Reserve for Unpaid Losses and Loss Adjustment Expenses

9 Months Ended

Sep. 30, 2025

Liability for Unpaid Claims and Claims Adjustment Expense, Activity in Liability [Abstract]

Reserve for Unpaid Losses and Loss Adjustment Expenses

Property & Casualty Insurance Product Reserves, Net of Reinsurance

Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses


	For the nine months ended September 30,
	2025		2024
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	36,404	$	34,044
Reinsurance and other recoverables	6,753		6,696
Beginning liabilities for unpaid losses and loss adjustment expenses, net	29,651		27,348
Provision for unpaid losses and loss adjustment expenses
Current accident year	8,401		7,799
Prior accident year development [1]	(412)		(221)
Total provision for unpaid losses and loss adjustment expenses	7,989		7,578
Change in deferred gain on retroactive reinsurance included in other liabilities [1]	64		87
Payments
Current accident year	(2,038)		(1,852)
Prior accident years	(4,586)		(4,078)
Total payments	(6,624)		(5,930)
Foreign currency adjustment	32		(9)
Ending liabilities for unpaid losses and loss adjustment expenses, net	31,112		29,092
Reinsurance and other recoverables	6,627		6,603
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	37,739	$	35,695

[1] Prior accident year development for the nine months ended September 30, 2025 and 2024 included a $64 and $87 benefit for amortization of a deferred gain under retroactive reinsurance accounting, respectively, related to the Navigators Adverse Development Cover (the "Navigator's ADC"). For additional information regarding the ADC reinsurance agreement, refer to "Change in Deferred Gain on Retroactive Reinsurance" discussion below.

Unfavorable (Favorable) Prior Accident Year Development


	For the nine months ended September 30,
		2025		2024
Workers’ compensation		$	(188)	$	(188)
Workers’ compensation discount accretion		34		34
General liability		—		81
Marine		—		(1)
Package business		—		(6)
Commercial property		(28)		(7)
Professional liability		(11)		(7)
Bond		(22)		(22)
Assumed reinsurance		—		24
Commercial automobile liability		—		26
Personal automobile liability		(55)		(13)
Homeowners		(36)		(15)
Net asbestos and environmental ("A&E") reserves		—		—



Catastrophes		(39)		(38)
Uncollectible reinsurance		6		—
Other reserve re-estimates, net		(9)		(2)
Prior accident year development before change in deferred gain		(348)		(134)
Change in deferred gain on retroactive reinsurance included in other liabilities [1]		(64)		(87)
Total prior accident year development		$	(412)	$	(221)

[1]The $64 and $87 change in deferred gain on retroactive reinsurance for the nine months ended September 30, 2025 and 2024, respectively, is related to amortization of the Navigators ADC deferred gain. For additional information regarding the ADC reinsurance agreement, refer to "Change in Deferred Gain on Retroactive Reinsurance" discussion below.

Re-estimates of prior accident year reserves for the nine months ended September 30, 2025

Workers’ compensation reserves were decreased within the 2016 to 2021 accident years primarily in small business, driven by lower than previously estimated claim severity.

Commercial property reserves were decreased primarily within accident years 2023 and 2024 as a result of lower than expected severity.

Professional liability reserves were decreased due to favorable development on directors and officers ("D&O") claims driven by the 2020 to 2023 accident years, partially offset by deterioration in employment practices liability and errors and omissions ("E&O") claims across multiple accident years.

Bond reserves decreased due primarily to favorable development on commercial and contract surety bonds driven by accident years 2019 to 2021.

Personal automobile liability reserves were decreased primarily within accident years 2020 to 2023 as a result of lower than expected severity.

Homeowners reserves were decreased primarily due to favorable severity impacting accident year 2024.

Catastrophes reserves were decreased across Business Insurance and Personal Insurance primarily driven by a reduction in reserves in accident years 2021 to 2024, including favorable emergence related to various hail events.

Other reserve re-estimates, net, were decreased due to lower than expected severity on Personal Insurance automobile physical damage for accident year 2024, partially offset by unfavorable development from participation in involuntary market pools.

Re-estimates of prior accident year reserves for the nine months ended September 30, 2024

Workers’ compensation reserves were decreased within the 2016 to 2020 accident years primarily in small business, driven by lower than previously estimated claim severity. In addition, the 2020 accident year includes a $48 reduction of COVID-19 related reserves driven by favorable claim count emergence.

General liability reserves were increased primarily in response to higher frequency of large losses in the 2016 to 2019 accident years as well as increases in more recent accident years, with the increase in reserves for the three months ended September 30, 2024, focused more toward the recent accident years. In addition, reserves for sexual molestation and sexual abuse claims were increased for older accident years. Lastly, reserves for extra contractual liability claims and other miscellaneous run-off lines were reduced in response to recent favorable loss activity.

Professional liability reserves decreased modestly due to favorable development on D&O claims driven by the 2020 to 2022 accident years, partially offset by deterioration in older accident years.

Bond reserves decreased due to favorable development on commercial and contract surety driven by accident years 2019 and prior.

Assumed reinsurance reserves were increased due to higher reserve estimates in the Latin America surety and Latin America P&C businesses related to the 2020 to 2023 accident years.

Automobile liability reserves - Business Insurance increased primarily due to adverse loss development within accident years 2022 and 2023 driven by higher severity than estimated.

Automobile liability reserves - Personal Insurance were decreased primarily in response to better than anticipated accident year 2023 claim severity for property damage liability.

Homeowners reserves were decreased primarily due to favorable severity impacting accident year 2023.

Catastrophes reserves were decreased primarily within Business Insurance driven by a reduction in reserves in accident years 2021 to 2022 related to favorable emergence related to

various hail events, as well as favorable development in accident year 2022 related to Hurricane Ian.

Other reserve re-estimates, net, included a decrease in reserves due to lower severity than expected on Personal Insurance automobile physical damage for accident year 2023, offset by an increase in reserves related to unfavorable development from participation in involuntary market pools.

Settlement Agreement with Boy Scouts of America

On February 14, 2022, the Company executed a final settlement agreement (the “Settlement”) with the Boy Scouts of America ("BSA"), the Local Councils, and the attorneys representing a majority of the alleged victims, pursuant to which The Hartford agreed to pay $787 for sexual molestation and sexual abuse claims associated with liability policies issued by various Hartford writing companies in the 1970s and early 1980s. In exchange for its payment, the Company receives a complete release of its policies issued to BSA and the Local Councils, as well as an injunction against further abuse claims involving BSA. All conditions precedent to the Settlement have been satisfied, including approval by the bankruptcy court and the district court, and on April 20, 2023, The Hartford paid the Settlement amount of $787. Certain objecting parties appealed the district court’s ruling. As to issues material to The Hartford’s settlement, the Third Circuit has dismissed those appeals as moot. On October 14, 2025, certain objecting parties petitioned the U.S. Supreme

Court for review. If the U.S. Supreme Court agrees to hear the case, the court approvals for the BSA’s plan of reorganization could be open to challenge, and it is possible that adverse outcomes, if any, could have a material adverse effect on the Company’s operating results.

Change in Deferred Gain on Retroactive Reinsurance

The Company has in place an ADC reinsurance agreement that covered substantially all reserve development of Navigators Insurance Company and certain of its affiliates for 2018 and prior accident years (the “Navigators ADC”) up to an aggregate limit of $300, for which the Company had previously ceded the available limit. The Company has collected recoveries from National Indemnity Company ("NICO"), a subsidiary of Berkshire Hathaway Inc., and as a result amortized $8 and $64 of the deferred gain within benefits, losses and loss adjustment expenses during the three and nine months ended September 30, 2025, respectively, and amortized $26 and $87 during the three and nine months ended September 30, 2024, respectively. As of September 30, 2025, the deferred gain on the Navigators ADC has been fully amortized. As of December 31, 2024, the deferred gain on the Navigators ADC was $64, and is included in other liabilities on the Condensed Consolidated Balance Sheets.

Rollforward of Liabilities for Unpaid Losses and Loss Adjustment Expenses


	For the nine months ended September 30,
	2025		2024
Beginning liabilities for unpaid losses and loss adjustment expenses, gross	$	8,206	$	8,274
Reinsurance recoverables	282		254
Beginning liabilities for unpaid losses and loss adjustment expenses, net	7,924		8,020

Provision for unpaid losses and loss adjustment expenses
Current incurral year	3,949		3,929
Prior year's discount accretion	153		149
Prior incurral year development [1]	(486)		(460)
Total provision for unpaid losses and loss adjustment expenses [2]	3,616		3,618
Payments
Current incurral year	(1,899)		(1,885)
Prior incurral years	(1,841)		(1,846)
Total payments	(3,740)		(3,731)
Ending liabilities for unpaid losses and loss adjustment expenses, net	7,800		7,907
Reinsurance recoverables	281		279
Ending liabilities for unpaid losses and loss adjustment expenses, gross	$	8,081	$	8,186

[1]Prior incurral year development represents the change in estimated ultimate incurred losses and loss adjustment expenses for prior incurral years on a discounted basis.

[2]Includes unallocated loss adjustment expenses ("ULAE") of $129 and $130 for the nine months ended September 30, 2025 and 2024, respectively, that are recorded in insurance operating costs and other expenses in the Condensed Consolidated Statements of Operations.

Re-estimates of prior incurral years reserves for the nine months ended September 30, 2025

Group disability - Prior period reserve estimates decreased by approximately $403 driven by favorable long-term disability claim recoveries, paid family and medical leave incidence lower than prior assumptions, as well as a higher New York paid family leave risk adjustment benefit than expected.

Group life and accident (including group life premium waiver) - Prior period reserve estimates decreased by approximately $81 driven by favorable mortality emergence in both group term life and group accidental death and dismemberment, and continued low incidence in group life premium waiver.

Re-estimates of prior incurral years reserves for the nine months ended September 30, 2024

Group disability- Prior period reserve estimates decreased by approximately $394 largely driven by long-term disability claim incidence lower than prior assumptions and favorable recoveries on prior incurral year claims, as well as a favorable change in the recovery rate assumption.

Group life and accident (including group life premium waiver)- Prior period reserve estimates decreased by approximately $68 largely driven by favorable mortality emergence and continued low incidence in group life premium waiver.

10. Reserve for Future Policy Benefits


Rollforward of Reserve for Future Policy Benefits
	For the nine months ended September 30,
	2025						2024
	Payout Annuities		Life Conversions		Paid-up Life		Payout Annuities		Life Conversions		Paid-up Life
Present Value of Expected Net Premiums
Balance, beginning of the period			$	45					$	48
Balance, ending of the period			$	43					$	46

Present Value of Expected Future Policy Benefits
Beginning balance at single-A rate	$	128	$	106	$	168	$	137	$	113	$	185
Beginning adjustment for changes in single-A rate	—		(15)		(33)		7		(11)		(32)
Beginning balance at original discount rate	128		121		201		130		124		217
Effect of changes in cash flow assumptions	—		—		1		—		2		—
Effect of actual variances from expected experience	(1)		3		1		1		3		(1)
Adjusted beginning balance	127		124		203		131		129		216

Interest accrual and other	4		15		4		5		16		5
Benefit Payments	(9)		(21)		(16)		(9)		(23)		(19)
Ending balance at original discount rate	122		118		191		127		122		202
Ending adjustment for changes in single-A rate	4		(13)		(24)		8		(10)		(26)
Ending balance at single-A rate	$	126	$	105	$	167	$	135	$	112	$	176

Net reserve for future policy benefits	$	126	$	62	$	167	$	135	$	66	$	176
Weighted-average duration of the reserve for future policy benefits (years)	9.4		11.0		6.2		9.0		11.6		6.6


Net Reserve for Future Policy Benefits
	As of September 30,
	2025		2024
Payout Annuities	$	126	$	135
Life Conversions	62		66
Paid-up Life	167		176
Deferred Profit Liability	16		19
Other	85		74
Total	$	456	$	470


Undiscounted Expected Future Gross Premiums and Benefit Payments
	As of September 30,
	2025		2024
Payout Annuities [1]
Expected future benefit payments	$	240	$	249
Life Conversions
Expected future gross premiums	$	100	$	107
Expected future benefit payments	$	189	$	199
Paid-up Life [1]
Expected future benefit payments	$	244	$	262

[1]Payout Annuities and Paid-up Life have no expected future gross premiums.


Weighted-Average Interest Rates
	As of September 30,
	2025		2024
Payout Annuities
Interest accretion rate	5.6	%	5.6	%
Current discount rate	5.2	%	4.9	%
Life Conversions
Interest accretion rate	4.3	%	4.3	%
Current discount rate	5.4	%	5.0	%
Paid-up Life
Interest accretion rate	2.9	%	2.9	%
Current discount rate	4.8	%	4.7	%

The Company completed a review of cash flow assumptions in the third quarter 2025 and 2024, resulting in immaterial changes to the reserve for future policy benefits. For paid-up life, the net effect of updating cash flow assumptions was offset by a corresponding impact to the deferred profit liability.

Gross premiums and interest accretion recognized on long-duration insurance policies for the nine months ended September 30, 2025 and 2024 were immaterial.