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  • The Hartford Financial Services Group, Inc. Hartford Plaza, 690 Asylum Avenue Hartford, Connecticut 06115

    FORM 100025[2002]

    The Hartford Financial Services Group, Inc. 2002 Annual Report

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    Cover Final BP3 4/3/2006 10:36 AM Page 1

  • Financial Highlights

    (in millions except for per share data) 2002 2001 2000

    Net income [1] $ 1,000 $ 507 $ 974

    Operating income [1] [2] $ 1,250 $ 724 $ 962

    Revenues $ 15,907 $ 15,147 $ 14,703

    Assets under management [3] $ 198,676 $ 198,914 $ 183,824

    Diluted Earnings Per Share: Net income [1] $ 3.97 $ 2.10 $ 4.34 Operating income [1] $ 4.96 $ 3.00 $ 4.29

    [1] 2002 includes a $76 tax benefit at Hartford Life, Inc. (“HLI”), $11 after-tax expense related to Bancorp Services, LLC litigation, and $8 after-tax benefit in Life’s September 11 exposure. 2001 includes $440 of after-tax losses related to September 11 and a $130 tax benefit at HLI.

    [2] Operating income represents after-tax operational results excluding, as applicable, net realized capital gains or losses, restructuring charges, losses from early retirement of debt and the cumulative effect of account- ing changes.

    [3] Includes mutual fund assets and third-party assets managed by Hartford Investment Management Company.

    On the cover: Susannah Wunderlich and grandson Joe are thinking ahead to

    continued growth and renewal. Wunderlich

    and husband Richard, retirees in Naples,

    Fla., rely on life insurance, annuities and

    other products from The Hartford for a

    fertile future. They also rely on trusted

    advisors. See page 10.





















    Net Income (in millions)

    Operating Income (in millions)

    Revenues (in billions)

    Assets Under Management (in billions)

    02 01 00 02 01 00 02 01 00 02 01 00

    Corporate Information

    Corporate Headquarters The Hartford Financial Services Group, Inc. 690 Asylum Avenue Hartford, Connecticut 06115 860-547-5000

    Internet Address

    Annual Meeting Shareholders are cordially invited to attend The Hartford’s Annual Meeting of Shareholders, which will be held on Thursday, April 17, 2003 at 9:00 a.m. in the Wallace Stevens Theater at The Hartford Financial Services Group, Inc.’s home office at 690 Asylum Avenue, Hartford, Connecticut. Shareholders of record as of March 3, 2003 are entitled to notice of, and to vote at, the Annual Meeting.

    Form 10-K and Other Information Shareholders may receive, without charge, a copy of The Hartford’s Form 10-K (without exhibits) filed with the Securities and Exchange Commission for the year ended December 31, 2002 by contacting 1-888-FACT-HIG. Forms 10-Q and 8-K, press releases, and other shareholder communications are also available through this toll-free number. Electronic versions of all of The Hartford’s filings with the Securities and Exchange Commission may be accessed without charge through The Hartford’s web site at

    Transfer Agent/Shareholder Records For information or assistance regarding stock records, dividend checks or stock certificates, please contact The Hartford’s transfer agent:

    The Bank of New York Shareholder Relations Department–12W P.O. Box 11258 Church Street Station New York, NY 10286 800-524-4458

    To send certificates for transfer and address changes:

    The Bank of New York Receive and Deliver Department–11W P.O. Box 11002 Church Street Station New York, NY 10286

    Address inquiries about The Hartford’s Dividend Reinvestment and Cash Payment Plan to:

    The Bank of New York Dividend Reinvestment Department P.O. Box 1958 Newark, NJ 07101-9774


    Internet address:

    Investor Relations The Hartford Financial Services Group, Inc. Hartford Plaza, HO-1-01 Hartford, Connecticut 06115 Attn: Investor Relations 860-547-2537

    Media Inquiries The Hartford Financial Services Group, Inc. Media Relations Hartford Plaza, T-12-56 Hartford, CT 06115 860-547-5200

    Common Stock and Dividend Information The Hartford’s common stock is traded on the New York Stock Exchange (NYSE) under the trading symbol “HIG.” The following table presents the high and low closing prices for the common stock of The Hartford on the NYSE for the periods indicated, and the quarterly dividends declared per share.

    Common Stock Price Dividends High Low Declared


    First quarter $ 68.56 $ 59.93 $ 0.26

    Second quarter 69.97 58.04 0.26

    Third quarter 58.63 41.00 0.26

    Fourth quarter 50.10 37.38 0.27


    First quarter $ 67.75 $ 55.15 $ 0.25

    Second quarter 70.46 56.88 0.25

    Third quarter 69.28 50.10 0.25

    Fourth quarter 62.83 53.91 0.26

    As of February 19, 2003 there were approximately 115,000 shareholders of The Hartford.

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    Cover Final BP3 4/3/2006 10:36 AM Page 2

  • Always thinking ahead 1

    A punishing business environment on top of the third year of a bear market made 2002 another tough year. We were forced to

    grapple with a “perfect storm” scenario that combined investment

    losses, a challenging credit environment, aggressive asbestos litiga-

    tion and the continuing risk of terrorism. Some of our shareholders

    and customers—who were also punished by this economy—might

    be wondering what we’re doing to combat these issues and pre-

    serve their assets over the long term. They’re asking where their

    investments can earn the best return while minimizing their expo-

    sure to the stock market’s vagaries.

    Those are fair questions. This annual report answers them.

    We withstood the turbulence of 2002 much better than most

    in our industry, just as we’ve done for nearly two centuries. The

    strength of our property-casualty business mitigated the investment

    losses that affected our entire industry. Our tighter underwriting

    standards and higher pricing generated superior margins to com-

    pensate for low credit-market yields. We intensified our efforts to

    bring about a legislative solution to the problem of costly asbestos

    claims. And while we were extremely pleased with the terrorism

    backstop legislation passed by Congress last year, our work in that

    area is not finished. We continue to manage our risk and think ahead

    to ensure we are adequately protected from terrorism exposure in

    the future.

    Dear Fellow Shareholders,

  • 2 The Hartford 2002

    As difficult as 2002 was, we have positive things to look back on—like record annuity sales—and plenty to be optimistic about. I attribute our resilience to several factors, which this report describes in detail. They include a balanced and diversified portfolio of businesses, the high quality of our distribution partners, and our practice of always thinking ahead. At the core of our company are the integrity and customer focus of 29,000 employees who deliver The Hartford Experience every day. They respond quickly to customers’ needs, make it easy for distributors to do business with us, and provide extraordinary service.

    In spite of the difficulties in 2002, we have a consistently strong record since we went public in 1995. We’ve averaged 8.7 percent annual growth in net income, while operating income has averaged 14.7 percent annual growth. We’ve met or exceeded earnings estimates for 26 of the past 28 quarters. Assets under management, which we define as total assets plus mutual fund assets and third-party assets managed by Hartford Investment Management Company, have grown 11 percent on an annualized basis.

    Our diversified business platform, perhaps more than anything else, helped us weather economic uncertainty and increasingly complex risks last year. Our property- casualty results were robust, thanks to varied products and a world-class distribution network. Favorable pricing, a flight to quality, and continued strong ratings put our company head and shoulders above weaker competitors in our industry. Our excellent property-casualty results helped offset the equity market decline, which made 2002 a very difficult year for our life operations.

    Our enterprise agency strategy, which you’ll learn more about in this report, is deepening our relationships with distribution partners to capture a bigger share of their most profitable business. The strategy enables those partners to come to one company for business and personal insurance and for advice on how to package products for each customer.

    The Hartford’s overall revenues in 2002 rose 5 percent to $15.9 billion. Net income was $1.0 billion, or $3.97 per diluted share, an 89 percent increase on a per-share basis. Net income for 2002 includes $250 million of net realized capital losses, a


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