VALUATION HIGHLIGHTS

1. Property And Casualty (Commercial P&C, Consumer Property And Casualty, Property & Casualty Investment Income) constitutes 81% of the Trefis price estimate for Hartford Financial's stock.
2. Group Life Insurance (Group Life Insurance Premiums, Group Life Investment Income) constitutes 15% of the Trefis price estimate for Hartford Financial's stock.

WHAT HAS CHANGED?

Latest Earnings: Q4 and Full Year 2025

The Hartford Financial Services Group reported full-year 2025 revenue of $28.37 billion, a 15.6% increase compared to $24.53 billion in 2024. Net income for the year reached $3.83 billion, up 22.8% year-over-year, while core earnings per diluted share (EPS) for 2025 was $11.38, compared to $8.88 in 2024. Primary drivers included strong underwriting performance in Business Insurance, which saw a 10% increase in core earnings, and higher net investment income driven by reinvestment at superior interest rates.

Note: Hartford Financial's FY'25 ended on December 31, 2025.

Aggressive AI and Technology Integration Hub

In early 2026, The Hartford accelerated its technology pivot by opening a new Digital and AI Center of Excellence designed to streamline underwriting for small businesses. This strategic shift aims to move 75% of the company's core applications to the cloud by 2027 to enhance speed-to-market for new products. Additionally, the company integrated Centro's API-driven quoting system in February 2026 to improve broker connectivity and quote turnaround times in the Group Benefits segment.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of Hartford Financial's value that present opportunities for upside or downside to the current Trefis price estimate:

Commercial Lines

• Premium Growth Momentum: Business Insurance premiums grew 10% in late 2025, supported by high retention and a 9% increase in small business sales. Current metrics show a core earnings return on equity (ROE) of 19.4%, which exceeds the long-term Trefis baseline. If the company maintains renewal price increases above loss cost trends through 2026, there is significant upside to current valuation estimates.
• Underwriting Margin Discipline: The Commercial Lines segment achieved a stellar combined ratio of 87.8 in 2025. While "social inflation" in liability lines poses a potential downside risk, the company's data-driven pricing models have so far managed to offset these legal cost pressures.

For additional details, select a division from the interactive Trefis split for Hartford Financial at the top of the page.

BUSINESS SUMMARY

Hartford Financial is a leading insurance and financial services provider, operating primarily through segments including Commercial Lines, Personal Lines, and Group Benefits, with a strong focus on property and casualty underwriting for small and mid-sized enterprises.

SOURCES OF VALUE

The Commercial Lines segment is the most valuable part of the business due to its specialized underwriting expertise and dominant market share in small business insurance.

Small Business Market Dominance

The Hartford is a top-tier provider of workers' compensation and small-business package policies, benefiting from an extensive agent network and a proprietary underwriting platform that creates a high-moat ecosystem. This segment consistently delivers the company's highest ROE and accounts for over 50% of total core earnings.

Group Benefits Scalability

As a leading provider of life and disability insurance through employers, The Hartford leverages its massive scale to maintain competitive pricing while investing in automated claims technology. In early 2026, sales in this segment were trending nearly 50% higher than prior-year levels due to expanded digital distribution.

Optimized Investment Portfolio

The company maintains a high-quality fixed income portfolio of approximately $55 billion, which serves as a steady engine for capital generation. By reinvesting at yields significantly higher than its maturing assets, Hartford has expanded its net interest margin, providing a buffer against potential CAT loss volatility.

KEY TRENDS

Interest Rate Tailwinds

The "higher-for-longer" interest rate environment in early 2026 continues to boost The Hartford's net investment income, which rose 17% in late 2025. New money yields on maturing bonds remain above 4%, significantly higher than the average yield of the existing portfolio.

Accelerated Capital Returns

The company remains aggressively focused on returning capital to shareholders, executing $1.6 billion in share buybacks during 2025. In February 2026, management reiterated its intent to maintain a robust repurchase program, supported by strong organic capital generation and redundant regulatory capital.

Personal Auto Recovery

After years of high loss costs, the Personal Lines segment has returned to target profitability as double-digit rate increases finally caught up with vehicle repair inflation. The rollout of the "Prevail" platform in early 2026 is expected to modernize its direct-to-consumer digital experience, improving customer acquisition costs.