Despite its name, at its heart, The Hartford Financial Services Group is an insurer with a range of commercial and personal property/casualty insurance and financial products. Its commercial operations include auto, liability, workers' compensation policies, as well as group benefits and specialty commercial coverage for large companies. The Hartford also offers consumer homeowners and auto coverage. It has been the direct auto and home insurance writer for AARP's members for more than 30 years. Through its mutual fund division, the company offers wealth management products and services. The Hartford, in business since 1810, sells products through a network of independent agents and brokerages.
The Hartford's core operations revolve around property/casualty offerings, which are split up into commercial and consumer divisions. Other operating divisions include the group benefits unit and the mutual funds business. Altogether, its divisions serve some 18 million individuals.
The Hartford operates through six reporting segments: Commercial Lines (formerly Property & Casualty Commercial), Personal Lines (formerly Consumer Markets), Property & Casualty Other Operations, Group Benefits, Mutual Funds, and Talcott Resolution. It also has a Corporate segment. Commercial Lines provides workers' compensation, property, auto, marine, livestock, liability, and umbrella coverages, as well as customized products and risk management services including professional liability, bond, surety, and specialty casualty coverage. Personal Lines provides auto, homeowners, and personal umbrella coverage, including its special program designed exclusively for AARP members.
The Group Benefits segment provides employers, associations, and other groups with group life, accident, and disability products, as well as other lines including voluntary benefits and group retiree health.
Mutual Funds offers investment products and investment management and administrative services such as product design, implementation, and oversight.
The firm's Talcott Resolution unit manages remaining runoff annuity and institutional life offerings; group life products continue to be offered through the group benefits division.
In 2014 the company sold Hartford Life Insurance KK, the latest in a series of moves to exit the annuity and most of its life insurance operations.
The Hartford writes business for customers throughout the US from some 100 offices. While the US accounts for some 80% of revenues, the company also has operations in international countries.
Sales and Marketing
The Hartford promotes its products through a network of some 8,000 agents and brokers, as well as third-party administrators and trade associations. The consumer division also promotes offerings through direct mail, e-commerce, television, digital, and publication advertising efforts.
The Hartford's revenues have fluctuated over the past five years. In 2014 they declined 29% to $18.6 billion as net investment income declined and as a result of that year's sale of Hartford Life Insurance KK.
Restructuring efforts helped the company return to profitability in 2010, but the company fell back in the red in 2012 due to debt restructuring, payoffs, and goodwill impairments on divested assets. Net income has been on the rise since and, in 2014, rose 381% to $798 million on the absence of loss on extinguishment of debt and declines in losses from discontinued operations.
Cash flow from operations has also been up and down. In 2014 it increased 52% to $1.9 billion due to the higher net income and other factors.
Following the divestiture of most of its life and annuity operations, The Hartford is focused on growth of its property/casualty, mutual fund, and group benefits operations. In 2013 it announced plans to spend more than $1.5 billion through 2016 to modernize its systems to deliver new products faster and gets its infrastructure up to speed for the digital world.
The company sold operations through a number of transactions completed between 2012 and 2014 due to shareholder pressure. The Woodbury Financial Services was sold to AIG, which added the business to its SunAmerica Financial Group. In 2014 it sold Hartford Life Insurance KK to ORIX Life Insurance for $963 million. In early 2013 the company completed other planned asset divestitures (all of which were previously part of its wealth management division), including the sale of its retirement plans business to MassMutual for $400 million and the sale of its individual life business to Prudential Financial for $615 million. The company placed its individual annuity operations into runoff in 2012 and sold its annuity marketing and distribution operations to Houston-based Forethought Financial Group the following year. In late 2013 it sold its UK variable annuity business to Berkshire Hathaway's Columbia Insurance for some $285 million; the move took The Hartford out of the country completely.
The company has been focused on growth in its commercial markets and consumer markets segments. The Hartford's consumer markets division seeks marketing alliances, such as its exclusive arrangement to provide auto and homeowners polices to members of AARP. Pleased with the results of working with AARP, The Hartford has pulled back on mass marketing and is targeting other affinity groups, striking arrangements with the American Kennel Club, the Sierra Club, and the National Wildlife Federation. Meanwhile, the commercial division aims to grow by offering diversified products and services, especially to small and midsized businesses. It also widened its commercial offerings to include public sector customers in 2013.