Hartford Insurance Group (HIG) Risk Factor Changes

or interpretations which may have a material effect on our results of operations or financial condition that is either unexpected or has a greater impact than expected.

increased statutory capital and reserve requirements.

There has also been increased regulatory scrutiny of the use of emerging technologies related to artificial intelligence, including machine learning, predictive analytics and other “big data" techniques, and the poten…

In addition, future regulatory initiatives could be adopted at the federal, state and international level that could affect the profitability of our businesses.

Regulatory and legislative developments could have a material adverse impact on our business, financial condition, results of operations or liquidity.

We rely on a combination of contractual rights and copyright, trademark, patent and trade secret laws to establish and protect our intellectual property.

In addition, in the case of business or asset dispositions, we may have continued financial exposure to the divested businesses through reinsurance, indemnification or other financial arrangements following the transa…

We may not be able to successfully integrate acquired businesses or achieve the expected synergies as a result of such acquisitions or divestitures.

We outsource certain business and administrative functions and rely on third-party vendors to perform certain functions or provide certain services on our behalf and have a significant number of information technology…

Third parties, including third party administrators and cloud-based systems, are also subject to cyber-attacks and breaches of confidential information, along with the other risks outlined above, any one of which may…

Our businesses must comply with regulations to control the privacy of customer, employee and third party data, and state, federal and international regulations regarding data privacy are becoming increasingly more one…

Our systems have been, and will likely continue to be, subject to viruses or other malicious code, unauthorized access, cyber-attacks (such as ransomware and denial of service), cyber frauds or other computer related…

We use technology to process, store, retrieve, evaluate and analyze customer and company data and information.

which the goodwill relates.

Estimated fair values of the Company’s investments are based on available market information and judgments about financial instruments, including estimates of the timing and amounts of expected future cash flows and t…

rates, loss frequency and severity, and capital requirements, among others.

Moreover, as a holding company that is separate and distinct from its insurance subsidiaries, HIG has no significant business operations of its own.

As an insurer, we frequently use reinsurance to reduce the effect of losses that may arise from, among other things, catastrophes and other risks that can cause unfavorable results of operations.

requirements for these entities are prescribed by the applicable insurance regulators and the National Association of Insurance Commissioners ("NAIC").

Our financial strength ratings, which are intended to measure our ability to meet policyholder obligations, are an important factor affecting public confidence in most of our products and, as a result, our competitive…

Changes in industry practices and in legal, judicial, social and other environmental conditions, technological advances or fraudulent activities, may require us to pay claims we did not intend to cover when we wrote t…

from achieving targeted returns.

Additionally, the property and casualty and employee benefits insurance markets have been historically cyclical, experiencing periods characterized by relatively high levels of price competition, less restrictive unde…

Cyber risk exposure exists through stand-alone cyber policies as well as cyber coverage endorsements on some property, general liability, management liability and directors and officers policies.

Our businesses also have exposure to global or nationally occurring pandemics caused by highly infectious and potentially fatal diseases spread through human, animal or plant populations.

Moreover, the assumptions used to estimate gross reserves for A&E claims, such as claim frequency over time, average severity, and how various policy provisions will be interpreted, are subject to significant uncertai…

The effects of climate change could also lead to increased credit risk of other counterparties we transact business with, including reinsurers.

workers’ compensation and employee benefits businesses.

•Inflation Risk - Inflation is a risk to our property and casualty business because, in many cases, claims are paid out many years after a policy is written and premium is collected for the risk.

In addition, due to the long-term nature of the liabilities within our Employee Benefits operations, particularly with respect to long-term disability, and our workers' compensation operations, declines in interest ra…

Part II, Item 7, MD&A - Enterprise Risk Management, Financial Risk - Equity Risk.

•Equity Markets Risk - A decline in equity markets may result in net realized losses on sales of equity securities, unrealized losses on equity securities held at fair value, reduce net investment income in future per…

Furthermore, political instability, politically motivated violence or civil unrest, may increase the frequency and severity of insured losses.

In an economic downturn, these factors may adversely affect the demand for insurance and financial products, insurance loss costs, valuation and returns on the investment portfolio, and lower the Company's profitabili…

Before a person can acquire control of a U.S.

Any proposed or future legislation or NAIC initiatives, if adopted, may be more restrictive on our ability to conduct business than current regulatory requirements or may result in higher costs or increased statutory…

There has also been increased regulatory scrutiny of the use of emerging technologies related to artificial intelligence, including

Lawmakers and regulators at the federal, state and international levels are enacting laws and promulgating regulations and guidance related to climate change, with conflicts from jurisdiction to jurisdiction possible,…

Following the U.K.’s withdrawal from the European Union, the U.K entered into a free trade agreement with the E.U.

We rely on a combination of contractual rights and copyright, trademark, patent and trade secret laws to establish and protect our intellectual property.

We may not be able to successfully integrate acquired businesses or achieve the expected synergies as a result of such acquisitions or divestitures.

Third parties, including third party administrators and cloud-based systems, are also subject to cyber-attacks and breaches of confidential information, along with the other risks outlined above, any one of which may…

changes to existing policies, file and pay claims, administer mutual funds, provide customer support, manage our investment portfolios, report on financial results and perform other necessary business functions.

unobservable inputs, even during normal market conditions.

reorganization of a subsidiary, prior claims of a subsidiary’s creditors may take precedence over the holding company’s right to a dividend or distribution from the subsidiary except to the extent that the holding com…

As an insurer, we frequently use reinsurance to reduce the effect of losses that may arise from, among other things, catastrophes and other risks that can cause unfavorable results of operations.

downgrade in the rating of our financial strength or of one of our principal insurance subsidiaries could affect our competitive position and reduce future sales of our products.

Changes in industry practices and in legal, judicial, social and other environmental conditions, technological advances or fraudulent activities, may require us to pay claims we did not

Cyber risk exposure exists through stand-alone cyber policies as well as cyber coverage endorsements on some property,

fatal diseases spread through human, animal or plant populations.

Effective December 31, 2016, the Company entered into an agreement with National Indemnity Company (“NICO”), a subsidiary of Berkshire Hathaway Inc.

factors, among others, make the variability of gross reserves estimates for these longer-tailed exposures significantly greater than for other more traditional exposures.

consumers, which could affect coverage provided under insurance contracts and administrative process.

Climate change presents risks to us as an insurer, investor and employer.

written.

•Equity Markets Risk - A decline in equity markets may result in net realized losses on sales of equity securities,

In an economic downturn, these factors may adversely affect the demand for insurance and financial products, insurance loss

As an SEC registrant, we are currently required to prepare our financial statements in accordance with U.S.

adversely affect The Hartford’s business, financial condition, results of operations or liquidity.

Any proposed or future legislation or NAIC initiatives, if adopted, may be more restrictive on our ability to conduct business than current regulatory requirements or may result in higher costs or

As an insurer, insurance affordability and availability trends are under scrutiny by federal and state lawmakers and state insurance regulators with new laws and regulations potentially impacting exposure mix, growth,…

As a public company, we continue to monitor the development of various climate disclosure regimes.

Lawmakers and regulators at the federal, state and international levels are enacting laws and promulgating regulations and guidance related to climate change, with conflicting policies from jurisdiction to jurisdictio…

based capital, accounting and financial reporting, enterprise risk management and reinsurance which could, among other things, affect statutory measures of capital adequacy, including risk-based capital ratios.

and involve additional uncertainties and risks that may negatively impact our business, financial condition, results of operations or liquidity.

and safeguard the security of our data in the event of a disaster, cyber breach, other information security incident or technology failure.”

compromises, ransomware or other security breaches to our systems or those of third parties with whom we do business.

Goodwill represents the excess of the amounts we paid to acquire subsidiaries and other businesses over the fair value of their net assets at the date of acquisition.

We use models to support, among other things, underwriting, pricing, capital allocation, reserving, investments, reinsurance, and catastrophe risk management.

We conduct the vast majority of our business through licensed insurance company subsidiaries.

Some of these changes, advances or activities may not become apparent until some time after we have issued insurance contracts that are affected by the changes, advances or activities and/or we may be unable to compen…

to autonomous vehicles, any such impacts could have a material adverse effect on our business and results of operations.

Terrorism is an example of a significant man-made potential catastrophe.

Climate change presents risks to us as an insurer, investor and employer.

For additional information on interest rate sensitivity, see Part II, Item 7, MD&A - Enterprise Risk Management, Financial Risk - Interest Rate Risk.