Market Overview

A.M. Best Affirms Credit Ratings of The Hartford Financial Services Group, Inc. and Its Property/Casualty Subsidiaries; Upgrades Issuer Credit Rating of Hartford Life and Accident Insurance Company


A.M. Best has affirmed the Long-Term Issuer Credit Rating
(Long-Term ICR) of "a-" and the Long- and Short-Term Issue Credit
Ratings (Long-Term IR; Short-Term IR) of The Hartford Financial
Services Group, Inc.
(The Hartford) (NYSE:HIG), which is the
ultimate parent of the companies hereinafter mentioned. A.M. Best also
has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and
Long-Term ICR of "aa-" of Hartford Fire Insurance Company and its
pooling subsidiaries and affiliates, collectively known as the Hartford
Insurance Pool

Concurrently, A.M. Best has upgraded the Long-Term ICR to "a+" from "a"
and affirmed the FSR of A (Excellent) of Hartford Life and Accident
Insurance Company

The outlook of these Credit Ratings (ratings) is stable. All of the
above companies are headquartered in Hartford, CT.

The ratings of the Hartford Insurance Pool reflect its balance sheet
strength, which A.M. Best categorizes as strongest, as well as its
adequate operating performance, favorable business profile and
appropriate enterprise risk management (ERM).

The balance sheet strength assessment is derived from risk-adjusted
capitalization at the strongest level, which benefits from a high credit
quality investment portfolio and a comprehensive reinsurance program
with highly rated insurers. The pool's balance sheet also benefits from
the financial flexibility afforded by the parent company, which has
access to the public debt and equity markets. Partially offsetting these
benefits are the adverse calendar-year loss reserve development trends
observed over the most recent 10-year period primarily related to
asbestos and environmental liabilities. However, at the end of 2016, the
group entered into a reinsurance agreement with National Indemnity
to cover up to $1.5 billion in future adverse loss reserve
development in its asbestos and environmental liabilities in order to
mitigate further uncertainty regarding these reserves.

The pool's operating returns are in line with the averages for the
commercial casualty composite; however, returns have trended less
favorably in recent years. While the five-year average combined ratio of
98.5% outperforms the commercial composite average by 1.5 percentage
points, underwriting results were negatively impacted by catastrophic
events in 2017, producing the highest combined ratio of the five-year
period. Investment income has been consistent, as growth in the
long-term bond portfolio mostly was offset by declining investment

The favorable business profile reflects the pool's excellent market
position within the property/casualty industry, geographic and product
line diversity, experienced management team, generally conservative
operating fundamentals and diversified underwriting initiatives, which
provide balanced growth opportunities. Management has executed various
operating initiatives to focus operations on small to middle commercial
markets and personal lines business that are viewed as less volatile and
provide opportunities for profitable growth. The pool's use of
technology platforms throughout the organization, localized support and
excellent service further strengthen its business profile.

ERM is viewed appropriate for the pool's size and complexity of its
underwriting, investment and other risks based on its ERM framework and

The ratings of HLA reflect its balance sheet strength, which A.M. Best
categorizes as very strong, its adequate operating performance,
favorable business profile and appropriate ERM. The ratings also reflect
the increased importance of HLA to the overall Hartford organization as
evidenced by the recent Aetna, Inc. transaction and divestiture
of Talcott Resolution.

HLA's ratings continue to be anchored by its very strong balance sheet,
which reflects its strong risk-adjusted capitalization and consists of
generally conservative invested assets and a modest amount of operating
leverage. Additionally, the company historically has reported favorable
reserving and asset-liability matching. With the recent acquisition of
Aetna, Inc.'s employee benefits business, the company has materially
increased its market position, as well as its distribution and
administrative capabilities. As a result, A.M. Best believes that the
company will report a favorable trend of revenue and earnings,
reflecting its enhanced competitive position, and may benefit from
synergies with the overall organization going forward.

The Hartford's debt-to-total capital ratio (excluding accumulated other
comprehensive income) and interest coverage ratios are generally within
A.M. Best's guidelines for its current ratings, although the interest
coverage ratio was adversely impacted in 2017 by charges associated with
the sale of Talcott Resolution. A.M. Best anticipates The Hartford will
maintain solid liquidity at the holding company to support any potential
capital needs of its operating subsidiaries.

For a complete listing of The Hartford's FSRs, Long-Term ICRs and Short-
and Long-Term IRs, please visit The
Hartford Financial Services Group, Inc.

This press release relates to Credit Ratings that have been published
on A.M. Best's website. For all rating information relating to the
release and pertinent disclosures, including details of the office
responsible for issuing each of the individual ratings referenced in
this release, please see A.M. Best's
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases

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