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Gross New Business Premium- Represents the amount of premiums charged, before ceded reinsurance, for policies issued to customers who were not insured with the Company in the previous policy term. Gross new business premium plus gross renewal written premium less ceded reinsurance equals total written premium.
Loss and Loss Adjustment Expense Ratio- A measure of the cost of claims incurred in the calendar year divided by earned premium and includes losses and loss adjustment expenses incurred for both the current and prior accident years. Among other factors, the loss and loss adjustment expense ratio needed for the Company to achieve its targeted return on equity ("ROE") fluctuates from year to year based on changes in the expected investment yield over the claim settlement period, the timing of expected claim settlements and the targeted returns set by management based on the competitive environment.
The loss and loss adjustment expense ratio is affected by claim frequency and claim severity, particularly for shorter-tail property lines of business, where the emergence of claim frequency and severity is credible and likely indicative of ultimate losses. Claim frequency represents the percentage change in the average number of reported claims per unit of exposure in the current accident year compared to that of the previous accident year. Claim severity represents the percentage change in the estimated average cost per claim in the current accident year compared to that of the previous accident year. As one of the factors used to determine pricing, the Company’s practice is to first make an overall assumption about claim frequency and severity for a given line of business and then, as part of the rate-making process, adjust the assumption as appropriate for the particular state, product or coverage.
Underlying Loss and Loss Adjustment Expense Ratio- This non-GAAP financial measure is the cost of non-catastrophe loss and loss adjustment expenses incurred in the current accident year divided by earned premiums. The loss and loss adjustment expense ratio is the most directly comparable U.S. GAAP measure. Management believes that the underlying loss and loss adjustment expense ratio is a performance measure that is useful to investors as it removes the impact of volatile and unpredictable catastrophe losses and prior accident year development ("PYD"). A reconciliation of the loss and loss adjustment expense ratio to the underlying loss and loss adjustment expense ratio is set forth in the Reportable Segment and Corporate Operating Summaries section within MD&A.
Loss Ratio, excluding Buyouts- Utilized for the Employee Benefits segment and is expressed as a ratio of benefits, losses and loss adjustment expenses, excluding those related to buyout premiums, to premiums and other considerations, excluding buyout premiums. Since Employee Benefits occasionally buys a block of claims for a stated premium amount, the Company excludes this buyout from the loss ratio used for evaluating the profitability of the business as buyouts may distort the loss ratio. Buyout premiums represent takeover of open claim liabilities and other non-recurring premium amounts.
Net investment income excluding limited partnerships and other alternative investments- This non-GAAP measure is the amount of net investment income on a consolidated level earned from invested assets, excluding the net investment income related to limited partnerships and other alternative investments. The Company believes that net investment income excluding limited partnerships and other alternative investments, provides investors with an important measure of the trend in investment earnings because it excludes the impact of the volatility in returns related to limited partnerships and other alternative investments. Net investment income is the most directly comparable U.S. GAAP measure. A reconciliation of net investment income to net investment income excluding limited partnerships and other alternative investments - is set forth in the Investment Results section within MD&A.
Net New Business Premium- Represents the amount of premiums charged, after ceded reinsurance, for policies issued to customers who were not insured with the Company in the previous policy term. Net new business premium plus renewal written premium equals total written premium.
Policy Count Retention- For small business, represents the number of renewal policies issued during the current year period divided by the new and renewal policies issued in the prior period. Policy count retention is affected by a number of factors, including the percentage of renewal policy quotes accepted and decisions by the Company to non-renew policies because of specific policy underwriting concerns or because of a decision to reduce premium writings in certain classes of business or states. Policy count retention is also affected by advertising and rate actions taken by us and competitors.
Effective Policy Count Retention- For Personal Insurance, 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. Effective policy count retention is affected by a number of factors, including the percentage of renewal policy quotes accepted and decisions by the Company to non-renew policies because of specific policy underwriting concerns or because of a decision to reduce premium writings in certain classes of business or states. Effective policy count retention is also affected by advertising and rate actions taken by us and competitors, as well as the effect of subsequent cancellations and non-renewals by customers. Effective policy count retention statistics are subject to change from period to period based on the effect of differences between actual and expected policy cancellations throughout the policy period.
Policies in-force- Represents the number of policies with coverage in effect as of the end of the period. The number of policies in-force is a growth measure used for Personal Insurance, small business, and middle market lines within middle & large business and is affected by both new business growth and retention.
Policyholder Dividend Ratio- The ratio of policyholder dividends to earned premium.
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Premium Retention- For middle & large business, represents the ratio of prior period premiums that were successfully renewed divided by premiums associated with policies available for renewal in the current period. Premium retention excludes premium amounts from annual audits, renewal written price increases and changes in exposure, including amount of insurance. Premium retention statistics are subject to change from period to period based on a number of factors, including the effect of subsequent cancellations and non-renewals.
Prior Accident Year Loss and Loss Adjustment Expense Ratio- Represents the increase (decrease) in the estimated cost of settling catastrophe and non-catastrophe claims incurred in prior accident years as recorded in the current calendar year divided by earned premiums.
Reinstatement Premiums- Represents additional ceded premium paid for the reinstatement of the amount of reinsurance coverage that was reduced as a result of the Company ceding losses to reinsurers.
Renewal Earned Price Increase (Decrease)- Written premiums are earned over the policy term, which is six months for certain personal automobile business and twelve months for substantially all of the remainder of the Company’s Property and Casualty ("P&C") business. Since the Company earns premiums over the six to twelve month term of the policies, renewal earned price increases (decreases) lag renewal written price increases (decreases) by six to twelve months.
Renewal Written Price Increase (Decrease)- For Business Insurance, represents the combined effect of rate changes, and individual risk pricing decisions per unit of exposure on policies that renewed and includes amount of insurance. For Personal Insurance, renewal written price increases represent the total change in premium per policy since the prior year on those policies that renewed and includes the combined effect of rate changes, amount of insurance and other changes in exposure. For Personal Insurance, other changes in exposure include, but are not limited to, the effect of changes in number of drivers, vehicles and incidents, as well as changes in customer policy elections, such as deductibles and limits. The rate component represents the change in rate impacting renewal policies as previously filed with and approved by state regulators during the period. Amount of insurance represents the change in the value of the rating base, such as model year/vehicle symbol for automobiles, building replacement costs for property and wage inflation for workers’ compensation. A number of factors affect renewal written price increases (decreases) including expected loss costs as projected by the Company’s pricing actuaries, rate filings approved by state regulators, risk selection decisions made by
the Company’s underwriters and marketplace competition. Renewal written price changes reflect the property and casualty insurance market cycle. Prices tend to increase for a particular line of business when insurance carriers have incurred significant losses in that line of business in the recent past or the industry as a whole commits less of its capital to writing exposures in that line of business. Prices tend to decrease when recent loss experience has been favorable or when competition among insurance carriers increases. Renewal written price statistics are subject to change from period to period, based on a number of factors, including changes in actuarial estimates and the effect of subsequent cancellations and non-renewals, and modifications made to better reflect ultimate pricing achieved.
Underlying Combined Ratio- This non-GAAP financial measure of underwriting results represents the combined ratio before catastrophes, prior accident year development and current accident year change in loss reserves upon acquisition of a business. Combined ratio is the most directly comparable U.S. GAAP measure. The Company believes this ratio is an important measure of the trend in profitability since it removes the impact of volatile and unpredictable catastrophe losses and prior accident year loss and loss adjustment expense reserve development. The changes to loss reserves upon acquisition of a business are excluded from underlying combined ratio because such changes could obscure the ability to compare results in periods after the acquisition to results of periods prior to the acquisition as such trends are valuable to our investors' ability to assess the Company's financial performance.
A reconciliation of combined ratio to underlying combined ratio is set forth in the Results of Operations section within MD&A - Business Insurance and Personal Insurance.
Underwriting Gain (Loss)- This non-GAAP financial measure is a before tax measure that represents earned premiums less incurred losses, loss adjustment expenses and underwriting expenses. Net income (loss) is the most directly comparable U.S. GAAP measure. The Hartford's management evaluates profitability of the Business and Personal Insurance segments primarily on the basis of underwriting gain or loss. Underwriting gain (loss) is influenced significantly by earned premium growth and the adequacy of The Hartford's pricing. Underwriting profitability over time is also greatly influenced by The Hartford's underwriting discipline, as management strives to manage exposure to loss through favorable risk selection and diversification, effective management of claims, use of reinsurance and its ability to manage its expenses. The Hartford believes that underwriting gain (loss) provides investors with a valuable measure of profitability, before tax, derived from underwriting activities, which are managed separately from the Company's investing activities.
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Reconciliation of Net Income to Underwriting Gain (Loss)
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Business Insurance
Net income $ 704 $ 696 $ 1,240 $ 1,173
Adjustments to reconcile net income to underwriting gain:
Net investment income (556) (449) (1,061) (886)
Net realized (gains) losses (12) 20 7 44
Other (income) expense 1 1 — 2
Income tax expense 179 176 315 298
Underwriting gain $ 316 $ 444 $ 501 $ 631
Personal Insurance
Net income $ 130 $ 91 $ 269 $ 96
Adjustments to reconcile net income to underwriting gain:
Net investment income (67) (58) (129) (115)
Net realized (gains) losses (4) 4 — 6
Net servicing and other (income) expense (2) (5) (5) (10)
Income tax expense 33 23 68 23
Underwriting gain $ 90 $ 55 $ 203 $ —
P&C Other Operations
Net income $ 17 $ 13 $ 59 $ 26
Adjustments to reconcile net income to underwriting gain (loss):
Net investment income (22) (19) (42) (37)
Net realized (gains) losses (1) 2 — 2
Income tax expense 4 2 15 5
Underwriting gain (loss) $ (2) $ (2) $ 32 $ (4)
Written and Earned Premiums- Written premium represents the amount of premiums charged for policies issued, net of reinsurance, during a fiscal period. Premiums are considered earned and are included in the financial results on a pro rata basis over the policy period. Management believes that written premium is a performance measure that is useful to investors as it reflects current trends in the Company’s sale of property and casualty insurance products. Written and earned premium are recorded net of ceded reinsurance premium.
Written premium growth, for the Company's property and casualty insurance businesses, is a function of retention, pricing, exposure growth and new business, all of which can be impacted by competitive market conditions and general economic conditions. Changes in reinsurance programs can also impact written premium growth.
Traditional life and disability insurance type products, such as those sold by Employee Benefits, collect premiums from policyholders in exchange for financial protection for the policyholder from a specified insurable loss, such as death or disability. These premiums together with net investment income earned are used to pay the contractual obligations under these insurance contracts.
Two major factors, sales and persistency, impact premium growth. Sales can increase or decrease in a given year based on a number of factors, including but not limited to, customer demand for the Company’s product offerings, pricing competition, distribution channels and the Company’s reputation and ratings. Persistency refers to the percentage of premium remaining in-force from year-to-year.
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The Hartford's Operations
The Hartford conducts business principally in four reportable segments including Business Insurance, Personal Insurance, Property & Casualty Other Operations, and Employee Benefits, as well as a Corporate category. The Company includes in the Corporate category discontinued operations of the Company's Hartford Funds business, capital raising activities (including equity financing, debt financing and related interest expense), purchase accounting adjustments related to goodwill, reserves for run-off structured settlement and terminal funding agreement liabilities, restructuring costs, transaction expenses incurred in connection with an acquisition, certain M&A costs, and other expenses not allocated to the reportable segments. Corporate also includes investment management fees and expenses related to managing third-party assets.
The Company derives its revenues principally from: (a) premiums earned for insurance coverage provided to insureds; (b) net investment income; (c) fees earned for services provided to third parties; and (d) net realized gains and losses. Premiums charged for insurance coverage are earned principally on a pro rata basis over the terms of the related policies in-force.
The profitability of the Company's property and casualty insurance businesses over time is greatly influenced by the Company’s underwriting discipline, which seeks to manage exposure to loss through favorable risk selection and diversification, its management of claims, its use of reinsurance, the size of its in-force block, making reliable estimates of actual mortality and morbidity, and its ability to manage its expense ratio which it accomplishes through economies of scale and its management of acquisition costs and other insurance operating costs. Pricing adequacy depends on a number of factors, including the ability to obtain regulatory approval for rate changes, proper evaluation of underwriting risks, the ability to project future loss cost frequency and severity based on historical loss experience adjusted for known trends, the Company’s response to rate actions taken by competitors, its expense levels and expectations about regulatory and legal developments. The Company seeks to price its insurance policies such that insurance premiums and future net investment income earned on premiums received will cover insurance operating costs and the ultimate cost of paying claims reported on the policies and provide for a profit margin. For many of its insurance products, the Company is required to obtain approval for its premium rates from state insurance departments and the Lloyd's Syndicate's ability to write business is subject to Lloyd's approval for its premium capacity each year. Most of Personal Insurance written premium is associated with our exclusive licensing agreement with AARP, which is effective through December 31, 2032. This agreement provides an important competitive advantage given the size of the 50 plus population and the strength of the AARP brand.
Similar to property and casualty, profitability of the Employee Benefits business depends, in large part, on the ability to evaluate and price risks appropriately and make reliable estimates of mortality, morbidity, disability and longevity. To manage the pricing risk, Employee Benefits generally offers term insurance policies, allowing for the adjustment of rates or policy terms in order to minimize the adverse effect of market trends, loss costs, declining interest rates and other factors.
However, as policies are typically sold with rate guarantees an average of three years, pricing for the Company’s products could prove to be inadequate if loss and expense trends emerge adversely during the rate guarantee period or if investment returns are lower than expected at the time the products were sold. For some of its products, the Company is required to obtain approval for its premium rates from state insurance departments. New and renewal business for employee benefits business, particularly for long-term disability ("LTD"), are priced using an assumption about expected investment yields over time. While the Company employs asset-liability duration matching strategies to mitigate risk and may use interest-rate sensitive derivatives to hedge its exposure in the Employee Benefits investment portfolio, cash flow patterns related to the payment of benefits and claims are uncertain and actual investment yields could differ significantly from expected investment yields, affecting profitability of the business. In addition to appropriately evaluating and pricing risks, the profitability of the Employee Benefits business depends on other factors, including the Company’s response to pricing decisions and other actions taken by competitors, its ability to offer voluntary products and self-service capabilities, the persistency of its sold business and its ability to manage its expenses which it seeks to achieve through economies of scale and operating efficiencies.
The investment return, or yield, on invested assets is an important element of the Company’s earnings since insurance products are priced with the assumption that premiums received can be invested for a period of time before benefits, losses and loss adjustment expenses are paid. Due to the need to maintain sufficient liquidity to satisfy claim obligations, the majority of the Company’s invested assets have been held in available-for-sale ("AFS") securities, including, among other asset classes, corporate bonds, municipal bonds, government debt, short-term debt, mortgage-backed securities, asset-backed securities ("ABS") and collateralized loan obligations ("CLOs"). The Company also invests in commercial mortgage loans as well as limited partnerships and other alternative investments, which are private investments that are less liquid, but have the potential to generate higher returns. The primary investment objective for the Company is to maximize economic value, consistent with acceptable risk parameters, including the management of credit risk and interest rate sensitivity of invested assets, while generating sufficient net of tax income to meet policyholder and corporate obligations. Investment strategies are developed based on a variety of factors including business needs, regulatory requirements and tax considerations.
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Second Quarter Financial Highlights
Net Income Available to Common Stockholders Net Income Available to Common Stockholders per Diluted Share Book Value per Diluted Share
Ý Increased $303 or 31% Ý Increased $1.24 or 36% Ý Increased $3.97 or 6%
+ Greater income from discontinued operations + Increase in net income available to common stockholders + Net income in excess of common stockholder dividends
+ Higher net investment income + Reduction in outstanding shares due to share repurchases - Dilutive effective of share repurchases
+ A change from net realized losses to net realized gains - A decrease in AOCI, primarily driven by an increase in net unrealized losses on AFS securities
+ The effect of higher earned premiums
+ Lower underlying loss and LAE ratio in Personal Insurance
- Less favorable P&C prior accident year reserve development
- Higher group disability loss ratio
- Higher underlying loss and LAE ratio in Business Insurance
- Higher expense ratio in P&C
Investment Yield, After Tax Property & Casualty Combined Ratio Employee Benefits Net Income Margin
Ý Increased 40 bps Ý Deteriorated 2.6 points Þ Decreased 0.8 points
+ Higher yield on limited partnerships and other alternative investments - Less favorable P&C prior accident year reserve development - Higher group disability loss ratio
+ A change from net realized losses to net realized gains
- Higher underlying loss and LAE ratio in Business Insurance
+ Higher net investment income
- Higher expense ratio in P&C + Lower expense ratio
+ Lower underlying loss and LAE ratio in Personal Insurance
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Consolidated Results of Operations
The Consolidated Results of Operations should be read in conjunction with the Company's Condensed Consolidated Financial Statements and the related Notes as well as with the Reportable Segment and Corporate Operating Summaries within the MD&A.
Consolidated Results of Operations
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Change 2026 2025 Change
Earned premiums $ 6,279 $ 5,961 5 % $ 12,424 $ 11,796 5 %
Fee income 86 86 — % 173 172 1 %
Net investment income 800 658 22 % 1,534 1,310 17 %
Net realized gains (losses) 64 (19) NM 12 (68) NM
Other revenues 34 30 13 % 61 52 17 %
Total revenues 7,263 6,716 8 % 14,204 13,262 7 %
Benefits, losses and loss adjustment expenses 4,081 3,712 10 % 8,079 7,712 5 %
Amortization of deferred policy acquisition costs 669 625 7 % 1,325 1,232 8 %
Insurance operating costs and other expenses 1,215 1,138 7 % 2,443 2,285 7 %
Interest expense 50 50 — % 100 100 — %
Amortization of other intangible assets 17 17 — % 35 35 — %
Total benefits, losses and expenses 6,032 5,542 9 % 11,982 11,364 5 %
Income from continuing operations before income taxes 1,231 1,174 5 % 2,222 1,898 17 %
Income tax expense 251 236 6 % 438 376 16 %
Income from continuing operations, net of tax 980 938 4 % 1,784 1,522 17 %
Income from discontinued operations, net of tax 318 57 NM 370 103 NM
Net income 1,298 995 30 % 2,154 1,625 33 %
Preferred stock dividends 5 5 — % 10 10 — %
Net income available to common stockholders $ 1,293 $ 990 31 % $ 2,144 $ 1,615 33 %
Three months ended June 30, 2026 compared to 2025
Net income available to common stockholders increased by $303, primarily driven by:
•A $261 increase in income from discontinued operations, net of tax, primarily due to a $251 income tax benefit associated with establishing a deferred tax asset related to the sale of Hartford Funds. For further information related to the sale of Hartford Funds, refer to Note 17- Discontinued Operations of Notes to Condensed Consolidated Financial Statements; and
•Higher net investment income of $142, before tax, and an increase of $83, before tax, due to a change to net realized gains in the current period from net realized losses in the prior period.
These increases were partially offset by:
•A lower P&C underwriting gain of $93, before tax, primarily driven by a lower level of favorable prior accident year reserve development, a higher underlying loss and LAE ratio in Business Insurance, and a higher expense ratio, partially offset by the effect of earned premium growth in Business Insurance and a lower underlying loss and LAE ratio in Personal Insurance; and
•In Employee Benefits, the impact of a higher short-term and long-term disability loss ratio, partially offset by a lower expense ratio.
For a discussion of the Company's operating results by segment, see MD&A - Reportable Segment and Corporate Operating Summaries.
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Revenue
Earned Premiums
Earned premiums increased by $318 or 5%, primarily due to:
•An increase in P&C reflecting a 7% increase in Business Insurance, partially offset by a 3% decrease in Personal Insurance.
–Contributing to the increase in Business Insurance was the effect of earned pricing increases across the majority of lines of business and an increase in new business.
–Personal Insurance declined driven by automobile, as the impact of a decline in policies in-force was partially offset by earned pricing increases, while homeowners increased primarily due to earned pricing increases.
•Employee Benefits earned premium increased primarily due to higher new business sales across all products, an increase in exposure on existing accounts, and persistency in excess of 90%.
Net Investment Income
[1]Limited partnerships and other alternative investments of $13 and $114 for the three months ended June 30, 2025 and 2026 respectively.
Net investment income increased primarily due to higher income from limited partnerships and other alternative investments and the impact of a higher level of invested assets.
Net realized gains compared to net realized losses in the prior year, primarily due to greater appreciation in value of equity securities in the 2026 period, largely driven by a private common stock issuer that completed an initial public offering.
For further discussion of investment results, see MD&A - Investment Results, Net Realized Gains and MD&A - Investment Results, Net Investment Income.
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Benefits, Losses and Expenses
Losses and LAE Incurred for P&C
Benefits, losses and loss adjustment expenses increased $369 due to:
•An increase in Property & Casualty of $226, which was attributable to:
–An increase in P&C CAY loss and LAE before catastrophes of $140, primarily due to the effect of higher earned premiums and a higher underlying loss and LAE ratio in Business Insurance, partially offset by a lower underlying loss and LAE ratio in Personal Insurance; and
–Less P&C favorable net prior accident year reserve development of $76, with favorable development in the 2026 period of $111, compared to $187 in the prior year period. Net favorable prior year reserve development in the 2026 period was primarily driven by decreases in reserves related to workers' compensation, catastrophes, Personal Insurance automobile liability and physical damage, bond, and homeowners, partially offset by an increase in reserves for general liability and commercial automobile liability. Favorable net prior year reserve development in the 2025 period was primarily driven by decreases in reserves related to workers' compensation, catastrophes, bond, commercial property, homeowners, and Personal Insurance automobile liability and physical damage. Also included within net prior accident year reserve development for the three months ended June 30, 2025 was a benefit of $24 related to amortization of the Navigators ADC deferred gain, which has been fully amortized as of September 30, 2025.
Losses and LAE Incurred for Employee Benefits
–An increase in CAY catastrophe losses of $10. Catastrophe losses in both the 2026 and 2025 periods primarily included losses from tornado, wind and hail events.
For further discussion, see Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.
•Employee Benefits losses and LAE increased $141, primarily due to higher short-term and long-term disability loss ratios driven by increased claim incidence across short and long-term disability and less favorable long-term disability claim recoveries compared with the prior year although in line with long-term expectations.
Amortization of deferred policy acquisition costs increased from the prior year period driven by Business Insurance, reflecting an increase in earned premiums across all lines of business.
Insurance operating costs and other expenses increased due to:
•A loss on disposal of real estate, which was sold during the second quarter of 2026;
•Higher staffing costs, including benefits costs, partly in response to increased business volume;
•Higher technology costs, including increased investment in our businesses; and
•Higher P&C commissions, driven by the impact of increased business volume.
Income tax expense increased primarily due to an increase in income before tax. For further discussion of income taxes, see Note 12 - Income Taxes of Notes to Condensed Consolidated Financial Statements.
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Income from discontinued operations, net of tax increased primarily related to a $251 income tax benefit associated with the sale of Hartford Funds representing the difference between the tax basis and the U.S. GAAP carrying value of Hartford Funds. For further discussion of discontinued operations, see Note 17 – Discontinued Operations of Notes to Condensed Consolidated Financial Statements.
Six months ended June 30, 2026 compared to 2025
Net income available to common stockholders increased by $529 primarily driven by:
•A $267 increase in income from discontinued operations, net of tax, primarily related to a $251 income tax benefit associated with establishing a deferred tax asset related to the sale of Hartford Funds. For further information related to the sale of Hartford Funds, refer to Note 17- Discontinued Operations of Notes to Condensed Consolidated Financial Statements;
•Higher net investment income of $224, before tax, and an increase of $80, before tax, due to a change to net realized gains in the current period from net realized losses in the prior period; and
•A higher P&C underwriting gain of $109, before tax, primarily driven by lower CAY catastrophe losses, the effect of earned premium growth in Business Insurance, and a lower underlying loss and LAE ratio in Personal Insurance, partially offset by a lower level of favorable prior accident year reserve development, a higher expense ratio, and a higher underlying loss and LAE ratio in Business Insurance.
These increases were partially offset by:
•In Employee Benefits, the impact of a higher short-term and long-term disability loss ratio and a higher expense ratio, including higher staffing costs and technology costs, partially offset by a lower group life loss ratio.
For a discussion of the Company's operating results by segment, see MD&A - Reportable Segment and Corporate Operating Summaries.
Revenue
Earned Premiums
Earned premiums increased by $628, or 5%, primarily due to:
•An increase in P&C reflecting a 7% increase in Business Insurance, partially offset by a 1% decrease in Personal Insurance.
–Contributing to the increase in Business Insurance was the effect of earned pricing increases across the majority of lines of business and an increase in new business.
–Personal Insurance declined driven by automobile, as the impact of a decline in policies in-force was partially offset by earned pricing increases, while homeowners increased primarily due to earned pricing increases.
•Employee Benefits earned premium increased primarily due to higher new business sales across all products, an increase in exposure on existing accounts, and persistency in excess of 90%.
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Net Investment Income
[1]Limited partnerships and other alternative investments of $52 and $189 for the six months ended June 30, 2025 and 2026, respectively.
Net investment income increased due to higher income from limited partnerships and other alternative investments, the impact of a higher level of invested assets, and reinvesting at higher rates.
Net realized gains compared to net realized losses in the prior year period, primarily due to greater appreciation in value of equity securities in the 2026 period, predominantly driven by a private common stock issuer that completed an initial public offering.
For further discussion of investment results, see MD&A - Investment Results, Net Realized Gains and MD&A - Investment Results, Net Investment Income.
Benefits, Losses and Expenses
Losses and LAE Incurred for P&C
Benefits, losses and loss adjustment expenses increased $367, due to:
•An increase in Property & Casualty of $186, which was attributable to:
–An increase in P&C CAY loss and LAE before catastrophes of $256, primarily due to the effect of higher earned premiums and a higher underlying loss and LAE ratio in Business Insurance, partially offset by a lower underlying loss and LAE ratio in Personal Insurance; and
–A decline in P&C favorable net prior accident year reserve development of $157, with favorable development in the 2026 period of $152, compared to $309 in the prior year period. Net favorable prior year reserve development in the 2026 period was primarily driven by decreases in reserves related to workers' compensation, catastrophes, Personal Insurance automobile liability, bond and homeowners, partially offset by an increase in reserves for general liability and commercial automobile liability. Also included within net prior accident year reserve development for the six months ended June 30, 2026 was a benefit of $36 related to amortization of the A&E ADC deferred gain. Favorable prior year reserve development in the 2025 period was primarily driven by decreases in reserves related to workers' compensation, catastrophes, homeowners, commercial property, bond, and Personal Insurance automobile liability and physical damage. Also included within net prior accident year reserve development for the six months ended June 30, 2025 was a benefit of $56 related to amortization of the Navigators ADC deferred gain, which has been fully amortized as of September 30, 2025.
Partially offset by:
–A decrease in CAY catastrophe losses of $227. Catastrophe losses in the 2026 period primarily included losses from tornado, wind and hail events and winter storms. Catastrophe losses in the 2025 period included $313, net of reinsurance, from the January 2025 California Wildfire Event, as well as losses from tornado, wind and hail events.
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Losses and LAE Incurred for Employee Benefits
For further discussion, see Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.
•Employee Benefits losses and LAE increased $180, as higher short-term and long-term disability loss ratios were partially offset by a lower group life loss ratio, reflecting reduced mortality in both term and accidental life products. The increase in the disability loss ratios were driven by increased claim incidence across short and long-term disability and less favorable long-term disability claim recoveries, partially offset by continued paid family and medical leave pricing actions.
Amortization of deferred policy acquisition costs increased from the prior year period driven by Business Insurance, reflecting an increase in earned premiums across all lines of business.
Insurance operating costs and other expenses increased due to:
•Higher staffing costs, including benefits costs, partly in response to increased business volume;
•A loss on disposal of real estate, which was sold during the second quarter of 2026;
•Higher technology costs, including increased investment in our businesses; and
•Higher P&C commissions, driven by the impact of increased business volume.
Income tax expense increased primarily due to an increase in income before tax. For further discussion of income taxes, see Note 12 - Income Taxes of Notes to Condensed Consolidated Financial Statements.
Income from discontinued operations, net of tax increased primarily due to a $251 income tax benefit associated with the sale of Hartford Funds representing the difference between the tax basis and U.S. GAAP carrying value of Hartford Funds. For further discussion of discontinued operations, see Note 17 – Discontinued Operations of Notes to Condensed Consolidated Financial Statements.
Investment Results
Composition of Invested Assets
June 30, 2026 December 31, 2025
Amount Percent Amount Percent
Fixed maturities, AFS, at fair value $ 45,824 71.6 % $ 46,041 72.5 %
Fixed maturities, at fair value using the fair value option ("FVO securities") 125 0.2 % 168 0.3 %
Equity securities, at fair value 560 0.9 % 422 0.7 %
Mortgage loans (net of allowance for credit losses ("ACL") of $49 and $49) 7,262 11.3 % 6,837 10.8 %
Limited partnerships and other alternative investments 6,135 9.6 % 5,804 9.1 %
Other investments [1] 227 0.4 % 218 0.3 %
Short-term investments 3,866 6.0 % 4,004 6.3 %
Total investments $ 63,999 100.0 % $ 63,494 100.0 %
[1]Primarily consists of equity fund investments, overseas deposits, and derivative instruments which are carried at fair value.
June 30, 2026 compared to December 31, 2025
Total investments increased primarily due to an increase in mortgage loans and limited partnerships and other alternative investments, partially offset by a decrease in fixed maturities, AFS, at fair value.
Mortgage loans increased primarily due to funding of industrial commercial whole loans.
Limited partnerships and other alternative investments increased primarily driven by additional investments and higher valuations.
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Fixed maturities, AFS, at fair value decreased primarily due to lower valuations as a result of higher interest rates.
Net Investment Income
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(Before tax) Amount Yield [1] Amount Yield [1] Amount Yield [1] Amount Yield [1]
Fixed maturities [2] $ 607 4.8 % $ 581 4.7 % $ 1,214 4.8 % $ 1,151 4.7 %
Equity securities 5 5.7 % 3 3.4 % 10 5.6 % 7 3.5 %
Mortgage loans 83 4.6 % 72 4.5 % 163 4.6 % 142 4.4 %
Limited partnerships and other alternative investments 114 7.6 % 13 1.0 % 189 6.4 % 52 2.1 %
Other [3] 16 12 12 9
Investment expense (25) (23) (54) (51)
Total net investment income 800 4.9 % 658 4.3 % 1,534 4.7 % 1,310 4.3 %
Adjustment for net investment income from limited partnerships and other alternative investments (114) (0.2) % (13) 0.3 % (189) (0.1) % (52) 0.2 %
Total net investment income excluding limited partnerships and other alternative investments $ 686 4.7 % $ 645 4.6 % $ 1,345 4.6 % $ 1,258 4.5 %
[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.
Three and six months ended June 30, 2026 compared to 2025
Total net investment income increased primarily due to higher income from limited partnerships and other alternative investments, the impact of a higher level of invested assets, and reinvesting at higher rates.
Annualized net investment income yield, excluding limited partnerships and other alternative investments, increased, primarily due to the impact of reinvesting at higher rates.
Average reinvestment rates of fixed maturities and mortgage loans, excluding U.S. Treasury securities, for both the three and six months ended June 30, 2026 was 5.4%, which was above the average yield of sales and maturities of 4.8%. Average reinvestment rates, of fixed maturities and mortgage loans, excluding U.S. Treasury securities, for the three and six months ended June 30, 2025, were 5.9% and 5.7%, respectively, which were above the average yield of sales and maturities of 4.6% and 4.7%, respectively.
For the 2026 calendar year, we estimate net investment income to increase due to a higher level of invested assets, with the yield on limited partnerships and other alternative investments to be relatively consistent with 2025. Actual net investment income is subject to variability including the impact of evolving market conditions.
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Net Realized Gains (Losses)
Three Months Ended June 30, Six Months Ended June 30,
(Before tax) 2026 2025 2026 2025
Gross gains on sales of fixed maturities $ 10 $ 19 $ 28 $ 32
Gross losses on sales of fixed maturities (36) (45) (66) (70)
Equity securities [1] 121 27 104 15
Net credit losses on fixed maturities, AFS [2] — — — 2
Change in ACL on mortgage loans [3] — — — —
Other, net [4] (31) (20) (54) (47)
Net realized gains (losses) $ 64 $ (19) $ 12 $ (68)
[1]The change in net unrealized gains on equity securities still held as of June 30, 2026, and included in net realized gains were $121 and $104 for the three and six months ended June 30, 2026, respectively. The change in net unrealized gains on equity securities still held as of June 30, 2025, and included in net realized gains were $27 and $14 for the three and six months ended June 30, 2025, respectively.
[2]See Credit Losses on Fixed Maturities, AFS and Intent-to-Sell Impairments within the Enterprise Risk Management — Investment Portfolio Risk section of this MD&A.
[3]See ACL on Mortgage Loans within the Enterprise Risk Management — Investment Portfolio Risk section of this MD&A.
[4]For the three and six months ended June 30, 2026, includes losses from transactional foreign currency revaluation of $6 and $3, respectively, and losses on non-qualifying derivatives of $13 and $5 , respectively. For the three and six months ended June 30, 2025, includes losses from transactional foreign currency revaluation of $8 and $18, respectively, and losses on non-qualifying derivatives of $11 and $11 respectively.
Three and six months ended June 30, 2026
Gross gains and losses on sales were primarily due to sales of corporate securities, tax-exempt municipals and commercial mortgage-backed securities ("CMBS").
Equity securities net gains were primarily driven by a private common stock issuer that completed an initial public offering, as well an increase in value due to higher equity market levels.
Other, net losses for the three and six month periods ended June 30, 2026, primarily included losses $3 and $37, respectively, on fixed maturities, at fair value using the fair value option due to a decline in valuation, losses of $13 and $5, respectively, on interest rate derivatives primarily driven by changes in interest rates, and losses of $6 and $3, respectively, on transactional foreign currency revaluation.
Three and six months ended June 30, 2025
Gross gains and losses on sales were primarily due to sales of tax-exempt municipals and corporate securities.
Equity securities net gains were primarily driven by an increase in value due to higher equity market levels
Other, net losses for the three and six month periods ended June 30, 2025, primarily included losses of $8 and $18, respectively, on transactional foreign currency revaluation, losses of $13 and $17, respectively, on FVO securities due to a decrease in value, and losses of $10 and $9, respectively, on equity derivatives due to higher equity market levels.
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Critical Accounting Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ, and in the past have differed, from those estimates.
The Company has identified the following estimates as critical in that they involve a higher degree of judgment and are subject to a significant degree of variability:
•property and casualty insurance product reserves, net of reinsurance;
•group LTD reserves, net of reinsurance;
•evaluation of goodwill for impairment;
•valuation of investments and derivative instruments including evaluation of credit losses on fixed maturities, AFS and ACL on mortgage loans; and
•contingencies relating to corporate litigation and regulatory matters.
In developing these estimates, management makes subjective and complex judgments that are inherently uncertain and subject to material change as facts and circumstances develop. Although variability is inherent in these estimates, management believes the amounts provided are appropriate based upon the facts available upon compilation of the financial statements. Certain of these estimates are particularly sensitive to market conditions, and deterioration and/or volatility in the worldwide debt or equity markets could have a material impact on the Condensed Consolidated Financial Statements.
The Company’s critical accounting estimates are discussed in Part II, Item 7 MD&A in the Company’s 2025 Form 10-K Annual Report. In addition, Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to Consolidated Financial Statements included in the Company's 2025 Form 10-K Annual Report should be read in conjunction with this section to assist with obtaining an understanding of the underlying accounting policies related to these estimates. The following discussion updates certain of the Company’s critical accounting estimates as of June 30, 2026.
Property & Casualty Insurance Product Reserves, Net of Reinsurance
P&C Loss and Loss Adjustment Expense Reserves, Net of Reinsurance, by Segment as of
June 30, 2026
Based on the results of the quarterly reserve review process, the Company determines the appropriate reserve adjustments, if any, to record. Recorded reserve estimates represent the Company's best estimate of the ultimate settlement amount of unpaid losses and loss adjustment expenses. The Company does not use statistical loss distributions or confidence levels in the process of determining its reserve estimate and, as a result, does not disclose reserve ranges. Assumptions used in arriving at the selected actuarial indications consider a number of factors, including the immaturity of emerged claims in recent accident years, emerging trends in the recent past, and the level of volatility within each line of business. In general, adjustments are made more quickly to more mature accident years and less volatile lines of business. Such adjustments of reserves are referred to as “prior accident year development”. Increases in previous estimates of ultimate loss costs are referred to as either an increase in prior accident year reserves or as unfavorable reserve development. Decreases in previous estimates of ultimate loss costs are referred to as either a decrease in prior accident year reserves or as favorable reserve development. Reserve development can influence the comparability of year over year underwriting results and is set forth in the paragraphs and tables that follow.
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Rollforward of Property and Casualty Insurance Product Liabilities for Unpaid Losses and LAE for the Six Months Ended June 30, 2026
Business Insurance Personal Insurance Property & Casualty Other Operations Total Property & Casualty
Beginning liabilities for unpaid losses and loss adjustment expenses, gross $ 33,175 $ 2,275 $ 2,705 $ 38,155
Reinsurance and other recoverables 4,689 28 2,006 6,723
Beginning liabilities for unpaid losses and loss adjustment expenses, net 28,486 2,247 699 31,432
Provision for unpaid losses and loss adjustment expenses
Current accident year before catastrophes 4,178 1,069 — 5,247
Current accident year catastrophes 300 152 — 452
Prior accident year development (22) (94) (36) (152)
Total provision for unpaid losses and loss adjustment expenses 4,456 1,127 (36) 5,547
Change in deferred gain on retroactive reinsurance included in other liabilities — — 36 36
Payments (3,351) (1,196) (4) (4,551)
Foreign currency adjustment (6) — — (6)
Ending liabilities for unpaid losses and loss adjustment expenses, net 29,585 2,178 695 32,458
Reinsurance and other recoverables 4,620 24 1,879 6,523
Ending liabilities for unpaid losses and loss adjustment expenses, gross $ 34,205 $ 2,202 $ 2,574 $ 38,981
Earned premiums and fee income $ 7,259 $ 1,827
Loss and loss adjustment expense paid ratio [1] 46.2 65.5
Loss and loss adjustment expense ratio 61.6 62.2
Prior accident year development (pts) [2] (0.3) (5.2)
[1]The “loss and loss adjustment expense paid ratio” represents the ratio of paid losses and loss adjustment expenses to earned premiums and fee income.
[2]“Prior accident year development (pts)” represents the ratio of prior accident year development to earned premiums.
Current Accident Year Catastrophe Losses, Net of Reinsurance
Three Months Ended June 30, 2026 Six Months Ended June 30, 2026
Business Insurance Personal Insurance Total Business Insurance Personal Insurance Total
Wind and hail 99 92 191 132 130 262
Winter storms $ (3) $ — $ (3) $ 109 $ 21 $ 130
Other international [1] 16 — 16 16 — 16
Hurricanes and tropical storms 2 1 3 2 1 3
Catastrophes before assumed reinsurance 114 93 207 259 152 411
Global assumed reinsurance business [2] 15 — 15 41 — 41
Total catastrophe losses $ 129 $ 93 $ 222 $ 300 $ 152 $ 452
[1]Includes catastrophe losses resulting from the Middle East conflict.
[2]Catastrophe losses incurred on global assumed reinsurance business are not covered under the Company's per occurrence and aggregate property catastrophe treaties. For further information on the treaty, refer to Enterprise Risk Management — Insurance Risk section of this MD&A.
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Unfavorable (Favorable) Prior Accident Year Development for the Three Months Ended June 30, 2026
Business Insurance Personal Insurance Property & Casualty Other Operations Total Property & Casualty Insurance
Workers’ compensation $ (51) $ — $ — $ (51)
Workers’ compensation discount accretion 11 — — 11
General liability 46 — — 46
Commercial property (11) — — (11)
Bond (32) — — (32)
Automobile liability 26 (24) — 2
Homeowners — (14) — (14)
Catastrophes (37) (13) — (50)
Other reserve re-estimates, net [1] (4) (8) — (12)
Prior accident year development before change in deferred gain (52) (59) — (111)
Change in deferred gain on retroactive reinsurance included in other liabilities — — — —
Total prior accident year development $ (52) $ (59) $ — $ (111)
[1]Other reserve re-estimates, net for the three months ended June 30, 2026 includes a favorable change of $(10) in personal automobile physical damage reserves.
Unfavorable (Favorable) Prior Accident Year Development for the Six Months Ended June 30, 2026
Business Insurance Personal Insurance Property & Casualty Other Operations Total Property & Casualty Insurance
Workers’ compensation $ (110) $ — $ — $ (110)
Workers’ compensation discount accretion 23 — — 23
General liability 116 — — 116
Marine 4 — — 4
Commercial property (15) — — (15)
Professional liability (4) — — (4)
Bond (32) — — (32)
Assumed reinsurance 5 — — 5
Automobile liability 26 (39) — (13)
Homeowners — (29) — (29)
Catastrophes (37) (13) — (50)
Other reserve re-estimates, net [1] 2 (13) — (11)
Prior accident year development before change in deferred gain (22) (94) — (116)
Change in deferred gain on retroactive reinsurance included in other liabilities [2] — — (36) (36)
Total prior accident year development $ (22) $ (94) $ (36) $ (152)
[1]Other reserve re-estimates, net for the six months ended June 30, 2026 includes a favorable change of $(15) in personal automobile physical damage reserves.
[2]The $36 change in deferred gain on retroactive reinsurance for the six months ended June 30, 2026 is related to amortization of the A&E ADC deferred gain under retroactive reinsurance accounting.
For discussion of the factors contributing to unfavorable (favorable) prior accident year reserve development for 2026, please refer to Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.
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Rollforward of Property and Casualty Insurance Product Liabilities for Unpaid Losses and LAE for the Six Months Ended June 30, 2025
Business Insurance Personal Insurance Property & Casualty Other Operations Total Property & Casualty Insurance
Beginning liabilities for unpaid losses and loss adjustment expenses, gross $ 31,380 $ 2,240 $ 2,784 $ 36,404
Reinsurance and other recoverables 4,637 20 2,096 6,753
Beginning liabilities for unpaid losses and loss adjustment expenses, net 26,743 2,220 688 29,651
Provision for unpaid losses and loss adjustment expenses
Current accident year before catastrophes 3,843 1,148 — 4,991
Current accident year catastrophes 394 285 — 679
Prior accident year development (229) (80) — (309)
Total provision for unpaid losses and loss adjustment expenses 4,008 1,353 — 5,361
Change in deferred gain on retroactive reinsurance included in other liabilities 56 — — 56
Payments (3,036) (1,233) (111) (4,380)
Foreign currency adjustment 39 — — 39
Ending liabilities for unpaid losses and loss adjustment expenses, net 27,810 2,340 577 30,727
Reinsurance and other recoverables 4,519 43 2,069 6,631
Ending liabilities for unpaid losses and loss adjustment expenses, gross $ 32,329 $ 2,383 $ 2,646 $ 37,358
Earned premiums and fee income $ 6,770 $ 1,846
Loss and loss adjustment expense paid ratio [1] 44.8 66.8
Loss and loss adjustment expense ratio 59.4 73.9
Prior accident year development (pts) [2] (3.4) (4.4)
[1]The “loss and loss adjustment expense paid ratio” represents the ratio of paid losses and loss adjustment expenses to earned premiums and fee income.
[2]“Prior accident year development (pts)” represents the ratio of prior accident year development to earned premiums.
Current Accident Year Catastrophe Losses, Net of Reinsurance
Three Months Ended June 30, 2025 Six Months Ended June 30, 2025
Business Insurance Personal Insurance Total Business Insurance Personal Insurance Total
Wind and hail $ 101 $ 101 $ 202 145 162 $ 307
Wildfires [1] (8) (4) (12) 145 114 259
Winter storms (2) 1 (1) 15 9 24
Catastrophes before assumed reinsurance 91 98 189 305 285 590
Global assumed reinsurance business [1] [2] 23 — 23 89 — 89
Total catastrophe losses $ 114 $ 98 $ 212 $ 394 $ 285 $ 679
[1]The three months ended June 30, 2025, included a favorable change in losses of $(12), net of reinsurance, from the January 2025 California Wildfire Event. For six months ended June 30, 2025, catastrophe losses from the January 2025 California Wildfire Event were $313, net of reinsurance, and included losses of $54 in the global assumed reinsurance business.
[2]Catastrophe losses incurred on global assumed reinsurance business are not covered under the Company's aggregate property catastrophe treaty. For further information on the treaty, refer to Enterprise Risk Management — Insurance Risk section of this MD&A.
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Unfavorable (Favorable) Prior Accident Year Development for the Three Months Ended June 30, 2025
Business Insurance Personal Insurance Property & Casualty Other Operations Total Property & Casualty Insurance
Workers’ compensation $ (61) $ — $ — $ (61)
Workers’ compensation discount accretion 11 — — 11
Commercial property (20) — — (20)
Professional liability (11) — — (11)
Bond (22) — — (22)
Automobile liability — (10) — (10)
Homeowners — (13) — (13)
Catastrophes (28) (11) — (39)
Other reserve re-estimates, net [1] 9 (7) — 2
Prior accident year development before change in deferred gain (122) (41) — (163)
Change in deferred gain on retroactive reinsurance included in other liabilities (24) — — (24)
Total prior accident year development $ (146) $ (41) $ — $ (187)
[1]Other reserve re-estimates, net for the three months ended June 30, 2025 includes a favorable change of $(8) in personal automobile physical damage reserves.
[2]The $24 change in deferred gain on retroactive reinsurance for the three months ended June 30, 2025 is related to amortization of the Navigators ADC deferred gain under retroactive reinsurance accounting.
Unfavorable (Favorable) Prior Accident Year Development for the Six Months Ended June 30, 2025
Business Insurance Personal Insurance Property & Casualty Other Operations Total Property & Casualty Insurance
Workers’ compensation $ (126) $ — $ — $ (126)
Workers’ compensation discount accretion 23 — — 23
Commercial property (23) — — (23)
Professional liability (11) — — (11)
Bond (22) — — (22)
Automobile liability — (22) — (22)
Homeowners — (31) — (31)
Catastrophes (28) (11) — (39)
Other reserve re-estimates, net [1] 14 (16) — (2)
Prior accident year development before change in deferred gain (173) (80) — (253)
Change in deferred gain on retroactive reinsurance included in other liabilities [2] (56) — — (56)
Total prior accident year development $ (229) $ (80) $ — $ (309)
[1]Other reserve re-estimates, net for the six months ended June 30, 2025 includes a favorable change of $(20) in personal automobile physical damage reserves.
[2]The $56 change in deferred gain on retroactive reinsurance for the six months ended June 30, 2025 is related to amortization of the Navigators ADC deferred gain under retroactive reinsurance accounting.
For discussion of the factors contributing to unfavorable (favorable) prior accident year reserve development for 2025, please refer to Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.
Evaluation of Goodwill for Impairment
Goodwill balances are reviewed for impairment at least annually, or more frequently if events occur or circumstances change that would indicate that a triggering event for a potential impairment has occurred. The recognition and measurement of goodwill impairment is based on the excess of the carrying value of the reporting unit over its estimated fair value, up to the amount of the reporting unit’s goodwill.
The estimated fair value of each reporting unit incorporates multiple inputs into discounted cash flow calculations including assumptions that market participants would make in valuing the reporting unit. Assumptions include projected growth, earnings forecasts, assets under management, and the weighted average cost of capital used for the purposes of discounting. Decreases in business growth, decreases in earnings projections, and
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increases in the weighted average cost of capital will all cause a reporting unit’s fair value to decrease, increasing the possibility of impairment.
Upon being classified as held for sale, the Hartford Funds reporting unit goodwill of $272 was tested for impairment. The fair value of the reporting unit significantly exceeded its carrying value; therefore, no impairment was recognized.
The annual goodwill assessment for the remaining reporting units will be completed as of October 31, 2026, unless a triggering event occurs before then.
Reportable Segment and Corporate Operating Summaries
Business Insurance - Results of Operations
Underwriting Summary
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Change 2026 2025 Change
Written premiums $ 4,022 $ 3,816 5 % $ 7,926 $ 7,502 6 %
Change in unearned premium reserve 359 392 (8 %) 691 754 (8) %
Earned premiums 3,663 3,424 7 % 7,235 6,748 7 %
Fee income 12 11 9 % 24 22 9 %
Losses and loss adjustment expenses
Current accident year before catastrophes 2,134 1,952 9 % 4,178 3,843 9 %
Current accident year catastrophes [1] 129 114 13 % 300 394 (24) %
Prior accident year development [1] (52) (146) 64 % (22) (229) 90 %
Total losses and loss adjustment expenses 2,211 1,920 15 % 4,456 4,008 11 %
Amortization of DAC 590 546 8 % 1,167 1,077 8 %
Insurance operating costs 539 507 6 % 1,097 1,019 8 %
Amortization of other intangible assets 7 7 — % 14 14 — %
Dividends to policyholders 12 11 9 % 24 21 14 %
Underwriting gain 316 444 (29 %) 501 631 (21) %
Net investment income [2] 556 449 24 % 1,061 886 20 %
Net realized gains (losses) [2] 12 (20) 160 % (7) (44) 84 %
Other income (expense) [3] (1) (1) — % — (2) 100 %
Income before income taxes 883 872 1 % 1,555 1,471 6 %
Income tax expense [4] 179 176 2 % 315 298 6 %
Net income $ 704 $ 696 1 % $ 1,240 $ 1,173 6 %
[1]For additional information on current accident year catastrophes and prior accident year development, see MD&A - Critical Accounting Estimates, Property & Casualty Insurance Product Reserves, Net of Reinsurance and Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.
[2]For discussion of consolidated investment results, see MD&A - Investment Results.
[3]Includes integration costs in connection with the 2019 acquisition of Navigators Group.
[4]For discussion of income taxes, see Note 12 - Income Taxes of Notes to Condensed Consolidated Financial Statements.
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Premium Measures
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Small Business:
Net new business premium $ 334 $ 305 $ 667 $ 603
Policy count retention 83 % 83 % 84 % 84 %
Renewal written price increases 4.1 % 6.0 % 4.0 % 6.2 %
Renewal earned price increases 5.3 % 7.5 % 5.6 % 7.4 %
Policies in-force as of end of period (in thousands) 1,708 1,615
Middle Market [1]:
Net new business premium $ 203 $ 190 $ 390 $ 378
Premium retention 81 % 82 % 82 % 82 %
Renewal written price increases 3.5 % 6.1 % 4.0 % 6.5 %
Renewal earned price increases 5.4 % 7.1 % 5.7 % 7.1 %
Global Specialty:
Global specialty gross new business premium [2] $ 274 $ 278 $ 507 $ 503
Renewal written price increases [3] 5.5 % 5.1 % 5.2 % 5.5 %
Renewal earned price increases [3] 4.8 % 6.3 % 4.8 % 6.4 %
[1]Except for net new business premium, metrics for middle market exclude loss sensitive and programs businesses.
[2]Excludes Global Re and is before ceded reinsurance.
[3]Excludes Global Re, offshore energy policies, credit and political risk insurance ("CPRI") policies, political violence and terrorism ("PV&T") policies, and any business under which the managing agent of our Lloyd's Syndicate delegates underwriting authority to coverholders and other third parties.
Underwriting Ratios
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Change 2026 2025 Change
Loss and loss adjustment expense ratio 60.4 56.1 4.3 61.6 59.4 2.2
Expense ratio 30.7 30.6 0.1 31.2 30.9 0.3
Policyholder dividend ratio 0.3 0.3 — 0.3 0.3 —
Combined ratio 91.4 87.0 4.4 93.1 90.6 2.5
Adjustments to reconcile combined ratio to underlying combined ratio:
Current accident year catastrophes and prior accident year development (2.1) 1.0 (3.1) (3.8) (2.4) (1.4)
Underlying combined ratio 89.3 88.0 1.3 89.2 88.2 1.0
Underlying loss and loss adjustment expense ratio 58.3 57.0 1.3 57.7 57.0 0.7
Current accident year catastrophes 3.5 3.3 0.2 4.1 5.8 (1.7)
Prior accident year development (1.4) (4.3) 2.9 (0.3) (3.4) 3.1
Total loss and loss adjustment expense ratio 60.4 56.1 4.3 61.6 59.4 2.2
Loss and loss adjustment expense ratio 60.4 56.1 4.3 61.6 59.4 2.2
Adjustments to reconcile loss and loss adjustment expense ratio to underlying loss and loss adjustment expense ratio:
Current accident year catastrophes and prior accident year development (2.1) 1.0 (3.1) (3.8) (2.4) (1.4)
Underlying loss and loss adjustment expense ratio 58.3 57.0 1.3 57.7 57.0 0.7
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Net Income
Three and six months ended June 30, 2026 compared to 2025
Net income for the three and six month periods increased primarily due to higher net investment income, and for the three month period, a change from net realized losses to net realized gains. The six month period also included lower net realized losses. For both periods, these favorable impacts were partially offset by lower underwriting gains. For further discussion of investment results, see MD&A - Investment Results.
Underwriting Gain
Three and six months ended June 30, 2026 compared to 2025
Underwriting gain for the three and six month periods decreased due to less favorable prior accident year development in the current year, higher underwriting expenses, and a higher underlying loss and LAE ratio, partially offset by earned premium growth. For the six month period, these unfavorable impacts were also partially offset by lower CAY catastrophe losses.
Expense ratio for the three and six months ended June 30, 2026 is generally consistent with the prior year, with higher commissions expenses, staffing costs, and technology investments in our business being partially offset by the impact of earned premium growth.
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Earned Premiums
[1]Other earned premiums of $16 and $18 for the three months ended June 30, 2025, and 2026, respectively and $32 and $36 for the six months ended June 30, 2025, and 2026, respectively.
Written Premiums
[1]Other written premiums of $16 and $18 for the three months ended June 30, 2025, and 2026, respectively and $32 and $36 for the six months ended June 30, 2025, and 2026, respectively.
Three and six months ended June 30, 2026 compared to 2025
Earned premiums for the three and six months ended June 30, 2026 increased due to written premium increases over the prior twelve months.
Written premiums for the three and six months ended June 30, 2026 increased driven by growth across small business, middle & large business and global specialty.
•Small business written premium increased driven by renewal written price increases in almost all lines, as well as higher new business premium. Written premium grew across all lines of business.
•Middle & large business written premium increased driven by renewal written price increases in almost all lines. Written premium grew across industry verticals and the large and complex lines, and for the three months ended, general industries and large property. For the six months ended, premium growth was partially offset by decreases in general industries and large property.
•Global specialty written premium increased primarily driven by written price increases across most U.S. Insurance lines. Written premiums also grew in global reinsurance, primarily in specialty casualty, and for the six months ended, credit risk.
Renewal written price increases were recognized in most lines for both the three and six months ended June 30, 2026, though have moderated from the prior year.
•In small business, renewal written price increases were lower than prior year levels overall, with high single-digit price increases in package business and automobile. Workers' compensation pricing was slightly negative.
•In middle market, renewal written price increases were lower than prior year levels overall, with high single-digit price increases in automobile and general liability lines and low single-digit price increases in property. Workers' compensation pricing was positive.
•In global specialty, for the three month period, renewal written price increases were higher than prior year levels, and for the six month period, were lower than prior year levels. Price increases were in the mid single-digits overall with US wholesale in the low double-digits.
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Underlying Loss and Loss Adjustment Expense Ratio
Three and six months ended June 30, 2026 compared to 2025
Underlying Loss and Loss Adjustment Expense Ratio for the three and six months ended June 30, 2026 increased primarily due to higher non-cat property losses and a change in business mix.
Catastrophes and Unfavorable (Favorable) Prior Accident Year Development
Three and six months ended June 30, 2026 compared to 2025
Current accident year catastrophe losses increased for the three month period and decreased for the six month period. CAY catastrophe losses for both the three and six months ended June 30, 2026, primarily included losses from tornado, wind and hail events, as well as winter storms for the six month period.
CAY catastrophe losses for the three months ended June 30, 2025 primarily included losses from tornado, wind and hail events. CAY catastrophe losses for the six months ended June 30, 2025 included a loss of $199, net of reinsurance, from the January 2025 California Wildfire Event, as well as losses from tornado, wind and hail events.
Prior accident year development was net favorable for the three and six months ended June 30, 2026 and included reserve decreases related to workers' compensation, catastrophes, and bond, partially offset by an increase in reserves for general liability and commercial automobile liability. For additional information, refer to Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.
Prior accident year development was net favorable for the three and six months ended June 30, 2025 and primarily included reserve decreases for workers' compensation, catastrophes, commercial property and bond. Also included are benefits of $24 and $56 related to amortization of the Navigators ADC deferred gain for the three and six month periods, respectively. The Navigators' ADC deferred gain has been fully amortized as of September 30, 2025. For additional information regarding the Navigators ADC reinsurance agreement, refer to Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.
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Personal Insurance - Results of Operations
Underwriting Summary
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Change 2026 2025 Change
Written premiums $ 915 $ 980 (7 %) $ 1,777 $ 1,893 (6) %
Change in unearned premium reserve 10 49 (80 %) (35) 63 NM
Earned premiums 905 931 (3 %) 1,812 1,830 (1) %
Fee income 7 8 (13 %) 15 16 (6) %
Losses and loss adjustment expenses
Current accident year before catastrophes 543 585 (7 %) 1,069 1,148 (7) %
Current accident year catastrophes [1] 93 98 (5 %) 152 285 (47) %
Prior accident year development [1] (59) (41) (44 %) (94) (80) (18) %
Total losses and loss adjustment expenses 577 642 (10 %) 1,127 1,353 (17) %
Amortization of DAC 70 70 — % 141 138 2 %
Insurance operating costs 175 172 2 % 355 354 — %
Amortization of other intangible assets — — — % 1 1 — %
Underwriting gain 90 55 64 % 203 — NM
Net investment income [2] 67 58 16 % 129 115 12 %
Net realized gains (losses) [2] 4 (4) NM — (6) 100 %
Net servicing and other income (expense) [3] 2 5 (60 %) 5 10 (50) %
Income before income taxes 163 114 43 % 337 119 183 %
Income tax expense [4] 33 23 43 % 68 23 196 %
Net income $ 130 $ 91 43 % $ 269 $ 96 180 %
[1]For additional information on current accident year catastrophes and prior accident year development, see MD&A - Critical Accounting Estimates, Property & Casualty Insurance Product Reserves, Net of Reinsurance and Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.
[2]For discussion of consolidated investment results, see MD&A - Investment Results.
[3]Includes servicing revenues of $25 and $24 for the three months ended June 30, 2026 and 2025, respectively, and $47 and $44 for the six months ended June 30, 2026 and 2025, respectively. Includes servicing expenses of $21 and $19 for the three months ended June 30, 2026 and 2025, respectively, and $39 and $35 for the six months ended June 30, 2026 and 2025, respectively .
[4]For discussion of income taxes, see Note 12 - Income Taxes of Notes to Condensed Consolidated Financial Statements.
Written and Earned Premiums
Three Months Ended June 30, Six Months Ended June 30,
Written Premiums 2026 2025 Change 2026 2025 Change
Product Line
Automobile $ 567 $ 633 (10 %) $ 1,132 $ 1,260 (10 %)
Homeowners 348 347 — % 645 633 2 %
Total $ 915 $ 980 (7 %) $ 1,777 $ 1,893 (6 %)
Earned Premiums
Product Line
Automobile $ 587 $ 628 (7 %) $ 1,180 $ 1,246 (5 %)
Homeowners 318 303 5 % 632 584 8 %
Total $ 905 $ 931 (3 %) $ 1,812 $ 1,830 (1 %)
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Premium Measures
Three Months Ended June 30, Six Months Ended June 30,
Premium Measures 2026 2025 2026 2025
Policies in-force end of period (in thousands)
Automobile 990 1,121
Homeowners 703 724
Net new business premium
Automobile $ 51 $ 81 $ 104 $ 162
Homeowners $ 52 $ 69 $ 95 $ 131
Effective Policy Count Retention
Automobile 81 % 79 % 80 % 79 %
Homeowners 82 % 83 % 82 % 83 %
Renewal written price increase
Automobile 5.5 % 13.9 % 6.1 % 14.8 %
Homeowners 10.4 % 12.6 % 11.0 % 12.5 %
Renewal earned price increase
Automobile 9.1 % 17.4 % 10.2 % 18.7 %
Homeowners 12.0 % 13.7 % 12.1 % 14.1 %
Underwriting Ratios
Three Months Ended June 30, Six Months Ended June 30,
Underwriting Ratios 2026 2025 Change 2026 2025 Change
Loss and loss adjustment expense ratio 63.8 69.0 (5.2) 62.2 73.9 (11.7)
Expense Ratio 26.3 25.1 1.2 26.7 26.1 0.6
Combined Ratio 90.1 94.1 (4.0) 88.9 100.0 (11.1)
Adjustment to reconcile combined ratio to underlying combined ratio:
Current accident year catastrophes and prior year development (3.8) (6.1) 2.3 (3.2) (11.2) 8.0
Underlying combined ratio 86.3 88.0 (1.7) 85.7 88.8 (3.1)
Underlying loss and loss adjustment expense ratio 60.0 62.8 (2.8) 59.0 62.7 (3.7)
Current accident year catastrophes 10.3 10.5 (0.2) 8.4 15.6 (7.2)
Prior accident year development (6.5) (4.4) (2.1) (5.2) (4.4) (0.8)
Total loss and loss adjustment expense ratio 63.8 69.0 (5.2) 62.2 73.9 (11.7)
Loss and loss adjustment expense ratio 63.8 69.0 (5.2) 62.2 73.9 (11.7)
Adjustment to reconcile loss and loss adjustment expense ratio to underlying loss and loss adjustment expense ratio:
Current accident year catastrophes and prior year development (3.8) (6.1) 2.3 (3.2) (11.2) 8.0
Underlying loss and loss adjustment expense ratio 60.0 62.8 (2.8) 59.0 62.7 (3.7)
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Product Combined Ratios
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Change 2026 2025 Change
Automobile
Combined ratio 88.5 94.0 (5.5) 89.1 93.8 (4.7)
Adjustment to reconcile combined ratio to underlying combined ratio:
Current accident year catastrophes (1.4) (1.8) 0.4 (1.1) (1.5) 0.4
Prior accident year development 6.2 3.0 3.2 4.8 3.4 1.4
Underlying combined ratio 93.3 95.2 (1.9) 92.8 95.7 (2.9)
Homeowners
Combined ratio 92.6 94.4 (1.8) 88.2 113.1 (24.9)
Adjustment to reconcile combined ratio to underlying combined ratio:
Current accident year catastrophes (26.6) (28.8) 2.2 (22.1) (45.6) 23.5
Prior accident year development 7.2 7.1 0.1 6.0 6.4 (0.4)
Underlying combined ratio 73.3 72.7 0.6 72.1 73.9 (1.8)
Net income
Three and six months ended June 30, 2026 compared to 2025
Net income increased for the three and six month periods, largely driven by an increase in underwriting gain, as well as higher net investment income and, in the three month period, a change from net realized capital losses to net realized capital gains.
Underwriting gain
Three and six months ended June 30, 2026 compared to 2025
Underwriting gain increased for the three and six month periods due to lower CAY catastrophe losses, more favorable prior year development, and an improvement in the underlying loss and LAE ratio.
Expense ratio increased for the three and six months ended June 30, 2026 due to the effect of a decrease in earned premium, as well as a higher commission ratio primarily due to business mix.
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Earned Premiums
Written Premiums
Three and six months ended June 30, 2026 compared to 2025
Earned premiums decreased in both the three and six month periods due to lower earned premiums in automobile, partially offset by higher earned premiums in homeowners.
Written premiums decreased in both three and six month periods due to lower written premiums in automobile, partially offset by higher written premiums in homeowners.
Renewal written pricing moderated for both automobile and homeowners in both the three and six months ended June 30, 2026, primarily in response to moderating loss cost trends.
Effective Policy count retention increased for automobile and was relatively stable for homeowners in both the three and six months ended June 30, 2026, in response to moderating renewal written pricing increases.
Policies in-force as of June 30, 2026 compared to June 30, 2025 declined for automobile and for homeowners, reflecting the level of new business in relation to non-renewed policies.
Underlying Loss and Loss Adjustment Expense Ratio
Three and six months ended June 30, 2026 compared to 2025
Underlying loss and LAE ratio decreased for both automobile and homeowners in both the three and six months ended June 30, 2026, primarily due to the impact of earned pricing increases outpacing loss cost trends, which moderated slightly compared to prior year. The automobile loss cost trend continues to recognize higher attorney representation rates.
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Current Accident Year Catastrophes and Unfavorable (Favorable) Prior Accident Year Development
Three and six months ended June 30, 2026 compared to 2025
Current accident year catastrophe losses decreased in both the three and six months ended June 30, 2026. CAY catastrophe losses for both the three and six months ended June 30, 2026, primarily included losses from tornado, wind and hail events, as well as winter storms for the six month period.
CAY catastrophe losses for the three months ended June 30, 2025 included losses from tornado, wind and hail events. CAY catastrophe losses for the six months ended June 30, 2025 included a loss of $114, net of reinsurance, from the January 2025 California Wildfire Event, as well as losses from tornado, wind and hail events.
Prior accident year development was favorable for both the three and six months ended June 30, 2026, primarily driven by lower estimated severity on automobile liability, homeowners, and automobile physical damage and lower estimated allocated loss adjustment expenses. Prior accident year development was favorable for the three and six months ended June 30, 2025, primarily driven by lower estimated severity on homeowners, automobile physical damage, automobile liability and catastrophes.
Property & Casualty Other Operations - Results of Operations
Underwriting Summary
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Change 2026 2025 Change
Losses and loss adjustment expenses
Prior accident year development [1] $ — $ — — % $ (36) $ — NM
Total losses and loss adjustment expenses — — — % (36) — NM
Insurance operating costs 2 2 — % 4 4 — %
Underwriting gain (loss) (2) (2) — % 32 (4) NM
Net investment income [2] 22 19 16 % 42 37 14 %
Net realized gains (losses) [2] 1 (2) 150 % — (2) 100 %
Income before income taxes 21 15 40 % 74 31 139 %
Income tax expense [3] 4 2 100 % 15 5 NM
Net income $ 17 $ 13 31 % $ 59 $ 26 127 %
[1]For additional information on prior accident year development, see Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.
[2]For discussion of consolidated investment results, see MD&A - Investment Results.
[3]For discussion of income taxes, see Note 12 - Income Taxes of Notes to Condensed Consolidated Financial Statements.
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Net Income
Three and six months ended June 30, 2026 compared to 2025
Net income increased for the three month period, driven by an increase in net investment income and a change from net realized losses to net realized gains. Net income increased for the six month period, driven by a change from an underwriting loss to an underwriting gain and an increase in net investment income.
Underwriting gain (loss) remained unchanged for the three month period, and changed from a loss to a gain for the six month period due to a benefit of $36 related to amortization of the A&E ADC deferred gain. For additional information regarding the ADC reinsurance agreement refer to Note 9 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Condensed Consolidated Financial Statements.
Employee Benefits - Results of Operations
Operating Summary
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Change 2026 2025 Change
Premiums and other considerations $ 1,767 $ 1,663 6 % $ 3,490 $ 3,331 5 %
Net investment income [1] 137 118 16 % 268 244 10 %
Net realized gains (losses) [1] 9 (16) 156 % (2) (20) 90 %
Total revenues 1,913 1,765 8 % 3,756 3,555 6 %
Benefits, losses and loss adjustment expenses 1,291 1,150 12 % 2,529 2,349 8 %
Amortization of DAC 9 9 — % 17 17 — %
Insurance operating costs and other expenses 417 407 2 % 856 813 5 %
Amortization of other intangible assets 10 10 — % 20 20 — %
Total benefits, losses and expenses 1,727 1,576 10 % 3,422 3,199 7 %
Income before income taxes 186 189 (2 %) 334 356 (6) %
Income tax expense [2] 39 39 — % 69 73 (5) %
Net income $ 147 $ 150 (2 %) $ 265 $ 283 (6) %
[1]For discussion of consolidated investment results, see MD&A - Investment Results.
[2]For discussion of income taxes, see Note 12 - Income Taxes of Notes to Condensed Consolidated Financial Statements.
Premiums and Other Considerations
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Change 2026 2025 Change
Fully insured – ongoing premiums $ 1,676 $ 1,602 5 % $ 3,330 $ 3,214 4 %
Buyout premiums 35 4 NM 47 4 NM
Fee income 56 57 (2 %) 113 113 — %
Total premiums and other considerations $ 1,767 $ 1,663 6 % $ 3,490 $ 3,331 5 %
Fully insured ongoing sales $ 140 $ 107 31 % $ 722 $ 488 48 %
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Ratios, Excluding Buyouts
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Change 2026 2025 Change
Group disability loss ratio 74.8 % 68.5 % 6.3 73.7 % 68.8 % 4.9
Group life loss ratio 74.2 % 74.3 % (0.1) 73.7 % 77.1 % (3.4)
Total loss ratio 72.5 % 69.1 % 3.4 72.1 % 70.5 % 1.6
Expense ratio 25.2 % 25.7 % (0.5) 25.9 % 25.5 % 0.4
Margin
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Change 2026 2025 Change
Net income margin 7.7 % 8.5 % (0.8) 7.1 % 8.0 % (0.9)
Adjustments to reconcile net income margin to core earnings margin:
Net realized (gains) losses, before tax (0.5 %) 0.8 % (1.3) — % 0.5 % (0.5)
Income tax expense (benefit) 0.1 % (0.1 %) 0.2 — % (0.1 %) 0.1
Impact of excluding buyouts from denominator of core earnings margin 0.1 % — % 0.1 0.1 % — % 0.1
Core earnings margin 7.4 % 9.2 % (1.8) 7.2 % 8.4 % (1.2)
Net Income
Three and six months ended June 30, 2026 compared to 2025
Net income decreased in the three month period primarily due to a higher group disability loss ratio, partially offset by a change from net realized losses to net realized gains, increased net investment income, and a lower expense ratio. For the six month period, net income decreased due to a higher group disability loss ratio, a higher expense ratio, partially offset by a lower group life loss ratio, increased net investment income, and lower net realized losses.
Insurance operating costs and other expenses increased in the three and six month periods due to the impact from higher fully insured ongoing premium, including higher staffing costs, and an increase in technology costs.
Fully Insured Ongoing Premiums
[1]Other of $120 and $135 for the three months ended June 30, 2025 and 2026 respectively, and $238 and $270 six months ended June 30, 2025 and 2026, respectively which includes other group coverages such as retiree health insurance, critical illness, accident and hospital indemnity coverages.
Three and six months ended June 30, 2026 compared to 2025
Fully insured ongoing premiums in the three and six month periods increased due to higher new business sales across all products, an increase in exposure on existing accounts, and persistency in excess of 90%.
Fully insured ongoing sales increased in the three and six month periods, driven by higher group life, group disability, and supplemental health sales. Group disability sales include the results of three new states implementing paid family and medical leave coverage in 2026.
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Ratios
Three and six months ended June 30, 2026 compared to 2025
Loss ratio increased 3.4 points and 1.6 points for the three months and six months ended June 30, 2026, respectively, compared to the prior year period primarily driven by a higher group disability ratio, partially offset by a lower group life loss ratio. The group disability loss ratio increased 6.3 points for the three month period, driven by increased claim incidence across short and long-term disability and less favorable long-term disability claim recoveries compared with the prior year although in line with long-term expectations. The group disability ratio increased 4.9 points for the six month period, driven by increased claim incidence across short and long-term disability products and less favorable long-term disability claim recoveries, partially offset by continued paid family and medical leave pricing actions. The group life loss ratio decreased 0.1 points and 3.4 points for the three month and six month periods, respectively, due to lower mortality across both term and accidental life products.
Expense ratio decreased for the three months ended June 30, 2026 driven by the impact of earned premium growth and a lower commission ratio, partially offset by higher technology costs. For the six months ended June 30, 2026, the increase reflects higher staffing and technology costs.
Corporate - Results of Operations
Operating Summary
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Change 2026 2025 Change
Fee income [1] $ 11 $ 10 10 % $ 21 $ 21 — %
Other revenue 8 5 60 % 13 6 117 %
Net investment income [2] 18 14 29 % 34 28 21 %
Net realized gains [2] 38 23 65 % 21 4 NM
Total revenues 75 52 44 % 89 59 51 %
Benefits, losses and loss adjustment expenses [3] 2 — NM 3 2 50 %
Insurance operating costs and other expenses [1] 45 18 150 % 64 36 78 %
Interest expense [4] 50 50 — % 100 100 — %
Total benefits, losses and expenses 97 68 43 % 167 138 21 %
Loss from continuing operations before income taxes (22) (16) (38 %) (78) (79) 1 %
Income tax benefit [5] (4) (4) — % (29) (23) (26 %)
Loss from continuing operations, net of tax (18) (12) (50 %) (49) (56) 13 %
Income from discontinued operations, net of tax 318 57 NM 370 103 NM
Net income 300 45 NM 321 47 NM
Preferred stock dividends 5 5 — % 10 10 — %
Net income available to common stockholders $ 295 $ 40 NM $ 311 $ 37 NM
[1]Includes investment management fees and expenses related to managing third-party assets.
[2]For discussion of consolidated investment results, see MD&A - Investment Results.
[3]Includes benefits expense on life and annuity business previously underwritten by the Company.
[4]For discussion of debt, see Note 13 - Debt of Notes to Consolidated Financial Statements in The Hartford's 2025 Form 10-K Annual Report.
[5]For discussion of income taxes, see Note 12 - Income Taxes of Notes to Condensed Consolidated Financial Statements.
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Net income available to common stockholders
Three and six months ended June 30, 2026 compared to 2025
Net income available to common stockholders increased for the three and six months ended June 30, 2026, primarily driven by increased income from discontinued operations, net of tax, partially offset by a loss on disposal of real estate reported in insurance operating costs and other expenses.
Income from discontinued operations, net of tax increased for the three and six months ended June 30, 2026, due to a $251 income tax benefit associated with the sale of Hartford Funds representing the difference between the tax basis and the U.S. GAAP carrying value of Hartford Funds. For further discussion of discontinued operations, see Note 17 - Discontinued Operations of Notes to Condensed Consolidated Financial Statements.
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Enterprise Risk Management
The Company’s Board of Directors has ultimate responsibility for risk oversight, as described more fully in our Proxy Statement, while management is tasked with the day-to-day management of the Company’s risks.
The Company manages and monitors risk through risk policies, controls and limits. At the senior management level, an Enterprise Risk and Capital Committee (“ERCC”) oversees the risk profile and risk management practices of the Company.
The Company's enterprise risk management ("ERM") function supports the ERCC and functional committees, and is tasked with, among other things:
•risk identification and assessment;
•the development of risk appetites, tolerances, and limits;
•risk monitoring; and
•internal and external risk reporting.
The Company categorizes its main risks as insurance risk, operational risk and financial risk. Insurance risk and financial risk are described in more detail below. Operational risk, including cybersecurity, and specific risk tolerances for natural catastrophes, terrorism and pandemic risk are described in the ERM section of the MD&A in The Hartford’s 2025 Form 10-K Annual Report.
Insurance Risk
Insurance risk is the risk of losses of both a catastrophic and non-catastrophic nature on the P&C and Employee Benefits products the Company has sold. Catastrophe insurance risk is the exposure arising from both natural catastrophes (e.g., weather, earthquakes, wildfires, pandemics) and man-made catastrophes (e.g., terrorism, cyber-attacks) that create a concentration or aggregation of loss across the Company's insurance or asset portfolios.
Sources of Insurance Risk Non-catastrophe insurance risks exist within each of the Company's segments and include:
•Property- Risk of loss to personal or commercial property from automobile related accidents, weather, explosions, smoke, shaking, fire, theft, vandalism, inadequate installation, faulty equipment, collisions and falling objects, and/or machinery mechanical breakdown resulting in physical damage, losses from PV&T and other covered perils.
•Liability- Risk of loss from automobile related accidents, uninsured and under-insured drivers, lawsuits from accidents, defective products, breach of warranty, negligent acts by professional practitioners, environmental claims, latent exposures, fraud, coercion, forgery, failure to fulfill obligations per contract surety, liability from errors and omissions, losses from CPRI coverages, losses from derivative lawsuits, and other securities actions and covered perils.
•Mortality- Risk of loss from unexpected trends in insured deaths impacting timing of payouts from group life insurance, personal or commercial automobile related accidents, and death of employees or executives during the course of employment, while on disability, or while collecting workers compensation benefits.
•Morbidity- Risk of loss to an insured from illness incurred during the course of employment or illness from other covered perils.
•Disability- Risk of loss incurred from personal or commercial automobile related losses, accidents arising outside of the workplace, injuries or accidents incurred during the course of employment, or from equipment, with each loss resulting in short-term or long-term disability payments.
•Longevity- Risk of loss from increased life expectancy trends among policyholders receiving long-term benefit payments.
•Cyber Insurance- Risk of loss to property, breach of data and business interruption from various types of cyber-attacks.
Catastrophe risk primarily arises in the property, automobile, workers' compensation, casualty, group life, and group disability lines of business but could also arise from other coverages such as losses under PV&T and CPRI policies. See the term Current Accident Year Catastrophe Ratio within the Key Performance Measures and Ratios section of MD&A for an explanation of how the Company defines catastrophe losses in its financial reporting.
Impact Non-catastrophe insurance risk can arise from unexpected loss experience, underpriced business and/or underestimation of loss reserves and can have significant effects on the Company’s earnings. Catastrophe insurance risk can arise from various unpredictable events and can have significant effects on the Company's earnings and may result in losses that could constrain its liquidity.
Management The Company's policies and procedures for managing these risks include disciplined underwriting protocols, exposure controls, sophisticated risk-based pricing, risk modeling, risk transfer, and capital management strategies. The Company has established underwriting guidelines for both individual risks, including individual policy limits, and risks in the aggregate, including aggregate exposure limits by geographic zone and peril. The Company uses both internal and third-party models to estimate the potential loss resulting from various catastrophe events and the potential financial impact those events would have on the Company's financial position and results of operations across its businesses.
The Hartford closely monitors scientific literature on climate change to help identify climate change risks impacting our business. We use data from the scientific community and other outside experts including partnerships with third-party catastrophe modeling firms to inform our risk management activities and stay abreast of potential implications of climate-related impacts that we incorporate into our risk assessment. We regularly study these climate change implications and incorporate these risks into our catastrophe risk assessment
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and management strategy through product pricing, underwriting and management of aggregate risk to manage implications of severe weather and climate change in our insurance portfolio.
In addition, certain insurance products offered by The Hartford provide coverage for losses incurred due to cyber events and the Company has assessed and modeled how those products would respond to different events in order to manage its aggregate exposure to losses incurred under the insurance policies we sell. The Company models numerous deterministic scenarios including losses caused by malware, data breach, distributed denial of service attacks, intrusions of cloud environments and attacks of power grids.
Among specific risk tolerances set by the Company, risk limits are set for natural catastrophes, terrorism risk and pandemic risk.
Reinsurance as a Risk Management Strategy
The Company uses reinsurance to transfer certain risks to reinsurance companies based on specific geographic or risk concentrations. A variety of traditional reinsurance products are used as part of the Company's risk management strategy, including excess of loss occurrence-based products that reinsure property and workers' compensation exposures, and individual risk (including facultative reinsurance) or quota share arrangements that reinsure losses from specific classes or lines of business. The Company has no significant finite risk contracts in place and the statutory surplus benefit from all such prior year contracts is immaterial. The Hartford also participates in governmentally administered reinsurance facilities such as the Florida Hurricane Catastrophe Fund (“FHCF”), the Terrorism Risk Insurance Program Reauthorization Act (“TRIPRA") and other reinsurance programs relating to particular risks or specific lines of business.
Reinsurance for Catastrophes- The Company utilizes various reinsurance programs to mitigate catastrophe losses including excess of loss occurrence-based treaties covering property and workers’ compensation, catastrophe bonds, an aggregate property catastrophe treaty, and individual risk agreements (including facultative reinsurance) that reinsure losses from specific classes or lines of business. The occurrence property catastrophe treaty and workers’ compensation catastrophe treaties beginning with the January 1, 2021 renewal do not cover pandemic losses, as most industry reinsurance programs exclude communicable disease. The Company has reinsurance in place to cover individual group life losses in excess of $1.25 per person.
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Primary Catastrophe Treaty Reinsurance Coverages as of June 30, 2026 [1]
Portion of losses reinsured Portion of losses retained by The Hartford
Per Occurrence Property Catastrophe Treaty from 1/1/2026 to 12/31/2026 [1] [2]
Losses of $0 to $200 None 100% retained
Losses of $200 to $350 for earthquakes and named hurricanes and tropical storms [3] None 100% retained
Losses of $200 to $350 from one event other than earthquakes and named hurricanes and tropical storms [3] 40% of $150 in excess of $200 60% co-participation
Losses of $350 to $500 from one event (all perils) 75% of $150 in excess of $350 25% co-participation
Losses of $500 to $1.30 billion from one event [4] (all perils) 90% of $800 in excess of $500 10% co-participation
Per Occurrence Property Catastrophe Bonds from 1/1/2026 to 12/31/2026 [5]
Losses of $1.29 billion to $1.62 billion for tropical cyclone and earthquake events [6] 60.79% of $329 in excess of $1.29 billion 39.21% of $329 in excess of $1.29 billion
Losses of $1.60 billion to $1.90 billion for tropical cyclone and earthquake events [6] 90% of $300 in excess of $1.60 billion 10% of $300 in excess of $1.60 billion
Aggregate Property Catastrophe Treaty for 1/1/2026 to 12/31/2026 [7]
$0 to $750 of aggregate losses None 100% Retained
$750 to $950 of aggregate losses 100% None
Workers' Compensation Catastrophe Treaty for 1/1/2026 to 12/31/2026
Losses of $0 to $100 from one event None 100% Retained
Losses of $100 to $450 from one event [8] 80% of $350 in excess of $100 20% co-participation
[1]These agreements do not cover the assumed reinsurance business which purchases its own retrocessional coverage.
[2]In addition to the Per Occurrence Property Catastrophe Treaty, for Florida homeowners wind events, The Hartford has purchased the mandatory FHCF reinsurance for the annual period starting June 1, 2026. Retention and coverage varies by writing company. For the 2026 - 2027 period, the writing company with the largest coverage under FHCF is Hartford Insurance Company of the Midwest, with coverage of $41 in per event losses in excess of a $26 retention (estimates are based on best available information at this time and are periodically updated as information is made available by Florida).
[3]Named hurricanes and tropical storms are defined as any storm or storm system declared to be a hurricane or tropical storm by the US National Hurricane Center, US Weather Prediction Center, or their successor organizations (being divisions of the US National Weather Service).
[4]Portions of this layer of coverage extend beyond a traditional one year term.
[5] For further information on the Company's catastrophe bond, see MD&A - Enterprise Risk Management, Insurance Risk included in the Company's 2025 Form 10-K Annual report.
[6] Tropical cyclones are defined as a storm or storm system that has been declared by National Weather Service or any division or agency thereof (including the National Hurricane Center or the Weather Prediction Center) or any of their successors to be a hurricane, tropical storm, or tropical depression.
[7] The aggregate treaty is not limited to a single event; rather, it is designed to provide reinsurance protection for the aggregate of all catastrophe events (up to $350 per event), either designated by the Property Claim Services office of Verisk or, for international business, net losses arising from two or more risks involved in the same loss occurrence totaling at least $500 thousand. All catastrophe losses, except assumed reinsurance business losses, apply toward satisfying the $750 attachment point under the aggregate treaty.
[8] In addition to the limits shown, the workers' compensation reinsurance includes a non-catastrophe, industrial accident layer, providing coverage for 80% of $25 in per event losses in excess of a $25 retention.
In addition to the property catastrophe reinsurance coverage described in the above table, the Company has other reinsurance agreements that cover property catastrophe losses, some of which provide for reinstatement of limits in the event of a loss with reinstatement provisions varying depending on the layer of coverage. The Per Occurrence Property Catastrophe Treaty, and Workers' Compensation Catastrophe Treaty include a provision to reinstate one limit in the event that a catastrophe loss exhausts limits on one or more layers under the treaties.
Reinsurance for Terrorism- For the risk of terrorism, private sector catastrophe reinsurance capacity is generally limited and largely unavailable for terrorism losses caused by nuclear, biological, chemical or radiological attacks. As such, the Company's principal reinsurance protection against large-scale terrorist attacks is the coverage currently provided through TRIPRA to the end of 2027.
TRIPRA provides a backstop for insurance-related losses resulting from any “act of terrorism”, which is certified by the Secretary of the Treasury, in consultation with the Secretary of
Homeland Security and the Attorney General, for losses that exceed a threshold of industry losses of $200. Under the program, in any one calendar year, the federal government will pay a percentage of losses incurred from a certified act of terrorism after an insurer's losses exceed 20% of the Company's eligible direct commercial earned premiums of the prior calendar year up to a combined annual aggregate limit for the federal government and all insurers of $100 billion. The federal government pays 80% of the losses. The Company's estimated deductible under the program is $2.4 billion for 2026. If an act of terrorism or acts of terrorism result in covered losses exceeding the $100 billion annual industry aggregate limit, Congress would be responsible for determining how additional losses in excess of $100 billion will be paid.
Reinsurance for Asbestos and Environmental ("A&E") Reserve Development - The Company has an ADC reinsurance agreement in place with NICO, a subsidiary of Berkshire Hathaway Inc., accounted for as retroactive reinsurance. The agreement covered substantially all A&E reserve development for accident years prior to 2016 up to an aggregate limit of $1.5
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billion. The Company had previously ceded all available limits under the agreements. As such, no remaining limit was available under the A&E ADC as of December 31, 2025, and no remaining limit was available under the Navigators' ADC as of December 31, 2023.
As of December 31, 2025, the Company had paid A&E ADC claims in excess of the $1.7 billion attachment point. During the three months ended March 31, 2026, the Company collected recoveries from NICO under the A&E ADC and as a result, amortized $36 of the $850 deferred gain within benefits, losses and loss adjustment expenses in the Condensed Consolidated Statements of Operations. Subsequently during the first quarter of 2026, NICO suspended any further payment under the A&E ADC due to a dispute that is the subject of an arbitration proceeding. The timing of any resolution or outcome of the arbitration is not yet known and there may be impacts to the Company's cash flows or operating results as a result of the dispute. As of June 30, 2026 and December 31, 2025, the deferred gain on the A&E ADC was $814 and $850, respectively, and is included in other liabilities on the Condensed Consolidated Balance Sheets.
For more information on the A&E ADC, see Note 1 - Basis of Presentation and Significant Accounting Policies and Note 10 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Consolidated Financial Statements, included in The Hartford's 2025 Form 10-K Annual Report.
Financial Risk
Financial risks include direct and indirect risks to the Company's financial objectives from events that impact financial market conditions and the value of financial assets. Some events may cause correlated movement in multiple risk factors. The primary sources of financial risks are the Company's invested assets.
Consistent with its risk appetite, the Company establishes financial risk limits to control potential loss on a U.S. GAAP, statutory, and economic basis. Exposures are actively monitored and managed, with risks mitigated where appropriate. The Company uses various risk management strategies, including limiting aggregation of risk, portfolio re-balancing and hedging with over-the-counter ("OTC") and exchange-traded derivatives with counterparties meeting the appropriate regulatory and due diligence requirements. Derivatives may be used to achieve the following Company-approved objectives: (1) hedging risk arising from interest rate, equity market, credit spread and issuer default, price or currency exchange rate risk or volatility; (2) managing liquidity; (3) controlling transaction costs; and (4) engaging in income generation covered call transactions and synthetic replication transactions. Derivative activities are monitored and evaluated by the Company’s compliance and risk management teams and reviewed by senior management. The Company identifies different categories of financial risk, including liquidity, credit, interest rate, equity, and foreign currency exchange.
Liquidity Risk
Liquidity risk is the risk to current or prospective earnings or capital arising from the Company's inability or perceived inability to meet its contractual funding obligations as they come due.
Sources of Liquidity Risk Sources of liquidity risk include funding risk, company-specific liquidity risk and market
liquidity risk resulting from differences in the amount and timing of sources and uses of cash as well as company-specific and general market conditions. Stressed market conditions may impact the ability to sell assets or otherwise transact business and may result in a significant loss in value of the investment portfolio.
Impact Inadequate capital resources and liquidity could negatively affect the Company’s overall financial strength and its ability to generate cash flows from its businesses, borrow funds at competitive rates, and raise new capital to meet operating and growth needs.
Management The Company has defined ongoing monitoring and reporting requirements to assess liquidity across the enterprise under both current and stressed market conditions. The Company measures and manages liquidity risk exposures and funding needs within prescribed limits across legal entities, taking into account legal, regulatory and operational limitations to the transferability of liquid assets among legal entities. The Company also monitors internal and external conditions, and identifies material risk changes and emerging risks that may impact operating cash flows or liquid assets. The liquidity requirements of The Hartford Insurance Group, Inc. ("HIG Holding Company") have been and will continue to be met by the HIG Holding Company's fixed maturities, short-term investments and cash, and dividends from its subsidiaries, principally from its insurance operations, as well as the issuance of common stock, debt or other capital securities and borrowings from its credit facilities, as needed. The Company maintains multiple sources of contingent liquidity including a revolving credit facility, an intercompany liquidity agreement that allows for short-term advances of funds among the HIG Holding Company and certain affiliates, and access to collateralized advances from the Federal Home Loan Bank of Boston ("FHLBB") for certain affiliates. The Company's CFO has primary responsibility for liquidity risk.
Credit Risk and Counterparty Risk
Credit risk is the risk to earnings or capital due to uncertainty of an obligor’s or counterparty’s ability or willingness to meet its obligations in accordance with contractually agreed upon terms. Credit risk is comprised of three major factors: the risk of change in credit quality, or credit migration risk; the risk of default; and the risk of a change in value due to changes in credit spreads.
Sources of Credit Risk The majority of the Company’s credit risk is concentrated in its investment holdings and use of derivatives, but it is also present in the Company’s ceded reinsurance activities, bond insurance, and certain aspects of Business Insurance products.
Impact A decline in creditworthiness is typically reflected as an increase in an investment’s credit spread and an associated decline in the investment's fair value, potentially resulting in recording an ACL and an increased probability of a realized loss upon sale. In certain instances, counterparties may default on their obligations and the Company may realize a loss on default. Premiums receivable, including premiums for retrospectively rated plans, reinsurance recoverable and deductible losses recoverable are also subject to credit risk based on the counterparty’s inability to pay.
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Management The objective of the Company’s enterprise credit risk management strategy is to identify, quantify and manage credit risk in aggregate and to limit potential losses in accordance with the Company's credit risk management policy. The Company manages its credit risk by managing aggregations of risk, holding a diversified mix of issuers and counterparties across its investment, reinsurance and insurance portfolios and limiting exposure to any specific reinsurer or counterparty. Potential credit losses can be mitigated through diversification (e.g., geographic regions, asset types, industry sectors), hedging and the use of collateral to reduce net credit exposure.
The Company manages credit risk through the use of various surveillance, analyses and governance processes. The investment and reinsurance areas have formal policies and procedures for counterparty approvals and authorizations, which establish criteria defining minimum levels of creditworthiness and financial stability for eligible counterparties. Potential investments are subject to underwriting reviews and management approval. Mitigation strategies vary across the three sources of credit risk, but may include:
•Investing in a portfolio of high-quality and diverse securities;
•Selling investments subject to heightened credit risk;
•Hedging through use of credit default swaps;
•Clearing derivative transactions through central clearing houses that require daily variation margin;
•Entering into derivative and reinsurance contracts only with strong creditworthy institutions;
•Requiring collateral; and
•Non-renewing policies/contracts or reinsurance treaties.
The Company has developed credit exposure thresholds which are based upon counterparty ratings. Aggregate counterparty credit quality and exposure are monitored on a daily basis utilizing an enterprise-wide credit exposure information system that contains data on issuers, ratings, exposures, and credit limits. Exposures are tracked on a current and potential basis and aggregated by ultimate parent of the counterparty across investments, reinsurance receivables, insurance products with credit risk, and derivatives.
As of June 30, 2026, the Company had no investment exposure to any credit concentration risk of a single issuer or counterparty greater than 10% of the Company’s stockholders' equity, other than the U.S. government and certain U.S. government agencies. For further discussion of concentration of credit risk in the investment portfolio, see the Concentration of Credit Risk section in Note 5 - Investments of Notes to Condensed Consolidated Financial Statements.
Credit Risk of Derivatives
The Company uses various derivative counterparties in executing its derivative transactions. The use of counterparties creates credit risk that the counterparty may not perform in accordance with the terms of the derivative transaction.
Downgrades to the credit ratings of the Company’s insurance operating companies may have adverse implications for its use of derivatives. In some cases, downgrades may give derivative counterparties for OTC derivatives and clearing brokers for OTC-cleared derivatives the right to cancel and settle
outstanding derivative trades or require additional collateral to be posted. In addition, downgrades may result in counterparties and clearing brokers becoming unwilling to engage in or clear additional derivatives or may require additional collateralization before entering into any new trades.
The Company also has derivative counterparty exposure policies which limit the Company’s exposure to credit risk. Credit exposures are generally quantified based on the prior business day’s net fair value, including income accruals, of all derivative positions transacted with a single counterparty for each separate legal entity. The notional amount of derivative contracts represents the basis upon which pay or receive amounts are calculated and are not necessarily reflective of credit risk. The Company enters into collateral arrangements in connection with its derivatives positions and collateral is pledged to or held by, or on behalf of, the Company to the extent the exposure is greater than zero, subject to minimum transfer thresholds, if applicable. In accordance with industry standards and the contractual requirements, collateral is typically settled on the same business day. For further discussion, see the Derivative Commitments section of Note 13 - Commitments and Contingencies of Notes to Condensed Consolidated Financial Statements.
Use of Credit Derivatives
The Company may also use credit default swaps to manage credit exposure or to assume credit risk to enhance yield.
Credit Risk Reduced Through Credit Derivatives
The Company may use credit derivatives to purchase credit protection with respect to a single entity or referenced index. The Company may purchase credit protection through credit default swaps to economically hedge and manage credit risk of certain fixed maturity investments across multiple sectors of the investment portfolio.
Credit Risk Assumed Through Credit Derivatives
The Company may also enter into credit default swaps that assume credit risk as part of replication transactions. Replication transactions may be used as an economical means to synthetically replicate the characteristics and performance of assets that are permissible investments under the Company’s investment policies. These swaps primarily reference investment grade single corporate issuers and indexes.
For further information on credit derivatives, see Note 6 - Derivatives of Notes to Condensed Consolidated Financial Statements.
Credit Risk of Business Operations
A portion of the Company's Business Insurance business is written with large deductibles or under retrospectively-rated plans. Under some commercial insurance contracts with a large deductible, the Company is obligated to pay the claimant the full amount of the claim and the Company is subsequently reimbursed by the policyholder for the deductible amount. As such, the Company is subject to credit risk until reimbursement is made. Retrospectively-rated policies are utilized primarily for workers' compensation coverage, whereby the ultimate premium is adjusted based on actual losses incurred. Although the premium adjustment feature of a retrospectively-rated policy substantially reduces insurance risk for the Company, it presents credit risk to the Company. The Company’s results of
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operations could be adversely affected if a significant portion of such policyholders failed to reimburse the Company for the deductible amount or the amount of additional premium owed under retrospectively-rated policies. The Company manages these credit risks through credit analysis, collateral requirements, and oversight.
Interest Rate Risk
Interest rate risk is the risk of financial loss due to adverse changes in the value of assets and liabilities arising from movements in interest rates. Interest rate risk encompasses exposures with respect to changes in the level of interest rates, the shape of the term structure of rates and the volatility of interest rates. Interest rate risk does not include exposure to changes in credit spreads.
Sources of Interest Rate Risk The Company has exposure to interest rate risk arising from investments in fixed maturities and commercial mortgage loans, issuances by the Company of debt securities, preferred stock and similar securities, discount rate assumptions associated with the Company’s claim reserves and pension and other postretirement benefit obligations, and assets that support the Company's pension plans.
Impact Changes in interest rates from current levels can have both favorable and unfavorable effects for the Company.
Management The Company primarily manages its exposure to interest rate risk by constructing investment portfolios that seek to protect the Company from the economic impact associated with changes in interest rates by setting portfolio duration targets that are aligned with the duration of the liabilities that they support. The Company analyzes interest rate risk using various models including parametric models and cash flow simulation under various market scenarios of the liabilities and their supporting investment portfolios. Key metrics that the Company uses to quantify its exposure to interest rate risk inherent in its invested assets and the associated liabilities include duration, convexity and key rate duration.
The Company may also use interest rate swaps and, to a lesser extent, futures to mitigate interest rate risk associated with its investment portfolio or liabilities and to manage portfolio duration.
Equity Risk
Equity risk is the risk of financial loss due to changes in the value of global equities or equity indices.
Sources of Equity Risk The Company has exposure to equity risk from invested assets and assets that support the Company’s pension plans.
Impact The investment portfolio is exposed to losses from market declines affecting equity securities and derivatives, which could negatively impact the Company's reported
earnings. In addition, investments in limited partnerships and other alternative investments generally have a level of correlation to domestic equity market levels and can expose the Company to losses in earnings if valuations decline; however, earnings impacts are recognized on a lag as results from private equity investments and other funds are generally reported on a three-month delay. For assets supporting pension plans, the Company may be required to make additional plan contributions if equity investments in the plan portfolios decline in value.
Management The Company uses various approaches in managing its equity exposure, including limits on the proportion of assets invested in equities, diversification of the equity portfolio, and, at times, hedging of changes in equity indices. For assets supporting pension plans, the asset allocation mix is reviewed on a periodic basis. In order to minimize risk, the pension plans maintain a listing of permissible and prohibited investments and impose concentration limits and investment quality requirements on permissible investment options.
Foreign Currency Exchange Risk
Foreign currency exchange risk is the risk of financial loss due to changes in the relative value between currencies.
Sources of Currency Risk The Company has foreign currency exchange risk in non-U.S. dollar denominated cash, fixed maturities, and derivative instruments. In addition, the Company has non-U.S. subsidiaries, some with functional currencies other than U.S. dollar, and which transact business in multiple currencies resulting in assets and liabilities denominated in foreign currencies.
Impact Changes in relative values between currencies can create variability in cash flows and realized or unrealized gains and losses on changes in the fair value of assets and liabilities.
Management The Company manages its foreign currency exchange risk primarily through asset-liability matching and through the use of derivative instruments. However, legal entity capital is invested in local currencies in order to satisfy regulatory requirements and to support local insurance operations. The foreign currency exposure of non-U.S. dollar denominated investments will most commonly be reduced through the sale of the assets or through hedges using foreign currency swaps and forwards.
Investment Portfolio Risk
The credit ratings referenced throughout this section are based on availability and are generally the midpoint of the available ratings among Moody’s, S&P, and Fitch. If no rating is available from a rating agency, then an internally developed rating is used. Accrued investment income related to fixed maturities is not included in the amortized cost or fair value of the fixed maturities. For further information refer to Note 5 - Investments of Notes to Condensed Consolidated Financial Statements.
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Fixed Maturities, AFS by Type
June 30, 2026 December 31, 2025
Amortized Cost ACL Gross Unrealized Gains Gross Unrealized Losses Fair Value Percent of Total Fair Value Amortized Cost ACL Gross Unrealized Gains Gross Unrealized Losses Fair Value Percent of Total Fair Value
ABS
Consumer loans $ 3,522 $ — $ 16 $ (10) $ 3,528 7.7 % $ 3,375 $ — $ 41 $ (2) $ 3,414 7.4 %
Other 1,272 — 3 (20) 1,255 2.7 % 1,253 — 10 (14) 1,249 2.7 %
CLOs 3,360 (2) 5 (3) 3,360 7.3 % 3,310 (2) 9 (1) 3,316 7.2 %
CMBS
Agency [1] 1,069 (14) 18 (88) 985 2.1 % 1,192 (14) 19 (87) 1,110 2.4 %
Bonds 827 — — (51) 776 1.7 % 1,206 — 1 (61) 1,146 2.5 %
Interest only 60 — 3 (2) 61 0.1 % 70 — 4 (2) 72 0.2 %
Corporate
Basic industry 1,236 — 9 (22) 1,223 2.7 % 1,232 — 18 (19) 1,231 2.7 %
Capital goods 1,784 — 28 (37) 1,775 3.9 % 1,757 — 44 (30) 1,771 3.8 %
Consumer cyclical 1,681 — 18 (37) 1,662 3.6 % 1,667 — 36 (37) 1,666 3.6 %
Consumer non-cyclical 3,291 — 35 (114) 3,212 7.0 % 2,860 — 54 (84) 2,830 6.2 %
Energy 1,515 — 20 (40) 1,495 3.3 % 1,452 — 27 (38) 1,441 3.1 %
Financial services 7,179 — 35 (154) 7,060 15.4 % 6,952 — 87 (125) 6,914 15.0 %
Tech./comm. 3,799 — 28 (156) 3,671 8.0 % 3,400 — 55 (114) 3,341 7.3 %
Transportation 852 — 5 (36) 821 1.8 % 862 — 12 (34) 840 1.8 %
Utilities 2,794 — 20 (130) 2,684 5.9 % 2,793 — 39 (116) 2,716 5.9 %
Real estate investment trusts ("REITs") 270 — 2 (7) 265 0.6 % 330 — 3 (7) 326 0.7 %
Foreign govt./govt. agencies 453 — 6 (5) 454 1.0 % 440 — 9 (2) 447 1.0 %
Municipal bonds
Taxable 1,643 — 13 (90) 1,566 3.4 % 1,685 — 19 (92) 1,612 3.5 %
Tax-exempt 2,610 — 62 (133) 2,539 5.6 % 3,146 — 70 (176) 3,040 6.6 %
Residential Mortgage-Backed Securities ("RMBS")
Agency 3,220 — 16 (153) 3,083 6.7 % 3,544 — 33 (139) 3,438 7.5 %
Non-agency 2,808 — 6 (110) 2,704 5.9 % 2,828 — 17 (105) 2,740 5.9 %
U.S. Treasuries 1,791 — 1 (147) 1,645 3.6 % 1,517 — 3 (139) 1,381 3.0 %
Total fixed maturities, AFS $ 47,036 $ (16) $ 349 $ (1,545) $ 45,824 100.0 % $ 46,871 $ (16) $ 610 $ (1,424) $ 46,041 100.0 %
FVO securities $ 125 $ 168
[1]Includes securities with pools of loans issued by the Small Business Administration which are backed by the full faith and credit of the U.S. government.
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Fixed Maturities, AFS by Credit Quality
June 30, 2026 December 31, 2025
Amortized Cost Fair Value Percent of Total Fair Value Amortized Cost Fair Value Percent of Total Fair Value
United States Government/Government agencies $ 6,080 $ 5,713 12.5 % $ 6,253 $ 5,929 12.9 %
AAA 7,370 7,264 15.8 % 7,819 7,751 16.8 %
AA 7,934 7,772 17.0 % 7,484 7,340 15.9 %
A 12,614 12,305 26.9 % 12,653 12,470 27.1 %
BBB 10,748 10,501 22.9 % 10,377 10,250 22.3 %
BB & below 2,290 2,269 4.9 % 2,285 2,301 5.0 %
Total fixed maturities, AFS [1] $ 47,036 $ 45,824 100.0 % $ 46,871 $ 46,041 100.0 %
[1]Excludes FVO securities. For further discussion on FVO securities, see Note 4 - Fair Value Measurements of Notes to Condensed Consolidated Financial Statements.
The fair value of fixed maturities, AFS decreased as compared to December 31, 2025, primarily due to lower valuations as a result of higher interest rates.
Commercial & Residential Real Estate
The following tables present the Company's exposure to CMBS and RMBS by credit quality included in the preceding Fixed Maturities, AFS by Type table.
Exposure to CMBS & RMBS Bonds by Credit Quality as of June 30, 2026
AAA AA A BBB BB and Below Total
Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value
CMBS
Agency [1] $ 9 $ 9 $ 1,060 $ 976 $ — $ — $ — $ — $ — $ — $ 1,069 $ 985
Bonds 180 172 302 287 137 127 115 107 93 83 827 776
Interest Only 32 32 19 20 5 5 4 4 — — 60 61
Total CMBS 221 213 1,381 1,283 142 132 119 111 93 83 1,956 1,822
RMBS
Agency — — 3,220 3,083 — — — — — — 3,220 3,083
Non-Agency 1,820 1,747 731 707 215 209 40 39 2 2 2,808 2,704
Total RMBS 1,820 1,747 3,951 3,790 215 209 40 39 2 2 6,028 5,787
Total CMBS & RMBS $ 2,041 $ 1,960 $ 5,332 $ 5,073 $ 357 $ 341 $ 159 $ 150 $ 95 $ 85 $ 7,984 $ 7,609
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Exposure to CMBS & RMBS Bonds by Credit Quality as of December 31, 2025
AAA AA A BBB BB and Below Total
Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value
CMBS
Agency [1] $ 11 $ 10 $ 1,181 $ 1,100 $ — $ — $ — $ — $ — $ — $ 1,192 $ 1,110
Bonds 418 408 365 349 171 157 137 132 115 100 1,206 1,146
Interest Only 37 38 22 23 6 6 5 4 — 1 70 72
Total CMBS 466 456 1,568 1,472 177 163 142 136 115 101 2,468 2,328
RMBS
Agency — — 3,544 3,438 — — — — — — 3,544 3,438
Non-Agency 1,741 1,682 770 746 257 253 53 52 7 7 2,828 2,740
Total RMBS 1,741 1,682 4,314 4,184 257 253 53 52 7 7 6,372 6,178
Total CMBS & RMBS $ 2,207 $ 2,138 $ 5,882 $ 5,656 $ 434 $ 416 $ 195 $ 188 $ 122 $ 108 $ 8,840 $ 8,506
[1]Includes securities with pools of loans issued by the Small Business Administration which are backed by the full faith and credit of the U.S. government.
The Company also has exposure to commercial mortgage loans. These loans are collateralized by real estate properties that are diversified both geographically throughout the United States and by property type. These commercial mortgage loans are originated by the Company as high quality whole loans, and the Company may sell participation interests in one or more loans to third parties. A loan participation interest represents a pro-rata share in interest and principal payments generated by the participated loan, and the relationship between the Company as loan originator, lead participant and servicer and the third party as a participant are governed by a participation agreement.
As of June 30, 2026, mortgage loans had an amortized cost of $7.3 billion and carrying value of $7.3 billion, with an ACL of $49. As of December 31, 2025, mortgage loans had an amortized cost of $6.9 billion and carrying value of $6.8 billion, with an ACL of $49.
The Company funded $783 of commercial mortgage loans, primarily industrial properties, with a weighted average loan-to-value (“LTV”) ratio of 58% and a weighted average yield of 5.6% during the six months ended June 30, 2026. The Company continues to originate commercial mortgage loans on institutional-quality properties with strong LTV ratios. There were no mortgage loans held for sale as of June 30, 2026, or December 31, 2025.
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Municipal Bonds
Available-For-Sale Investments in Municipal Bonds
June 30, 2026 December 31, 2025
Amortized Cost Fair Value Weighted Average Credit Quality Amortized Cost Fair Value Weighted Average Credit Quality
General Obligation $ 749 $ 745 AA $ 798 $ 800 AA
Pre-Refunded [1] 26 25 AA+ 46 46 AA+
Revenue
Transportation 892 869 A+ 985 951 A+
Health Care 905 854 A+ 939 880 A+
Leasing [2] 451 427 AA 543 517 AA
Education 294 285 AA 370 358 AA
Water & Sewer 242 227 AA 249 231 AA
Sales Tax 160 163 AA 165 165 AA
Power 113 108 AA- 137 130 A+
Housing 96 94 AA+ 163 159 AA
Other 325 308 A+ 436 415 A+
Total Revenue 3,478 3,335 AA- 3,987 3,806 AA-
Total Municipal $ 4,253 $ 4,105 AA- $ 4,831 $ 4,652 AA-
[1]Pre-refunded bonds are bonds for which an irrevocable trust containing sufficient U.S. treasury, agency, or other securities has been established to fund the remaining payments of principal and interest.
[2]Leasing revenue bonds are generally the obligations of a financing authority established by the municipality that leases facilities back to a municipality. The notes are typically secured by lease payments made by the municipality that is leasing the facilities financed by the issue. Lease payments may be subject to annual appropriation by the municipality, or the municipality may be obligated to appropriate general tax revenues to make lease payments.
As of June 30, 2026, the largest issuer concentrations were the Metropolitan Transportation Authority, CommonSpirit Health, and the State of California, which each comprised less than 4% of the municipal bond portfolio and were primarily comprised of general obligation and revenue bonds. As of December 31, 2025, the largest issuer concentrations were the Metropolitan Transportation Authority, CommonSpirit Health, and the State of California, which each comprised less than 4% of the municipal bond portfolio and were primarily comprised of general obligation and revenue bonds. In total, municipal bonds make up 6% of the fair value of the Company's investment portfolio.
Limited Partnerships and Other Alternative Investments
The following table presents the Company’s investments in limited partnerships and other alternative investments which include real estate joint ventures, real estate funds, private equity funds, other funds, and other alternative investments. Private equity funds primarily consist of investments in funds whose assets typically consist of a diversified pool of investments in small to mid-sized non-public businesses with high growth potential and strong owner sponsorship, as well as limited exposure to public markets. Other funds consist of investments in infrastructure and energy transition funds and, to a lesser extent, funds across a diverse mix of strategies.
Income or losses on investments in limited partnerships and other alternative investments are recognized on a lag as results from private equity investments and other funds are generally reported on a three-month delay.
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Limited Partnerships and Other Alternative Investments - Net Investment Income
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Amount Yield [1] Amount Yield [1] Amount Yield [1] Amount Yield [1]
Real estate joint ventures and funds $ 64 12.6 % $ (14) (3.1 %) $ 42 4.1 % $ (22) (2.4 %)
Private equity funds (15) (2.5 %) (1) (0.1 %) 20 1.7 % 39 3.9 %
Other funds 58 23.0 % 19 11.7 % 117 25.1 % 26 8.0 %
Other alternative investments [2] 7 5.4 % 9 6.5 % 10 3.6 % 9 3.4 %
Total $ 114 7.6 % $ 13 1.0 % $ 189 6.4 % $ 52 2.1 %
[1]Yields calculated using annualized net investment income divided by the monthly average invested assets.
[2]Consists of an insurer-owned life insurance policy, which is primarily invested in private equity funds and fixed income.
Investments in Limited Partnerships and Other Alternative Investments
June 30, 2026 December 31, 2025
Amount Percent Amount Percent
Real estate joint ventures and funds $ 2,064 33.7 % $ 1,986 34.2 %
Private equity funds 2,436 39.7 % 2,327 40.1 %
Other funds 1,044 17.0 % 910 15.7 %
Other alternative investments [1] 591 9.6 % 581 10.0 %
Total $ 6,135 100.0 % $ 5,804 100.0 %
[1]Consists of an insurer-owned life insurance policy which is primarily invested in private equity funds and fixed income.
Fixed Maturities, AFS — Unrealized Loss Aging
The total gross unrealized losses were $1.5 billion as of June 30, 2026, and have increased $121 since December 31, 2025, primarily due to higher interest rates. As of June 30, 2026, $1.2 billion of the gross unrealized losses were associated with fixed maturities, AFS depressed less than 20% of amortized cost. The remaining $0.3 billion of gross unrealized losses were associated with fixed maturities, AFS depressed greater than 20%. The fixed maturities, AFS depressed more than 20% primarily related to corporate fixed maturities, municipal bonds, and U.S. Treasuries, that are mainly depressed because current interest rates are higher than at the respective purchase dates.
As part of the Company’s ongoing investment monitoring process, the Company has reviewed its fixed maturities, AFS in an unrealized loss position and concluded that these fixed maturities are temporarily depressed and are expected to recover in value as the investments approach maturity or as market spreads tighten. For these fixed maturities in an unrealized loss position where an ACL has not been recorded, the Company’s best estimate of expected future cash flows are sufficient to recover the amortized cost basis of the investment. Furthermore, the Company neither has an intention to sell nor does it expect to be required to sell these investments. For further information regarding the Company’s ACL analysis, see the Credit Losses on Fixed Maturities, AFS and Intent-to-Sell Impairments section below.
Unrealized Loss Aging for Fixed Maturities, AFS Securities
June 30, 2026 December 31, 2025
Consecutive Months Items Amortized Cost ACL Unrealized Loss Fair Value Items Amortized Cost ACL Unrealized Loss Fair Value
Three months or less 520 $ 4,477 $ — $ (19) $ 4,458 253 $ 3,629 $ — $ (31) $ 3,598
Greater than three to six months 686 8,024 (2) (122) 7,900 56 441 — (4) 437
Greater than six to nine months 67 787 — (31) 756 16 311 — (12) 299
Greater than nine to eleven months 15 55 — (2) 53 55 364 — (12) 352
Twelve months or more 1,978 13,797 (12) (1,371) 12,414 2,279 16,172 (14) (1,365) 14,793
Total 3,266 $ 27,140 $ (14) $ (1,545) $ 25,581 2,659 $ 20,917 $ (14) $ (1,424) $ 19,479
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Unrealized Loss Aging for Fixed Maturities, AFS Continuously Depressed Over 20%
June 30, 2026 December 31, 2025
Consecutive Months Items Amortized Cost ACL Unrealized Loss Fair Value Items Amortized Cost ACL Unrealized Loss Fair Value
Three months or less 8 $ 34 $ — $ (7) $ 27 29 $ 159 $ — $ (34) $ 125
Greater than three to six months 40 269 — (60) 209 — — — — —
Greater than six to nine months 3 12 — (3) 9 2 9 — (2) 7
Greater than nine to eleven months — — — — — 10 70 — (16) 54
Twelve months or more 98 899 (1) (270) 628 110 997 (1) (290) 706
Total 149 $ 1,214 $ (1) $ (340) $ 873 151 $ 1,235 $ (1) $ (342) $ 892
Credit Losses on Fixed Maturities, AFS and Intent-to-Sell Impairments
Three and six months ended June 30, 2026
For the three and six months ended June 30, 2026, the Company recorded no credit losses. For both periods, there were no unrealized losses on securities with an ACL recognized in other comprehensive income ("OCI"). For further information, refer to Note 5 - Investments of Notes to Condensed Consolidated Financial Statements.
There were no intent-to-sell impairments.
The Company incorporates its best estimate of future performance using internal assumptions and judgments that are informed by economic and industry specific trends, as well as our expectations with respect to security specific developments.
Future intent-to-sell impairments or credit losses may develop as the result of changes in our intent to sell specific securities that are in an unrealized loss position or if modeling assumptions, such as macroeconomic factors or security specific developments, change unfavorably from our current modeling assumptions, resulting in lower cash flow expectations.
Three and six months ended June 30, 2025
For the three months ended June 30, 2025, the Company recorded no credit losses. For the six months ended June 30, 2025, the Company recorded a net credit loss reversal of $2, primarily attributable to a decrease in ACL of $3 on one below investment grade corporate issuer, partially offset by a credit loss of $1 related to a CMBS. For the three and six months ended June 30, 2025 there were no unrealized losses on securities with an ACL recognized in OCI.
There were no intent-to-sell impairments.
ACL on Mortgage Loans
Three and six months ended June 30, 2026 and June 30, 2025
The Company reviews mortgage loans on a quarterly basis to estimate the ACL with changes in the ACL recorded in net realized gains and losses. Apart from an ACL recorded on individual mortgage loans where the borrower is experiencing financial difficulties, the Company records an ACL on the pool of mortgage loans based on lifetime expected credit losses. For further information, refer to Note 5 - Investments of Notes to Condensed Consolidated Financial Statements.
There were no credit loss adjustments on mortgage loans.
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Capital Resources and Liquidity
The following section discusses the overall financial strength of The Hartford and its insurance operations including their ability to generate cash flows from each of their business segments, borrow funds at competitive rates and raise new capital to meet operating and growth needs.
Summary of Capital Resources and Liquidity
Capital available to the HIG Holding Company as of June 30, 2026:
•Approximately $1.9 billion in fixed maturities, short-term investments, investment sales receivable and cash at the HIG Holding Company;
•A senior unsecured revolving credit facility that provides for borrowing capacity up to $750 of unsecured credit through September 24, 2030. As of June 30, 2026, there were no borrowings outstanding; and
•An intercompany liquidity agreement that allows for short-term advances of funds among the HIG Holding Company and certain affiliates of up to $2.0 billion for liquidity and other general corporate purposes. As of June 30, 2026, $1.86 billion was available, $145 was outstanding between certain affiliates and there were no amounts outstanding at the HIG Holding company.
Dividends and other sources of capital for the six months ended June 30, 2026:
The future payment of dividends from our subsidiaries is dependent on several factors including the business results, capital position and liquidity of our subsidiaries.
•P&C - HIG Holding Company received $1.1 billion of net dividends from the Company's property and casualty insurance subsidiaries through June 30, 2026;
•Employee Benefits - HIG Holding Company received $439 in dividends from Hartford Life and Accident Insurance Company ("HLA") through June 30, 2026;
•Hartford Funds - HIG Holding Company received $85 in dividends from Hartford Funds through June 30, 2026.
Expected liquidity requirements for the next twelve months as of June 30, 2026:
•$195 of interest on debt. See Note 13 - Debt of Notes to Consolidated Financial Statements in The Hartford's 2025 Form 10-K Annual Report.
•$21 dividends on preferred stock, subject to the discretion of the Board of Directors; and
•$655 of common stockholders' dividends, subject to the discretion of the Board of Directors and before share repurchases.
Expected liquidity requirements for beyond the next twelve months as of June 30, 2026:
•Interest on and repayments of debt. See Note 13 - Debt of Notes to Consolidated Financial Statements in The Hartford's 2025 Form 10-K Annual Report; and
•Preferred stock and common stock dividends, subject to the discretion of the Board of Directors.
Equity repurchase program:
During the six months ended June 30, 2026, the Company repurchased 6.7 million common shares for $900 under the $3.3 billion share repurchase program authorized by the Board of Directors, effective through December 31, 2026. As of June 30, 2026, the Company has $648 remaining for equity repurchases under the current share repurchase program. During the period July 1, 2026 through July 22, 2026, the Company repurchased 0.8 million common shares for $109.
In addition to the authorization covering the period from August 1, 2024 to December 31, 2026, the Board of Directors approved a share repurchase authorization for up to $4.2 billion effective from August 1, 2026 to December 31, 2028. While the Company has the flexibility to use a portion of the new authorization in 2026, it expects to use the vast majority of the new authorization in 2027 and 2028. The timing of any repurchases of shares is dependent on several factors, including the market price of the Company's securities, the Company's capital position, consideration of the effect of any repurchases on the Company's financial strength or credit ratings, the Company's blackout periods, and other considerations.
Liquidity Requirements and Sources of Capital
The HIG Holding Company
The liquidity requirements of the HIG Holding Company will primarily be met by HIG Holding Company's fixed maturities; short-term investments and cash; and dividends from its subsidiaries, principally its insurance operations. The Company maintains sufficient liquidity and has a variety of contingent liquidity resources to manage liquidity across a range of economic scenarios.
The HIG Holding Company expects to continue to receive dividends from its operating subsidiaries in the future and manages capital in its operating subsidiaries to be sufficient under significant economic stress scenarios. Dividends from subsidiaries and other sources of funds at the holding company may be used to repurchase shares under the authorized share repurchase program at the discretion of management.
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Under significant economic stress scenarios, the Company has the ability to meet short-term cash requirements, if needed, by borrowing under its revolving credit facility or by having its insurance subsidiaries take collateralized advances under a facility with the FHLBB. The Company could also choose to have its insurance subsidiaries sell certain highly liquid, high quality fixed maturities or the Company could issue debt in the public markets under its shelf registration.
Dividends
The Hartford's Board of Directors declared the following quarterly dividends since April 1, 2026:
Common Stock Dividends
Declared Record Payable Amount per share
May 20, 2026 June 1, 2026 July 2, 2026 $ 0.600
July 15, 2026 September 1, 2026 October 2, 2026 $ 0.600
Preferred Stock Dividends
Declared Record Payable Amount per share
May 20, 2026 August 3, 2026 August 17, 2026 $ 375.00
July 15, 2026 November 2, 2026 November 16, 2026 $ 375.00
There are no current restrictions on the HIG Holding Company's ability to pay dividends to its stockholders.
For a discussion of restrictions on dividends to the HIG Holding Company from its insurance subsidiaries, see the following "Dividends From Subsidiaries" discussion. For a discussion of potential restrictions on the HIG Holding Company's ability to pay dividends, see the risk factor "Our ability to declare and pay dividends is subject to limitations" in Item 1A of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Dividends From Subsidiaries
Dividends to HIG Holding Company from its insurance subsidiaries are restricted by insurance regulation. For a discussion of restrictions on dividends to HIG Holding Company from its insurance subsidiaries see Part II, Item 7, MD&A – Capital Resources and Liquidity - Dividends from Subsidiaries in The Hartford’s 2025 Form 10-K Annual Report.
Through the first six months of 2026, HIG Holding Company received $1.6 billion of net dividends from its subsidiaries, including $439 from HLA, $85 from Hartford Funds and $1.1 billion from its P&C subsidiaries, excluding $25 of P&C dividends that were subsequently contributed to P&C subsidiaries and $82 of P&C dividends related to interest payments on an intercompany note owed by Hartford Holdings, Inc. ("HHI") to Hartford Fire Insurance Company.
Other Sources of Capital for the HIG Holding Company
The Hartford endeavors to maintain a capital structure that provides financial and operational flexibility to its insurance subsidiaries, ratings that support its competitive position in the financial services marketplace (see the "Ratings" section below for further discussion), and stockholder returns. As a result, the Company may from time to time raise capital from the issuance of debt, common equity, preferred stock, equity-related debt or other capital securities and is continuously evaluating strategic opportunities. The issuance of debt, common equity, equity-related debt or other capital securities could result in the dilution of stockholder interests or reduced net income to common stockholders due to additional interest expense or preferred stock dividends.
Shelf Registrations
The Hartford filed an automatic shelf registration statement with the Securities and Exchange Commission on September 23, 2024 that permits it to offer and sell debt and equity securities during the three-year life of the registration statement.
For further information regarding shelf registrations, see Note 13 - Debt of Notes to Consolidated Financial Statements included in the Company's 2025 Form 10-K Annual Report.
Revolving Credit Facility
The Hartford has a $750 senior unsecured revolving credit facility, including $100 available to support letters of credit (the "Credit Facility"). On September 24, 2025, The Hartford amended and restated the Credit Facility, which, among other changes, extends the term of the facility through September 24, 2030. As of June 30, 2026, no borrowings were outstanding and no letters of credit were issued under the Credit Facility and The Hartford was in compliance with all financial covenants. For further information regarding the Credit Facility, see Note 13 - Debt of Notes to Consolidated Financial Statements included in the Company’s 2025 Form 10-K Annual Report.
Intercompany Liquidity Agreements
The Company has $2.0 billion available under an intercompany liquidity agreement that allows for short-term advances of funds among the HIG Holding Company and certain affiliates of up to $2.0 billion for liquidity and other general corporate purposes. The Connecticut Insurance Department ("CID") granted approval for certain affiliated insurance companies that are parties to the agreement to treat receivables from a parent, including the HIG Holding Company, as admitted assets for statutory accounting purposes.
As of June 30, 2026, $1.86 billion was available, $145 was outstanding between certain affiliates, and there were no amounts outstanding at the HIG Holding Company.
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Collateralized Advances with Federal Home Loan Bank of Boston
The Company’s subsidiaries, Hartford Fire Insurance Company (“Hartford Fire”) and HLA, are members of the FHLBB. Membership allows these subsidiaries access to collateralized advances, which may be short- or long-term with fixed or variable rates. Advances may be used to support general corporate purposes, which would be presented as short- or long-term debt, or to earn incremental investment income, which would be presented in other liabilities consistent with other collateralized financing transactions. The Company’s pledge capacity is subject to FHLBB’s collateral eligibility requirements, which may be amended at their discretion. Based on these requirements, the Company estimates that Hartford Fire can pledge up to $2.5 billion and HLA can pledge up to $2.1 billion to secure FHLBB advances. As of June 30, 2026, there were no advances outstanding.
For further information regarding collateralized advances with FHLBB, see Note 13 - Debt of Notes to Consolidated Financial Statements included in the Company's 2025 Form 10-K Annual Report.
Lloyd's Letter of Credit Facility
The Hartford has a committed credit facility agreement with a syndicate of lenders (the "Lloyd's Facility"). On October 21, 2024, The Hartford amended and restated its Lloyd’s Facility agreement. The amended and restated Lloyd's Facility has two tranches with one tranche extending a $74 commitment and the other tranche extending a £74 million ($98 as of June 30, 2026) commitment. As of June 30, 2026, letters of credit with an aggregate face amount of $74 and £74 million, or $98, were outstanding under the Lloyd's Facility.
Among other covenants, the Lloyd's Facility contains financial covenants regarding The Hartford's consolidated net worth and financial leverage. As of June 30, 2026, The Hartford was in compliance with all financial covenants of the facility.
For further information regarding the Lloyd's Facility, see Note 13 - Debt of Notes to Consolidated Financial Statements included in the Company’s 2025 Form 10-K Annual Report.
Sale of Hartford Funds
As a result of the June 3, 2026, announced sale of Hartford Funds and expected closing in first quarter of 2027, the Company expects a change in the nature and timing of its cash flows. Prior to closing, the Company expects to receive dividends totaling $85 for the remainder of the year from Hartford Funds and will receive an additional pre-closing dividend of approximately $170, subject to market and operating performance through closing. At closing, the Company expects to receive $300 of cash proceeds. Following the closing, the Company will receive contingent consideration in the form of quarterly payments. For further discussion of this transaction, see Note 17 - Discontinued Operations of Notes to Condensed Consolidated Financial Statements.
Pension Plans and Other Postretirement Benefits
The Company does not have a 2026 required minimum funding contribution for the U.S. qualified defined benefit pension plan and the funding requirements for all pension plans are expected to be immaterial. The Company has not determined whether, and to what extent, contributions may be made to the U.S. qualified defined benefit pension plan in 2026. The Company will monitor the funded status of the U.S. qualified defined benefit pension plan during 2026 to make this determination. For further discussion of pension and other postretirement benefit obligations, see Note 16 - Employee Benefit Plans of Notes to Condensed Consolidated Financial Statements.
Derivative Commitments
Certain of the Company’s derivative agreements contain provisions that are tied to the financial strength ratings, as set by nationally recognized statistical rating organizations, of the individual legal entity that entered into the derivative agreement. If the legal entity’s financial strength were to fall below certain ratings, the counterparties to the derivative agreements could terminate agreements and demand immediate settlement of the outstanding net derivative positions transacted under each agreement. For further information, refer to Note 13 - Commitments and Contingencies of Notes to Condensed Consolidated Financial Statements.
As of June 30, 2026, no derivative positions would be subject to immediate termination in the event of a downgrade of one level below the current financial strength ratings. This could change as a result of changes in our hedging activities or to the extent changes in contractual terms are negotiated.
Insurance Operations
While subject to variability period to period, underwriting and investment cash flows continue to provide sufficient liquidity to meet anticipated demands.
The principal sources of operating funds are premiums, fees earned from insurance and administrative service agreements and investment income, while investing cash flows primarily originate from maturities and sales of invested assets.
The Company’s insurance operations consist of property and casualty insurance products (collectively referred to as “Property & Casualty Operations”) and Employee Benefits products.
The Company's insurance operations hold fixed maturity securities, including a significant short-term investment position (securities with maturities of one year or less at the time of purchase), to meet liquidity needs. Liquidity requirements that are unable to be funded by the Company's insurance operations' short-term investments would be satisfied with current operating funds, including premiums or investing cash flows, which includes proceeds received through the sale of invested assets. A sale of invested assets could result in significant realized losses.
The following tables represent the fixed maturity holdings, including the aforementioned cash and short-term investments
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available to meet liquidity needs, for each of the Company’s insurance operations.
Property & Casualty Operations
As of June 30, 2026
Fixed maturities $ 37,973
Short-term investments 1,614
Cash 106
Less: Derivative collateral 50
Total $ 39,643
Property & Casualty operations invested assets also include $205 in equity securities, $5.7 billion in mortgage loans and $4.8 billion in limited partnerships and other alternative investments.
Employee Benefits Operations
As of June 30, 2026
Fixed maturities $ 7,779
Short-term investments 360
Cash 13
Less: Derivative collateral 14
Total $ 8,138
Employee Benefits operations invested assets also include $49 in equity securities, $1.6 billion in mortgage loans and $1.2 billion in limited partnerships and other alternative investments.
The primary uses of funds are to pay claims, claim adjustment expenses, commissions and other underwriting and insurance operating costs, to pay taxes, to purchase new investments and to make dividend payments to the HIG Holding Company.
Property & Casualty reserves for unpaid losses and loss adjustment expenses as of June 30, 2026 were $39.0 billion and net of reinsurance and other recoverables were $32.5 billion. Reserves for Property & Casualty unpaid losses and loss adjustment expenses include case reserves and incurred but not reported ("IBNR") reserves. The ultimate amount to be paid to settle both case and IBNR reserves is an estimate, subject to significant uncertainty. The actual amount to be paid is not finally determined until the Company reaches a settlement with the claimant. Final claim settlements may vary significantly from the present estimates, particularly since many claims will not be settled until well into the future. For a discussion of The Hartford’s judgment in estimating reserves for Property & Casualty see Part II, Item 7, MD&A - Critical Accounting Estimates, Property & Casualty Insurance Product Reserves, Net of Reinsurance, in the Company's 2025 Form 10-K Annual Report, and for historical payments by reserve line net of reinsurance, see Note 10 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Consolidated Financial Statements included in the Company's 2025 Form 10-K Annual Report. The timing of future payments for the next twelve months and for beyond twelve months could vary materially from historical payment patterns due to, among other things, changes in claim reporting and payment patterns and large unanticipated settlements. In particular, there is significant uncertainty over the claim payment patterns of asbestos and environmental claims.
Employee Benefits reserves as of June 30, 2026 were $8.9 billion and net of reinsurance were $8.6 billion. Group life
and disability obligations are estimated using assumptions based on the Company’s historical experience, modified for recent observed trends. For a discussion of The Hartford’s judgment in estimating LTD reserves for Employee Benefits see Part II, Item 7, MD&A - Critical Accounting Estimates, Employee Benefit LTD Reserves, Net of Reinsurance, in the Company’s 2025 Form 10-K Annual Report. For additional information about future policy benefits and other policyholder funds and benefits payable, see Note 10 - Reserve for Future Policy Benefits and Note 11 - Other Policyholder Funds and Benefits Payable of Notes to Condensed Consolidated Financial Statements. For historical payments by reserve line, net of reinsurance, see Note 10 - Reserve for Unpaid Losses and Loss Adjustment Expenses of Notes to Consolidated Financial Statements included in the Company's 2025 Form 10-K Annual Report. Due to the significance of the assumptions used, payments for the next twelve months and beyond twelve months could materially differ from historical patterns.
Corporate reserves as of June 30, 2026 were $347 and net of reinsurance were $137. These reserves related to retained run-off liabilities of its former life and annuity business. For additional information about future policy benefits and other policyholder funds and benefits payable, see Note 10 - Reserve for Future Policy Benefits and Note 11 - Other Policyholder Funds and Benefits Payable of Notes to Condensed Consolidated Financial Statements.
Purchase and Other Obligations
The Hartford’s unfunded commitments to purchase investments in limited partnerships and other alternative investments, mortgage loans, private debt and equity securities, as well as tax credits are disclosed in Note 14 - Commitments and Contingencies of Notes to Consolidated Financial Statements in The Hartford's 2025 Form 10-K Annual Report. It is anticipated that these unfunded commitments will be funded through the Company’s normal operating and investing activities.
In the normal course of business, the Company enters into contractual commitments to purchase various goods and services such as maintenance, human resources, and information technology. The Company’s operating lease commitments are disclosed in Note 20 - Leases of Notes to Consolidated Financial Statements in The Hartford's 2025 Form 10-K Annual Report. It is anticipated that these purchase commitments and operating lease obligations will be funded through the Company’s normal operating and investing activities.
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Capitalization
Capital Structure
June 30, 2026 December 31, 2025 Change
Long-term debt $ 4,374 $ 4,371 — %
Total debt 4,374 4,371 — %
Common stockholders' equity excluding AOCI, net of tax 21,670 20,702 5 %
Preferred stock 334 334 — %
AOCI, net of tax (2,371) (2,057) (15) %
Total stockholders’ equity $ 19,633 $ 18,979 3 %
Total capitalization $ 24,007 $ 23,350 3 %
Debt to stockholders’ equity 22 % 23 %
Debt to capitalization 18 % 19 %
Total capitalization increased $657 as of June 30, 2026 compared to December 31, 2025 primarily due to net income in excess of common stockholder dividends in the period, partially offset by share repurchases and an increase in net unrealized losses on fixed maturities, AFS.
For additional information on AOCI, net of tax, including net unrealized gain (losses) from securities, see Note 15 - Changes
In and Reclassifications From Accumulated Other Comprehensive Income (Loss) and Note 5 - Investments of Notes to Condensed Consolidated Financial Statements. For additional information on debt, see Note 13 - Debt of Notes to Consolidated Financial Statement in The Hartford's 2025 Form 10-K Annual Report.
Cash Flow [1]
Six Months Ended June 30,
2026 2025
Net cash provided by operating activities $ 2,234 $ 2,276
Net cash used for investing activities $ (883) $ (1,144)
Net cash used for financing activities $ (1,297) $ (1,151)
Cash and restricted cash– end of period $ 203 $ 219
[1] Cash activities include cash flows from Discontinued Operations; see Note 17 - Discontinued Operations of Notes to Condensed Consolidated Financial Statements for information on cash flows from Discontinued Operations
Cash provided by operating activities decreased in 2026 as compared to the prior year period primarily driven by higher operating expenses, including increased commissions and staffing costs, and an increase in P&C loss and loss adjustment expenses paid, partially offset by an increase in P&C and Employee Benefits premiums received.
Cash used for investing activities decreased in 2026 due to more cash used in financing activities and lower cash generated from operating activities.
Cash used for financing activities increased in 2026 as compared to the prior year period primarily driven by an increase in treasury stock acquired through share repurchases and an increase in dividends paid on common stock.
Operating cash flows for the six months ended June 30, 2026 has been adequate to meet liquidity requirements.
Equity Markets
For a discussion of the potential impact of the equity markets on capital and liquidity, see the Financial Risk section in this MD&A and the Financial Risk on Statutory Capital section of the MD&A in the Company's 2025 Form 10-K Annual Report.
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Ratings
Ratings are an important factor in establishing a competitive position in the insurance marketplace and impact the Company's ability to access financing and its cost of borrowing. There can be no assurance that the Company’s ratings will continue for any given period of time, or that they will not be changed. In the event the Company’s ratings are downgraded, the Company’s competitive position, ability to access financing, and its cost of borrowing, may be adversely impacted.
These ratings are not a recommendation to buy, sell or hold any of The Hartford's securities and they may be revised or withdrawn at any time at the discretion of the rating organization. Each agency's rating should be evaluated independently of any other agency's rating. The system and the number of rating categories can vary across rating agencies.
Among other factors, rating agencies consider the level of statutory capital and surplus of our U.S. insurance subsidiaries as well as the level of U.S. GAAP capital held by the Company in determining the Company's financial strength and credit ratings. Rating agencies may implement changes to their capital
formulas that have the effect of increasing the amount of capital we must hold in order to maintain our current ratings. See Risk Factors disclosed in Item 1A of Part I of the Company's 2025 Form 10-K Annual Report.
Insurance Financial Strength Ratings as of July 22, 2026
A.M. Best Standard & Poor’s Moody’s
Hartford Fire Insurance Company A+ AA- Aa3
Hartford Life and Accident Insurance Company A+ AA- A1
Navigators Insurance Company A+ AA- Not Rated
Other Ratings:
The Hartford Insurance Group, Inc. senior debt a A- A3
Statutory Capital
U.S. Statutory Capital Rollforward for the Company's Insurance Subsidiaries
Property and Casualty Insurance Subsidiaries [1] [2] Employee Benefits Insurance Subsidiary Total
U.S statutory capital at January 1, 2026 $ 14,437 $ 2,674 $ 17,111
Statutory income 1,402 285 1,687
Dividends to parent (1,084) (439) (1,523)
Other items 25 (18) 7
Net change to U.S. statutory capital 343 (172) 171
U.S statutory capital at June 30, 2026 $ 14,780 $ 2,502 $ 17,282
[1]The statutory capital for property and casualty insurance subsidiaries in this table does not include the value of an intercompany note owed by HHI to Hartford Fire Insurance Company.
[2]Excludes insurance operations in the U.K.
Contingencies
Legal Proceedings
For a discussion regarding The Hartford’s legal proceedings, see the information contained in Note 13 - Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements.
Legislative and Regulatory Developments
For a discussion regarding legislative and regulatory developments, see Part II, Item 7, MD&A - Capital Resources and Liquidity, Contingencies in the Company’s 2025 Form 10-K Annual Report.
Impact of New Accounting Standards
For a discussion of accounting standards, see Note 1 - Basis of Presentation and Significant Accounting Policies of Notes to Consolidated Financial Statements included in The Hartford’s 2025 Form 10-K Annual Report.
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Acronyms
A&E Asbestos and Environmental HIMCO Hartford Investment Management Company
ABS Asset-Backed Securities HLA Hartford Life and Accident Insurance Company
ACL Allowance for Credit Losses IBNR Incurred But Not Reported
ADC Adverse Development Cover IT Information Technology
AFS Available-For-Sale LAE Loss Adjustment Expense
ALAE Allocated Loss Adjustment Expenses LCL Liability for Credit Losses
AOCI Accumulated Other Comprehensive Income (Loss) LTD Long-Term Disability
CAY Current Accident Year LTV Loan-to-Value
CLOs Collateralized Loan Obligations MD&A Management's Discussion and Analysis of Financial Conditions and Results of Operations
CMBS Commercial Mortgage-Backed Securities NAIC National Association of Insurance Commissioners
CODM Chief Operating Decision Maker NICO National Indemnity Company, a subsidiary of Berkshire Hathaway Inc. (“Berkshire”)
CPRI Credit and Political Risk Insurance NM Not Meaningful
DAC Deferred Policy Acquisition Costs OCI Other Comprehensive Income
DLR Disabled Life Reserve OTC Over-the-Counter
D&O Directors and Officers P&C Property and Casualty
DSCR Debt Service Coverage Ratio PV&T Political Violence and Terrorism
ERCC Enterprise Risk and Capital Committee PYD Prior Accident Year Development
ESPP The Hartford Employee Stock Purchase Plan RBC Risk-Based Capital
FASB Financial Accounting Standards Board RMBS Residential Mortgage-Backed Securities
FHCF Florida Hurricane Catastrophe Fund ROE Return on Equity
FHLBB Federal Home Loan Bank of Boston SEC Securities and Exchange Commission
FVO Fair Value Option SOFR Secured Overnight Financing Rate
GAAP Generally Accepted Accounting Principles TRIPRA Terrorism Risk Insurance Program Reauthorization Act
HHI Hartford Holdings, Inc. ULAE Unallocated Loss Adjustment Expenses
HIG The Hartford Insurance Group, Inc.
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Part I - Item 4. Controls and Procedures