The Hartford Reports Third Quarter 2012 Financial Results

  The Hartford Reports Third Quarter 2012 Financial Results

  *Third quarter core earnings* of $378 million, or $0.78 per diluted share,
    compared with $50 million, or $0.08 per diluted share, in the third
    quarter of 2011
  *Net income of $401 million, or $0.83 per diluted share, compared with net
    income of $60 million, or $0.11 per diluted share, in the third quarter of
    2011
  *Finalized sales agreements for Individual Life, Retirement Plans and
    Woodbury Financial Services
  *Continued strong property and casualty (P&C) renewal written pricing
    trends with Standard Commercial up 8% compared with the third quarter of
    2011
  *Book value per diluted share was $48.13, up 10% from September 30, 2011

Business Wire

HARTFORD, Conn. -- November 01, 2012

The Hartford (NYSE:HIG) reported net income of $401 million, or $0.83 per
diluted share, for the third quarter of 2012, compared with net income of $60
million, or $0.11 per diluted share, in the third quarter of 2011. The company
also reported that third quarter 2012 core earnings rose to $378 million, or
$0.78 per diluted share, from $50 million, or $0.08 per diluted share, in the
third quarter of 2011.

“The Hartford generated strong third quarter financial results, reflecting
continued P&C pricing momentum and low catastrophes," said Chairman, President
and CEO Liam E. McGee. "Renewal pricing increased 8% in Standard Commercial,
4% in personal auto and 6% in homeowners, with higher retention in all three
lines. Group Benefits long-term disability terminations improved, resulting in
a slightly lower loss ratio. Fixed income deposits grew in Mutual Funds,
resulting in significantly better net flows."

“The Hartford achieved several strategic objectives this quarter, including
the successful completion of sales agreements, ahead of schedule, for
Individual Life, Retirement Plans and Woodbury Financial Services,” added
McGee. “These transactions, which are expected to generate an approximately
$2.2 billion statutory capital benefit, are a significant step forward in The
Hartford's progress towards sharpening our focus on our P&C, Group Benefits
and Mutual Funds businesses."

*Denotes financial measures not calculated based on generally accepted
accounting principles (“non-GAAP"). More information is provided in the
Discussion of Non-GAAP Financial Measures section below.


THIRD QUARTER 2012 FINANCIAL RESULTS

                                       Three Months Ended
(in millions except per share data)    September 30,  September 30,  Change
                                        2012            2011
Net income                             $401           $60            NM^2
Net income available to common         $0.83          $0.11          NM
shareholders per diluted share
Core earnings                          $378           $50            NM
Core earnings available to common      $0.78          $0.08          NM
shareholders per diluted share
Book value per diluted share           $48.13         $43.81         10%
Book value per diluted share (ex.      $41.35         $41.44         —%
AOCI)^1

[1] Accumulated other comprehensive income (AOCI)
[2] 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.

Third quarter 2012 core earnings included the following items that, in total,
increased core earnings by $7 million, after tax, or $0.01 per diluted share,
and reduced net income by $49 million, or $0.10 per diluted share (all items
are presented after tax):

  *Current accident year catastrophe losses totaled $7 million, which was $68
    million below budget;
  *The deferred acquisition cost unlock charge (DAC unlock) included in core
    earnings was $23 million while the unfavorable DAC unlock charge included
    in net income was $79 million;
  *Net prior year P&C loss and loss adjustment expense reserve releases of
    $21 million;
  *Current accident year re-estimation of losses in P&C Commercial totaled
    $25 million; and
  *Restructuring and other costs related to the company’s exit from
    Individual Annuity new business, the sales of Individual Life, Retirement
    Plans and Woodbury Financial and other expense initiatives totaling $34
    million.

COMMERCIAL MARKETS

Third Quarter 2012 Highlights:

  *Continued pricing and underwriting initiatives and significantly lower
    catastrophe losses generated P&C Commercial core earnings of $160 million
    compared with $87 million in the third quarter of 2011
  *Renewal written price increases compared with the prior year averaged 8%
    in Standard Commercial and 15% in Middle Market workers’ compensation
  *Group Benefits core earnings were $23 million, up 15% from $20 million in
    the third quarter of 2011


P&C COMMERCIAL
($ in millions)           Three Months Ended
                         September 30,  September 30,  Change
                           2012            2011
Written premiums          $1,552         $1,551         —%
Combined ratio^1          97.5%          99.4%          1.9
Core earnings             $160           $87            84%
[1] Excludes catastrophes and prior year development*

GROUP BENEFITS
($ in millions)           Three Months Ended
                         September 30,  September 30,  Change
                           2012            2011
Fully insured premiums^2  $926           $1,000         (7%)
Loss ratio^2              79.3%          80.1%          0.8
Core earnings             $23            $20            15%
[2] Excludes buyout premiums


Commercial Markets net income rose 149% to $194 million in the third quarter
of 2012 from $78 million in the third quarter of 2011 and core earnings
increased 71% to $183 million from $107 million in the third quarter of 2011.

P&C Commercial core earnings were $160 million in the third quarter of 2012,
an 84% increase from $87 million in the third quarter of 2011 primarily due to
lower catastrophe losses. The combined ratio, excluding catastrophes and prior
year development, improved to 97.5% in the third quarter of 2012 compared with
99.4% in the third quarter of 2011. The third quarter 2012 combined ratio
included $39 million, or 2.5 points, of unfavorable current accident year loss
reserve development, before tax, related to the first half of the year,
principally for workers’ compensation and commercial auto. The third quarter
2011 combined ratio included $47 million, or 3.0 points, of unfavorable
current accident year loss reserve development, before tax, related to the
first half of 2011, principally for workers' compensation.

P&C Commercial continued to achieve strong renewal written pricing in all
business lines in the third quarter of 2012. Standard Commercial renewal
written pricing increases averaged 8%, a 1 point increase over the second
quarter of 2012. Middle Market pricing increased 11%, while Middle Market
workers’ compensation renewal pricing increased 15% in the quarter. Retention
remained strong in Small Commercial, improving to 84% in the quarter from 82%
in the third quarter of 2011 and the second quarter of 2012. Middle Market
retention for the third quarter of 2012 was 78% compared with 77% in the third
quarter of 2011 and 73% in the second quarter of 2012.

Unfavorable prior year reserve development was $10 million, after tax, in the
third quarter of 2012 compared with favorable development of $6 million, after
tax, in the third quarter of 2011. Current year catastrophe losses were $7
million, after tax, in the third quarter of 2012 compared with $60 million,
after tax, in the third quarter of 2011.

Group Benefits core earnings in the third quarter of 2012 were $23 million, up
15% compared with $20 million in the third quarter of 2011. The loss ratio
improved slightly to 79.3% compared with 80.1% in the third quarter of 2011.
Group Benefits loss experience reflects incidence that is stable but elevated
when compared to historical levels, higher severity and a continuation of the
slightly improving terminations trend in group long term disability that
emerged in mid-2012. Group life claims experience deteriorated modestly in the
quarter as compared with favorable experience in the second quarter of 2012
and the third quarter of 2011.

Third quarter 2012 fully insured premium in Group Benefits declined 7% to $926
million compared with the third quarter of 2011 due to lower persistency
resulting from the company’s targeted pricing initiatives as well as the
competitive market environment.

CONSUMER MARKETS

Third Quarter 2012 Highlights:

  *New auto and homeowners business premium rose 9% over the third quarter of
    2011
  *Automobile and homeowners policy count retention improved 2 and 3 points
    to 85% and 87%, respectively, from the third quarter of 2011
  *Combined ratio, excluding catastrophes and prior year development, was
    93.3% compared with 95.5% in third quarter of 2011


CONSUMER MARKETS
($ in millions)         Three Months Ended
                       September 30,  September 30,  Change
                         2012            2011
Written premiums        $960           $964           —%
Combined ratio^1        93.3%          95.5%          2.2
Core earnings (losses)  $93            $(10)          NM
[1] Excludes catastrophes and prior year development*


Consumer Markets had net income of $94 million for the third quarter of 2012
compared with a net loss of $16 million in the third quarter of 2011, due
principally to significantly lower catastrophe losses and favorable prior year
loss reserve development. Core earnings were $93 million in the third quarter
of 2012 compared with core losses of $10 million in the third quarter of 2011.

Third quarter 2012 net income and core earnings included no net current
accident year catastrophe losses, as $16 million, after tax, of catastrophe
losses from events occurring in the third quarter of 2012 were offset by $16
million, after tax, of favorable development on prior quarter 2012 accident
year catastrophes. Third quarter 2011 catastrophe losses totaled $73 million.
Favorable prior year development totaled $32 million, after tax, in the third
quarter of 2012 compared with $6 million, after tax, in the third quarter of
2011.

Consumer Markets combined ratio, excluding catastrophes and prior year
development, was 93.3% in the third quarter of 2012, down from 95.5% in the
third quarter of 2011. The improvement reflects an almost 7 point improvement
in the homeowners' combined ratio, excluding catastrophes and prior year
development, due primarily to earned pricing increases, lower frequency of
non-catastrophe weather claims and lower severity. This experience was
partially offset by higher auto physical damage severity, consistent with
trends earlier in 2012.

Third quarter 2012 written premiums were flat compared with the third quarter
of 2011, while earned premiums declined 2% to $912 million. New business
written rose 9% to $116 million due to strong production in AARP Agency. Auto
new business premiums rose 5% while homeowners increased 23%. Third quarter
2012 policy count retention for auto and homeowners increased 2 and 3 points
to 85% and 87%, respectively, from the third quarter of 2011.

WEALTH MANAGEMENT

Third Quarter 2012 Highlights:

  *Announced definitive agreements to sell Individual Life to Prudential
    Financial, Retirement Plans to MassMutual and Woodbury Financial Services
    to AIG Advisor Group during the third quarter of 2012
  *Non-Proprietary Mutual Funds net outflows declined to $0.4 billion,
    reflecting strong flows in fixed income and balanced funds


WEALTH MANAGEMENT
($ in millions)                        Three Months Ended
Core Earnings (losses)                 September 30,  September 30,  Change
                                        2012            2011
Individual Life                        $21            $37            (43%)
Mutual Funds                           18             24             (25%)
Retirement Plans                       5              4              25%
Total Core Earnings, excluding DAC     $44            $65            (32%)
unlock
DAC Unlock                             (12)           (81)           85%
Total Wealth Management                $32            $(16)          NM
                                                                    

Wealth Management net income was $22 million in the third quarter of 2012
compared with a net loss of $8 million in the third quarter of 2011. Net
income for the period included a DAC unlock charge of $14 million, after tax,
for market performance and assumptions changes as compared with a charge of
$85 million, after tax, in the third quarter of 2011. Third quarter 2012 core
and net income for Wealth Management included $19 million, after tax, of
restructuring and other expenses.

Core earnings, excluding DAC unlock and restructuring and other expenses, were
$63 million, in the third quarter of 2012, slightly below third quarter 2011
core earnings of $65 million due to higher benefits in Individual Life and
lower core earnings in Mutual Funds compared with the prior year. The DAC
unlock charge included in core earnings was $12 million, after tax, in the
third quarter of 2012 compared with $81 million, after tax, in the third
quarter of 2011.

Mutual Funds third quarter 2012 core earnings were $18 million, down 25%
compared with $24 million in the third quarter of 2011. The reduction in core
earnings was principally due to higher distribution and marketing expenses and
lower fees as a result of lower average assets under management compared to
the third quarter of 2011.

Individual Life third quarter 2012 core earnings, excluding DAC unlock, were
$21 million compared with $37 million in the third quarter of 2011. Core
earnings decreased from the third quarter of 2011 principally due to $12
million, after tax, of restructuring and other costs as well as higher life
insurance benefits compared to the third quarter of 2011.

Retirement Plans third quarter 2012 core earnings, excluding DAC unlock,
totaled $5 million compared with $4 million in the third quarter of 2011. Core
earnings in the third quarter of 2012 included a $7 million, after tax, charge
for restructuring and other expenses.

RUNOFF OPERATIONS

  *Life Other Operations core earnings, excluding DAC unlock, were $147
    million compared with $169 million in the third quarter of 2011
  *P&C Other Operations core earnings were $21 million
  *Runoff Operations net realized capital gains, after tax and DAC, which are
    not included in core earnings, were $12 million.
  *Net realized capital gains from hedging and assumption changes were $77
    million, largely related to U.S. Annuity


RUNOFF OPERATIONS
($ in millions)                        Three Months Ended
Core Earnings                          September 30,  September 30,  Change
                                        2012            2011
Life Other Operations, excluding DAC   $147           $169           (13%)
unlock
DAC unlock                             (11)           (126)          91%
Life Other Operations                  136            43             NM
P&C Other Operations                   21             9              133%
Total Runoff Operations                $157           $52            NM
                                                                    

Runoff Operations third quarter 2012 net income was $169 million compared with
net income of $113 million in the third quarter of 2011. Net income includes
net realized capital gains, after tax and after DAC, of $12 million in the
third quarter of 2012 compared with $61 million in the third quarter of 2011.
Runoff Operations third quarter 2012 core earnings, excluding DAC unlock, were
$168 million compared with core earnings, excluding DAC unlock, of $178
million in the third quarter of 2011.

Runoff Operations net income for the third quarter of 2012 included a DAC
unlock charge for market performance and assumption changes in the Life Other
Operations segment of $65 million, after tax, compared with a charge of $384
million, after tax, in the third quarter of 2011. The DAC unlock charge for
market and assumption changes included in core earnings was $11 million, after
tax, in the third quarter of 2012 as compared with a DAC unlock charge $126
million, after tax, in the third quarter of 2011.

Life Other Operations core earnings, excluding DAC unlock, in the third
quarter of 2012 declined 13% to $147 million from $169 million in the third
quarter of 2011 due to U.S. variable annuity outflows and lower alternative
investment yields. Account values for the Life Other Operations segment
totaled $167.0 billion at September 30, 2012, down 1% from $168.9 billion at
September 30, 2011, reflecting a decrease in account values due to $10.2
billion of surrenders over the past twelve months in the U.S. variable annuity
block, largely offset by the impact of higher capital market levels.

For the third quarter of 2012, net realized gains from hedging were $77
million. Gains in the U.S. Guaranteed Minimum Withdrawal Benefit (GMWB)
program, which benefited from a reduction in the GMWB liability due to changes
in assumptions for lower than anticipated benefit utilization by
policyholders, were partially offset by losses on the international program
due to increases in capital markets.

Core earnings for P&C Other Operations in the third quarter of 2012 totaled
$21 million compared with core earnings of $9 million in the third quarter of
2011. Third quarter 2012 results included unfavorable prior year loss reserve
development of approximately $1 million, after tax, while third quarter of
2011 included unfavorable prior year loss reserve development of $14 million,
including environmental loss reserve development of $12 million, after tax.
The company completed its comprehensive annual environmental loss reserve
study in the second quarter of 2012, in addition to its annual asbestos loss
reserve study.

CORPORATE

Corporate incurred a net loss of $78 million in the third quarter of 2012
compared with a net loss of $107 million in the third quarter of 2011.
Corporate core losses of $87 million in the third quarter of 2012 increased
slightly compared with core losses of $83 million in the third quarter of 2011
due to higher expenses, including restructuring and other costs that were not
fully offset by a reduction in interest expenses compared with the third
quarter of 2011.

INVESTMENTS

Third Quarter 2012 Highlights:

  *Annualized investment yield of 4.2% compared with 4.3% in the third
    quarter of 2011
  *Investment income on limited partnerships and other alternative
    investments was $28 million, before tax, compared with $67 million, before
    tax, in the third quarter of 2011
  *Net impairment losses, which are not included in core earnings, were $24
    million, after tax and DAC, compared with $34 million, after tax and DAC,
    in the third quarter of 2011


INVESTMENTS
($ in millions)                        Three Months Ended
Amounts presented before tax           September 30,  September 30,  Change
                                        2012            2011
Net investment income, excluding       $1,030         $1,062         (3%)
trading securities
Net impairment losses including        $(37)          $(60)          38%
mortgage loan loss reserves
Annualized investment yield^1          4.2%           4.3%           (0.1)
Annualized investment yield,
excluding limited partnerships and     4.2%           4.1%           0.1
other alternative investments^1

[1] Yields calculated using annualized net investment income (excluding income
related to equity securities, trading) divided by the monthly average invested
assets at cost, amortized cost, or adjusted carrying value, as applicable,
excluding equity securities, trading, and consolidated variable interest
entity non-controlling interests.

Net investment income, excluding trading securities, declined 3% to $1.03
billion, before tax, in the third quarter of 2012 compared with the third
quarter of 2011 due to lower returns on limited partnerships and other
alternative investments. Annualized investment yield, before tax, was 4.2% in
the third quarter of 2012 compared with 4.3% in the third quarter of 2011 due
to lower returns on limited partnerships and other alternative investments.
Annualized returns on limited partnerships and other alternative investments
were approximately 4% in the third quarter of 2012 approximately $10 million
below the annualized 9% budgeted yield assumption, compared with 13% in the
third quarter of 2011.

Annualized investment yield, excluding limited partnerships and other
alternative investments, was up slightly to 4.2% compared to 4.1% in the third
quarter of 2011 resulting from modest duration extension of the portfolio and
a slight increase in higher yielding asset classes in the company's general
account.

Net impairment losses and changes to the mortgage loan loss reserve in the
quarter were $37 million, before tax ($24 million, after tax and DAC) compared
with losses of $60 million ($34 million, after tax and DAC) in the third
quarter of 2011.

Total invested assets, excluding trading securities, were $107.2 billion as of
September30, 2012, compared with $105.4 billion at September30, 2011.

STOCKHOLDERS’ EQUITY

The Hartford’s stockholders’ equity was $23.4 billion on September 30, 2012, a
9% increase over stockholders’ equity of $21.4 billion on September 30, 2011.
Book value per diluted common share, which includes the dilutive effect of the
company’s common stock warrants and mandatory convertible preferred stock, was
$48.13 at September 30, 2012, an increase of 10% compared with $43.81 at
September 30, 2011. Excluding AOCI, book value per diluted common share*
remained essentially flat at $41.35 on September 30, 2012, compared with
$41.44 on September 30, 2011.

CONFERENCE CALL

The Hartford will discuss its third quarter 2012 financial results in a
conference call on Friday, Nov. 2, 2012, at 9 a.m. EDT. The call, along with a
slide presentation, can be accessed live or as a replay through the investor
relations section of The Hartford's website at http://ir.thehartford.com. The
slide presentation will be posted on The Hartford’s website at approximately
8:30 a.m. EDT on Nov. 2, 2012.

More detailed financial information can be found in The Hartford's Investor
Financial Supplement for the third quarter of 2012 which is available at
http://thehartford.com.

ABOUT THE HARTFORD

The Hartford Financial Services Group, Inc. (NYSE: HIG) is a leading provider
of insurance and wealth management services for millions of consumers and
businesses worldwide. The Hartford is consistently recognized for its superior
service, its sustainability efforts and as one of the world's most ethical
companies. More information on the company and its financial performance is
available at www.thehartford.com.

HIG-F


THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INCOME STATEMENTS BY DIVISION
Three Months Ended September 30, 2012($ in millions)                               
                                                                 
                   Commercial  Consumer  Wealth      Runoff      Corporate  Consolidated
                     Markets      Markets    Management   Operations
Earned premiums      $2,508       $912       $(26)        $7           $—          $3,401
Fee income           15           —          472          586          45          1,118
Net investment
income (loss)
Securities
available-for-sale   320          38         228          436          8           1,030
and other
Equity securities
held for trading    —           —         —           710         —          710
[1]
Total net
investment income    320          38         228          1,146        8           1,740
(loss)
Other revenues       27           37         —            —            —           64
Net realized
capital gains       21          2         (8)         95          9          119
(losses)
Total revenues       2,891        989        666          1,834        62          6,442
                                                                                   
Benefits, losses,
and loss             1,860        579        317          514          1           3,271
adjustment
expenses
Benefits, losses,
and loss
adjustment
expenses – returns   —            —          —            710          —           710
credited on
International
variable annuities
[1]
Amortization of
deferred policy      240          82         39           205          —           566
acquisition costs
Insurance
operating costs      532          189        264          180          57          1,222
and other expenses
Interest expense     —            —          —            —            109         109
Restructuring and   2           —         29          5           17         53
other costs
Total benefits and   2,634        850        649          1,614        184         5,931
expenses
                                                                                   
Income (loss) from
continuing           257          139        17           220          (122)       511
operations before
income taxes
Income tax expense  61          45        (5)         51          (44)       108
(benefit)
Income (loss) from
continuing           196          94         22           169          (78)        403
operations
Less: Loss from
discontinued        (2)         —         —           —           —          (2)
operations, net of
tax
Net income (loss)    194          94         22           169          (78)        401
Less: Loss from
discontinued         (2)          —          —            —            —           (2)
operations, net of
tax
Less: Net realized
gains (losses),
net of tax and      13          1         (10)        12          9          25
DAC, excluded from
core
Core earnings        $183         $93        $32          $157         $(87)       $378
(losses)

[1] Includes dividend income and mark-to-market effects of trading securities
 supporting the international variable annuity business, which are classified
in net investment income with corresponding amounts credited to policyholders
                           within interest credited


THE HARTFORD FINANCIAL SERVICES GROUP, INC.

INCOME STATEMENTS BY DIVISION
Three Months Ended September 30, 2011($ in millions)                               
                                                                 
                   Commercial  Consumer  Wealth      Runoff      Corporate  Consolidated
                     Markets      Markets    Management   Operations
Earned premiums      $2,553       $930       $(24)        $59          $—          $3,518
Fee income           16           —          514          607          55          1,192
Net investment
income (loss)
Securities
available-for-sale   319          46         216          480          1           1,062
and other
Equity securities
held for trading    —           —         (1)         (1,889)     —          (1,890)
[1]
Total net
investment income    319          46         215          (1,409)      1           (828)
(loss)
Other revenues       28           35         —            —            —           63
Net realized
capital gains       (45)        (10)      26          655         (51)       575
(losses)
Total revenues       2,871        1,001      731          (88)         5           4,520
                                                                                   
Benefits, losses,
and loss             1,983        767        341          921          (6)         4,006
adjustment
expenses
Benefits, losses,
and loss
adjustment
expenses – returns   —            —          —            (1,889)      —           (1,889)
credited on
International
variable annuities
[1]
Amortization of
deferred policy      238          84         149          534          —           1,005
acquisition costs
Insurance
operating costs      567          180        274          209          43          1,273
and other expenses
Interest expense     —            —          —            —            128         128
Restructuring and   —           —         —           —           14         14
other costs
Total benefits and   2,788        1,031      764          (225)        179         4,537
expenses
Income (loss) from
continuing           83           (30)       (33)         137          (174)       (17)
operations before
income taxes
Income tax expense  3           (14)      (25)        24          (62)       (74)
(benefit)
Income (loss) from
continuing           80           (16)       (8)          113          (112)       57
operations
Less: Income
(loss) from
discontinued        (2)         —         —           —           5          3
operations, net of
tax
Net income (loss)    78           (16)       (8)          113          (107)       60
Less: Income
(loss) from
discontinued         (2)          —          —            —            5           3
operations, net of
tax
Less: Net realized
gains (losses),
net of tax and      (27)        (6)       8           61          (29)       7
DAC, excluded from
core
Core earnings        $107         $(10)      $(16)        $52          $(83)       $50
(losses)
                                                                                   

[1] Includes dividend income and mark-to-market effects of trading securities
 supporting the international variable annuity business, which are classified
in net investment income with corresponding amounts credited to policyholders
                           within interest credited


THE HARTFORD FINANCIAL SERVICES GROUP, INC.
RESULT BY SEGMENT
($ in millions, except per share data)

                                       Three Months Ended
Property & Casualty Commercial          September 30,  September 30,  Change
                                        2012            2011
                                        160            87             84%
Group Benefits                         23             20             15%
Commercial Markets core earnings        183             107             71%
Consumer Markets core earnings          93              (10)            NM
(losses)
Individual Life                         21              37              (43)%
Retirement Plans                        5               4               25%
Mutual Funds                           18             24             (25)%
Wealth Management core earnings,        44              65              (32)%
excluding DAC unlock
DAC unlock                             (12)           (81)           85%
Wealth Management core earnings         32              (16)            NM
(losses)
Life Other Operations core earnings,    147             169             (13)%
excluding DAC unlock
DAC unlock                             (11)           (126)          91%
Life Other Operations core earnings     136             43              NM
P&C Other Operations                   21             9              133%
Total Runoff Operations core earnings   157             52              NM
Corporate core losses                  (87)           (83)           (5)%
Core earnings                           $378            $50             NM
Add: Net realized capital gains, net
of tax and DAC, excluded from core      25              7               NM
earnings
Add: Income (loss) from discontinued   (2)            3              NM
operations
Net income                             401            60             NM
PER SHARE DATA
Diluted Earnings Per Share
Core earnings                           $0.78           $0.08           NM
Add: Net realized capital gains, net
of tax and DAC, excluded from core      0.05            0.02            150%
earnings
Add: Loss from discontinued            —              0.01           (100)%
operations
Net income available to common         $0.83          $0.11          NM
shareholders

[1] NM: 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.”

DISCUSSION OF NON-GAAP FINANCIAL MEASURES

The Hartford uses non-GAAP financial measures in this press release to assist
investors in analyzing the company's operating performance for the periods
presented herein. Because The Hartford's calculation of these measures may
differ from similar measures used by other companies, investors should be
careful when comparing The Hartford's non-GAAP financial measures to those of
other companies. Definitions and calculations of other financial measures used
in this press release can be found below and in The Hartford's Investor
Financial Supplement for the third quarter of 2012, which is available on The
Hartford's website, http://ir.thehartford.com.

Book value per diluted common share excluding accumulated other comprehensive
income ("AOCI”): Book value per diluted common share excluding AOCI is a
non-GAAP financial measure based on a GAAP financial measure. It is calculated
by dividing (a) common stockholders' equity excluding AOCI, net of tax, by (b)
diluted common shares outstanding. The Hartford provides book value per
diluted common share excluding AOCI to enable investors to analyze the
company’s stockholders’ equity excluding the effect of changes in the value of
the company’s investment portfolio and other assets due to interest rates,
currency and other factors. The Hartford believes book value per diluted
common share excluding AOCI is useful to investors because it eliminates the
effect of items that can fluctuate significantly from period to period,
primarily based on changes in market value. Stockholders’ equity per diluted
common share is the most directly comparable GAAP measure. A reconciliation of
stockholders’ equity per diluted common share to book value per diluted common
share excluding AOCI as of September 30, 2012 and September 30, 2011, is set
forth below.

                                      Three Months Ended
                                      September 30,  September 30,  Change
                                        2012            2011
Stockholders’ equity per diluted       $48.13         $43.81         10%
common share, including AOCI
Less: Per share impact of AOCI         6.78           2.37           186%
Book value per diluted common share,   $41.35         $41.44         —%
excluding AOCI
                                                                        

Combined ratio before catastrophes and prior accident year development:
Combined ratio before catastrophes and prior accident year development is a
non-GAAP financial measure. Combined ratio is the most directly comparable
GAAP measure. The combined ratio is the sum of the loss and loss adjustment
expense ratio, the expense ratio and the policyholder dividend ratio. This
ratio measures the cost of losses and expenses for every $100 of earned
premiums. A combined ratio below 100% demonstrates a positive underwriting
result. A combined ratio above 100% indicates a negative underwriting result*.
The combined ratio before catastrophes and prior accident year development
represents the combined ratio for the current accident year, excluding the
impact of catastrophes and prior year development. 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 development. A reconciliation of the combined ratio to the combined
ratio before catastrophes and prior year development is provided in the table
below.

                                                Three Months Ended
P&C Commercial                                   September 30,  September 30,
                                                 2012            2011
                                                                
Combined ratio                                   99.1            104.8
Catastrophe ratio                                0.5             6.1
Non-catastrophe prior year development          1.1           (0.7     )
Combined ratio before prior year development &   97.5            99.4
catastrophes
                                                                 
Consumer Markets
Combined ratio                                   87.9            106.7
Catastrophe ratio                                (0.7     )      12.2
Non-catastrophe prior year development          (4.7     )     (1.0     )
Combined ratio before prior year development &   93.3            95.5
catastrophes
                                                                 

Core Earnings: The Hartford uses the non-GAAP financial measure core earnings
as a measure of the company's operating performance. The Hartford believes
that the measure core earnings provides investors with a measure of the
performance of the company's ongoing businesses because it reveals trends in
the company's insurance and financial services businesses before the net
effect of certain realized capital gains and losses, discontinued operations
and loss from the extinguishment of debt. Some realized capital 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 activities of the company's business.

Accordingly, core earnings excludes the effect of all realized gains and
losses (net of tax and the effects of deferred policy acquisition costs) that
tend to be highly variable from period to period based on capital market
conditions. The Hartford believes, however, that some realized capital gains
and losses are integrally related to the company's insurance operations, so
core earnings includes certain net realized gains and losses such as net
periodic settlements on credit derivatives and net periodic settlements on the
Japan fixed annuity cross currency swap. These net realized gains and losses
are directly related to an offsetting item included in the statement of
operations such as net investment income (loss). Net income is the most
directly comparable GAAP measure. Core earnings should not be considered as a
substitute for net income and does not reflect the overall profitability of
the company's business. Therefore, The Hartford believes that it is useful for
investors to evaluate both net income and core earnings when reviewing the
company's performance. A reconciliation of core earnings to net income as of
September 30, 2012 and September 30, 2011, is included in this press release.
A reconciliation of core earnings to net income for individual reporting
segments can be found in The Hartford's Investor Financial Supplement for the
third quarter of 2012.

Core earnings available to common shareholders per diluted share: Core
earnings available to common shareholders per diluted share is calculated
based on the non-GAAP financial measure core earnings. The Hartford believes
that the measure core earnings per diluted common share provides investors
with a valuable measure of the company's operating performance for many of the
same reasons applicable to its underlying measure, core earnings. Net income
per diluted common share is the most directly comparable GAAP measure. Core
earnings available to common shareholders per diluted share should not be
considered as a substitute for net income per diluted common share and does
not reflect the overall profitability of the company's business.

Therefore, The Hartford believes that it is useful for investors to evaluate
both net income per diluted common share and core earnings available to common
shareholders per diluted share when reviewing the company's performance. A
reconciliation of core earnings available to common shareholders per diluted
share to net income per diluted common share as of September 30, 2012 and
September 30, 2011 is included in this press release under the heading “The
Hartford Financial Services Group, Inc. Results By Segment.”

Underwriting results: The Hartford's management evaluates profitability of the
P&C Commercial and Consumer Markets segments primarily on the basis of
underwriting results. Underwriting results 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 GAAP
measure. Underwriting results are 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
the measure underwriting results provides investors with a valuable measure of
before-tax profitability derived from underwriting activities, which are
managed separately from the company's investing activities. A reconciliation
of underwriting results to net income as of September 30, 2012, and September
30, 2011, is set forth below.


                                               THREE MONTHS ENDED
                                               September 30,  September 30,
                                                 2012            2011
P&C Commercial                                                
Net income                                       $164            $53
Less: Income (loss) from discontinued            (2)             (2)
operations, after tax
Less: Net realized capital gains (losses)        6               (32)
after tax
Less: Income tax expense                         (50)            (19)
Less: Periodic net coupon settlements on         —               (2)
credit derivatives, before tax
Less: Restructuring and other costs              (1)             —
Less: Other expenses                             (25)            (35)
Less: Net investment income                     222            217
Underwriting results                             $14             $(74)
                                                                 
Consumer Markets
Net loss                                         $94             $(16)
Less: Net realized capital gains (losses)        1               (6)
after tax
Less: Income tax (expense) benefit               (44)            10
Less: Periodic net coupon settlements on         1               —
credit derivatives, before tax
Less: Other expenses                             (12)            (4)
Less: Net investment income                     38             46
Underwriting results                             $110            $(62)
                                                                 

SAFE HARBOR STATEMENT

Some of the statements in this release should be considered forward-looking
statements as defined in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by words such as “anticipates,”
“intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “projects”
and similar references to the future. Examples of forward-looking statements
include, but are not limited to, statements the company makes regarding future
results of operations. The Hartford cautions investors that these
forward-looking statements are not guarantees of future performance, and
actual results may differ materially. Investors should consider the important
risks and uncertainties that may cause actual results to differ. These
important risks and uncertainties include: challenges related to the company’s
current operating environment, including continuing uncertainty about the
strength and speed of the recovery in the United States and other key
economies and the impact of governmental stimulus and austerity initiatives,
sovereign credit concerns, including the potential consequences associated
with recent and further potential downgrades to the credit ratings of debt
issued by the United States government or European sovereigns and other
adverse developments on financial, commodity and credit markets and consumer
spending and investment, including in respect of Europe, and the effect of
these events on our returns in our life and property and casualty investment
portfolios and our hedging costs associated with our variable annuities
business; the risks, challenges and uncertainties associated with our March
21, 2012 announcement that we will focus on our property and casualty, group
benefits and mutual fund businesses, place our Individual Annuity business
into run-off and pursue sales or other strategic alternatives for the
Individual Life, Woodbury Financial Services and the Retirement Plans
businesses and related implementation plans and goals and objectives, the
success of our initiatives relating to the realignment of our business,
including the continuing realignment of our hedge program for our variable
annuity business, and plans to improve the profitability and long-term growth
prospects of our key divisions, including through opportunistic acquisitions
or divestitures or other actions or initiatives, and the impact of regulatory
or other constraints on our ability to complete these initiatives and deploy
capital among our businesses as and when planned; market risks associated with
our business, including changes in interest rates, credit spreads, equity
prices, market volatility and foreign exchange rates, and implied volatility
levels, as well as continuing uncertainty in key sectors such as the global
real estate market; the impact on our investment portfolio if our investment
portfolio is concentrated in any particular segment of the economy; volatility
in our earnings and potential material changes to our results resulting from
our adjustment of our risk management program to emphasize protection of
statutory surplus; the impact on our statutory capital of various factors,
including many that are outside the company’s control, which can in turn
affect our credit and financial strength ratings, cost of capital, regulatory
compliance and other aspects of our business and results; risks to our
business, financial position, prospects and results associated with negative
rating actions or downgrades in the company’s financial strength and credit
ratings or negative rating actions or downgrades relating to our investments;
the potential for differing interpretations of the methodologies, estimations
and assumptions that underlie the valuation of the company’s financial
instruments that could result in changes to investment valuations; the
subjective determinations that underlie the company’s evaluation of
other-than-temporary impairments on available-for-sale securities; losses due
to nonperformance or defaults by others; the potential for further
acceleration of deferred policy acquisition cost amortization; the potential
for further impairments of our goodwill or the potential for changes in
valuation allowances against deferred tax assets; the possible occurrence of
terrorist attacks and the company’s ability to contain its exposure, including
the effect of the absence or insufficiency of applicable terrorism legislation
on coverage; the possibility of unfavorable loss development including with
respect to long-tailed exposures; the difficulty in predicting the company’s
potential exposure for asbestos and environmental claims; the possibility of a
pandemic, earthquake, or other natural or man-made disaster that may adversely
affect our businesses and cost and availability of reinsurance; weather and
other natural physical events, including the severity and frequency of storms,
hail, winter storms, hurricanes and tropical storms, as well as climate change
and its potential impact on weather patterns; the response of reinsurance
companies under reinsurance contracts and the availability, pricing and
adequacy of reinsurance to protect the company against losses; actions by our
competitors, many of which are larger or have greater financial resources than
we do; the company’s ability to distribute its products through distribution
channels, both current and future; the cost and other effects of increased
regulation as a result of the enactment of the Dodd-Frank Wall Street Reform
and Consumer Protection Act of 2010 which, among other effects, has resulted
in the establishment of a newly created Financial Services Oversight Council
with the power to designate “systemically important” institutions, will
require central clearing of, and/or impose new margin and capital requirements
on, derivatives transactions, and created a new “Federal Insurance Office”
within the U.S. Department of the Treasury; unfavorable judicial or
legislative developments; the uncertain effects of emerging claim and coverage
issues; the potential effect of other domestic and foreign regulatory
developments, including those that could adversely impact the demand for the
company’s products, operating costs and required capital levels; regulatory
limitations on the ability of the company and certain of its subsidiaries to
declare and pay dividends, including dividends associated with the proceeds
from a sale of any of our life businesses; the company’s ability to
effectively price its property and casualty policies, including its ability to
obtain regulatory consents to pricing actions or to non-renewal or withdrawal
of certain product lines; the company’s ability to maintain the availability
of its systems and safeguard the security of its data in the event of a
disaster, cyber or other information security incident or other unanticipated
event; the risk that our framework for managing business risks may not be
effective in mitigating material risk and loss to the company; the potential
for difficulties arising from outsourcing relationships; the impact of
potential changes in federal or state tax laws, including changes affecting
the availability of the separate account dividend received deduction; the
impact of potential changes in accounting principles and related financial
reporting requirements; the company’s ability to protect its intellectual
property and defend against claims of infringement; and other factors
described in such forward-looking statements and other factors described in
The Hartford’s 2011 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q
for the quarters ended March 31, 2012, June 30, 2012 and September 30, 2012,
and other filings The Hartford makes with the Securities and Exchange
Commission.

Any forward-looking statement made by the company in this release speaks only
as of the date of this release. Factors or events that could cause the
company’s actual results to differ may emerge from time to time, and it is not
possible for the company to predict all of them. The company undertakes no
obligation to publicly update any forward-looking statement, whether as a
result of new information, future developments or otherwise.

Contact:

The Hartford Financial Services Group, Inc.
Media Contact:
Shannon Lapierre, 860-547-5624
shannon.lapierre@thehartford.com
or
Investor Contact:
Sabra Purtill, CFA, 860-547-8691
sabra.purtill@thehartford.com
 
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