2007 Corporate Report

Editor’s Note: In June 2007, Tom Marra was named President and Chief Operating Officer of The Hartford. A 28-year employee of The Hartford, Tom had been the President of the company’s Life operations.

The Hartford has one of the oldest and most recognized brands in the industry. In your new role, what opportunities do you find most compelling?

My goal is to have The Hartford become ubiquitous in the market. By that, I mean we can offer individuals and businesses the right set of products and services for any stage of their lives, or at any stage in their businesses. I want The Hartford to be not only the most respected brand, but also a market leader.

The story behind The Hartford’s success is a compelling one. We are a nearly 200-year-old company with a great legacy. But we’re also an agile enterprise with an energized workforce and some of the smartest, most innovative products and services in the marketplace.

We are a growing, diversified company, and we have positioned ourselves for significant additional growth well into the future. But to become the world’s premier insurance and investment company, we must unlock the power of our brand and realize the full potential of what we can offer the marketplace.

What challenges do you see for The Hartford?

We can’t become complacent, especially in these challenging economic times. We’re proud of our 2007 performance – core earnings were up 22 percent to $3.5 billion – but at the end of 2007, it got tough for lots of U.S. insurance-based companies. The subprime crisis, the soft pricing cycle, and the overall economy challenged our industry. Our solid financial position affords us the strength we need to meet the challenge. We have a strong balance sheet, a diverse set of businesses and solutions, and a powerful distribution network.

These kinds of conditions have spurred on teams throughout The Hartford to find new ways to grow. It’s an exciting time in the evolution of our company.

What is one of The Hartford’s biggest opportunities for growth?

We see lots of opportunity, but retirement is perhaps our biggest opportunity, and it’s a global one. We already have a full head of steam, but there’s more work to do. Our mutual fund family surpassed $50 billion assets under management in 2007, nearly doubling in less than three years and up 27 percent from a year ago. And we recently announced three acquisitions in our retirement plans business that will significantly increase our scale and help us grow in the defined contribution marketplace.

Total Life assets under management grew 14 percent to $372 billion in 2007, and growth is coming from all product lines and markets. We are the company for retirement planning – regardless of your stage of life. We are well-positioned to meet the needs of the Baby Boom generation with products to help them turn their nest eggs into lifetime income. We are also looking over the shoulder of the Baby Boom generation to understand the retirement needs of Generation X and the Millennials.

Our international strategy continues to gain momentum. We’ve only been in the United Kingdom for two years, and we have two major products – a bond product and a pension product. The pension product is taking off at a phenomenal rate. In Japan, we’ll be launching two new variable annuity products, as well as mutual funds. We have a team devoted to evaluating other countries for possible expansion.

Businesses, especially small businesses, represent a huge market in the United States. What solutions can The Hartford offer businesses?

I think we are the business partner of choice when it comes to insurance and financial solutions. We know that businesses –  especially small businesses – want to focus on what they do best. We have it all – workers’ compensation, liability, property, auto, group disability, group life, professional and employee liability insurance, 401(k) plans, and even individual life insurance for succession planning for entrepreneurs.

We can be a trusted partner for any entrepreneur and employer, and manage their insurance and financial needs while they focus on running a great business.

We are a market leader and reached 1 million small business property and casualty policies in force in March 2007. We are the No. 2 seller of fully-insured group disability. We were among the top 10 in new 401(k) plans sold in 2007; this is one of our fastest-growing businesses.

But we’re looking for more growth in 2008. We also understand the marketplace and remain in step with our producers. We constantly look for new ways to harness technology to improve service for agents and customers. In 2007, we launched The Hartford Expressway® for Small Business, a tool that enables agents to submit small business insurance applications directly from their own systems. There are almost 8 million small businesses in the United States, and there are more than 6,700 agents who sell our property casualty products to small business owners. It’s a great success story that can only get better.

In 2008, we want to grow aggressively and extend our market leadership in the small commercial segment. In the mid-size business market, we have broadened our reach through our sales underwriting force and have taken a more granular approach to assessing risk. Our focus in 2008 will be to push harder into key sectors such as technology and real estate.

In group benefits, we are using technology to make better medical underwriting decisions and improve loss ratios with an online personal health application.

The exciting opportunity here is to see our distributors – the agents and brokers, who bring many of our products to our customers – as passionate as we are about the prospect of being a full-service business solutions provider to our business customers. Together, we’ll be able to meet more of our customers’ insurance and investment needs. We have top-notch service and a full suite of products, so I see it as one of our largest opportunities in 2008 and beyond.

Are there similar growth plans for auto, home, and life insurance?

I have great expectations for our personal insurance businesses. Whether it is auto, home, or life insurance, The Hartford brand is highly regarded among consumers in terms of trust, dependability, strength, and value. This is witnessed by the fact that our personal lines policies in force continue to increase in an extremely competitive marketplace, well above industry growth rates.

We want to grow our personal lines business aggressively through expanded distribution, award-winning service, and outstanding consumer value. Our relationship with AARP continues to pay dividends. We added 400,000 AARP customers in 2007, and our partnership was extended to 2020. And when it comes to sophisticated underwriting, we are obsessed with finding the ultimate balance between risk and price.

Moreover, when it comes to life insurance, we want to be there to support the major financial events that an individual, family, or business may encounter in a lifetime. To do this, we have developed products that are multi-dimensional, complementary, and adaptable to changes that occur in life. This includes our new LifeAccess rider, which allows a policyholder to access benefits to cover the cost of a chronic illness.

Even with the headwinds we expect in 2008, I am very excited about The Hartford and its aggressive plans for growth in all businesses in the United States, Europe, and Asia. Our prospects have never looked better in our nearly 200-year history.