The Hartford Financial Services Group.doc

The Hartford Financial Services Group

The Hartford Financial Services GroupI.Introduction

Founded in 1810, The Hartford Financial Services Group, Inc (NYSE: HIG)is one of the largest investment and insurance companies based in the UnitedStates, with offices in Japan, Brazil, Ireland, England, and the United States.With nearly 30,000 employees and $2.3 billion in income in 2005, TheHartford was ranked 78th on the 2006 Fortune 100 list.

The Hartford is a leading provider of investment products – annuities, mutualfunds, college savings plans – as well as life insurance, group and employeebenefits, automobile and homeowners' insurance, and business insurance.The Hartford serves millions of customers worldwide – including individuals,institutions, and businesses – through independent agents and brokers,financial institutions, and online About 11,000 independent agencies andmore than 100,000 registered broker/dealers sell The Hartford's trustedproducts.

After nearly 200 years in business, The Hartford is known for its financialstrength and stability, superior customer service, and continued operationalexcellence.

The Hartford Financial Services Group recognizes the clear consensus withinthe scientific community that climate change is of real and increasingconcern As an insurer, investor, employer, property owner and responsiblecorporate citizen, The Hartford is committed to understanding, managing andmitigating the risks associated with global climate change.

In July 2007, The Hartford convened a standing committee on climatechange, composed of executives with a wide range of responsibilities andperspectives, including enterprise risk management, applied research &

product development, actuarial and underwriting, corporate finance,workplace restheirces, law and government affairs The committee has beentasked by Senior Management with examining the risks and opportunitiespresented by climate change, assessing The Hartford's current approach toclimate change, and assisting in the development of climate change-relatedstrategies going forward.

The following discussion examines The Hartford's current views concerningthe science of climate change, public policy and legislation, the effect climatechange may have on their company and steps The Hartford is taking inresponse to climate change This statement, in conjunction with TheHartford's recent submission to the Carbon Disclosure Project, represents anearly but important step in The Hartford's efforts to address the growingchallenge of global climate change.

They create superior shareholder value through profitable growth andresponsible risk management.

As additional information is developed pointing to increased frequency andseverity of weather-related catastrophes, we expect to see more publicpolicy attention paid to such risk mitigation techniques as better land useplanning, improved building codes and more rigid enforcement combinedwith eliminating subsidies and other incentives that promote developmentin areas most exposed to natural disasters The Hartford sees an

opportunity in establishing itself as a recognized leader in the assessmentand management of climate change-related risks.

As a variety of sectors seek to respond to the challenges and opportunitiesof climate change - for example, through the generation of renewableenergy or through the provision of climate-related risk mitigation services -The Hartford may also benefit from these investment opportunities.

Finally, The Hartford sees opportunity in establishing itself as an employerand insurer of choice by demonstrating its commitment to responsible energyuse and management and GHG reduction The Hartford values its reputationas a responsible corporate citizen and will strive to preserve and enhance thatreputation in the area of environmental stewardship.

IV Strategy

Although The Hartford is not a significant direct emitter of greenhouse gases[GHGs], The Hartford recognizes that the reduction of GHG emissions mustbe the responsibility of all global citizens, individual and corporate TheHartford takes that responsibility seriously, and the reduction of GHGemissions is an objective for The Hartford's operations management team.The Hartford believes that responsible and innovative approaches to energyefficiency will help to reduce operational costs over the long term and - mostimportantly - establish The Hartford as an insurer and employer of choice.Current and existing efforts to promote energy efficiency include thefollowing:

The Hartford is presently participating in the EPA Energy Starprogram, designed to help reduce energy usage in commercial and residentialbuildings The Hartford's "Building 100" in Southington, CT, is one of sevenEnergy Star Office Buildings in Connecticut.

The Hartford is taking into account LEED energy efficiency standardsin the construction of a new office building located in Windsor, CT TheWindsor building will incorporate "daylight harvesting" systems, highefficiency HVAC, insulated glass, minimization of water usage, as well asefficient layout and gradation.

The Hartford is an EPA Climate Leader.

Taking the benchmark developed for the CDP (Carbon Disclosure Project) asa starting point, The Hartford is working to develop a strategic plan forongoing GHG reduction The Hartford has engaged an outside consultant toassist with the ongoing efforts to increase energy efficiency in all Hartfordbuildings and operations, and as part of its participation in the EPA's ClimateLeaders program, The Hartford is considering the adoption of a 5- to 10-yeargoal for GHG reduction

In addition to managing its own GHG emissions, which are relatively small asindicated above, The Hartford further recognizes the role that all publiccompanies may play as advocates for sound and responsible public policy.The Hartford has acted as a public advocate through its membership in theAmerican Insurance Association (AIA)

Through AIA, we advocate for risk-based pricing, growth management andclimate adaptation We believe that the insurance mechanism can play a vitalrole in making informed land use decisions if the mechanism is allowed tofunction Proper pricing will send appropriate risk signals to the mostvulnerable areas Beyond pricing, we work with AIA to advocate for land useplanning and building codes that reflect risk exposure Through AIA wecontinue to press for increased use of public transport and other non-motorvehicle transportation that will play a role in reducing greenhouse gasemissions.

V Plan

Throughout its nearly 200 year history, The Hartford has successfullysupported critical business activities during earthquakes, fires, hurricanes andother natural and man-made disasters The company believes that effectiveplanning is key to reducing the effect of any disaster and we dedicatesignificant restheirces to business continuity planning and testing.

The Hartford has business continuity plans for all of its businesses As part ofthese plans, the following tactics will support the safety of their employeesand the continuation of their business in the event of a disruption:

An emergency communication plan that ensures that their customers,business partners, and employees receive emergency information andinstructions via a variety of stheirces, including toll-free phone numbers,websites, and external media, if necessary.

The identification and training of critical business and technologyteams to manage the continuity and recovery processes across the company.

Technology and systems design that support the recovery processes forcritical business functions.

Redundant processing capacity and the potential to relocate businesssupport to designated recovery locations.

As a premier insurance and financial services company, The Hartford takes itscommitment to its stakeholders very seriously and participates in industry-level discussions regarding business continuity planning under the auspices ofindustry organizations Participation in these forums increases their ability torecognize and manage business disruption risks and coordinate recoveryefforts across the financial services industry.

Although we have taken significant steps to develop and implement soundbusiness recovery plans, we cannot guarantee that systems will always be

available or recoverable after a disaster or significant business disruption.However, we believe that their planning for such events is robust andconsistent with the best practices established within the industry.

VI Tactics

1.Career Development Philosophy:

Employees, with the support of management and the organization, willdevelop, maintain and enhance skills and competencies in alignment withstrategic business plans, in order to provide for both the individual's and thecompany's success.

At The Hartford, we understand that the success of their company depends ontheir people We are committed to career development and continuouslearning in order to help their employees grow both professionally andpersonally.

We enctheirage, and expect, their employees to take charge of their careers byutilizing the many development tools and opportunities including:

Degree Development Program: tuition reimbursement for collegedegrees and job-related ctheirsework

Professional Designation Program: reimbursement, bonuses, on-sitetesting, and study groups for achieving professional designations

Customizable web-based training and eLearning programsLeadership Development Programs

Corporate University: various instructor-led, distance learning,application training and on-line offerings

Training on core competencies such as communications skills and timemanagement

Workshops, classes and individual counseling to help employees planand develop their career

Training on core competencies such as communications skills and timemanagement

Workshops, classes and individual counseling to help employees planand develop their career

Microsoft office product training in the classroom and desktop tutorialsA lending library of books, videos and audio tapes on careerdevelopment, core competency and leadership development topics

Access to internal job postings

2 The Hartford Employment

The Hartford uses the non-GAAP financial measure core earnings as animportant measure of the company's operating performance The Hartfordbelieves that the measure core earnings provides investors with a valuablemeasure of the performance of the Company's ongoing businesses because itreveals trends in their insurance and financial services businesses that may beobscured by the net effect of certain realized capital gains and losses Somerealized capital gains and losses are primarily driven by investment decisionsand external economic developments, the nature and timing of which areunrelated to the insurance and underwriting aspects of their business

Accordingly, core earnings excludes the effect of all realized gains and losses(net of tax and the effects of deferred policy acquisition costs) that tend to behighly variable from period to period based on capital market conditions TheHartford believes, however, that some realized capital gains and losses areintegrally related to their insurance operations, so core earnings includes netrealized gains and losses such as net periodic settlements on credit derivativesand net periodic settlements on the Japan fixed annuity cross-currency swap.These net realized gains and losses are directly related to an offsetting itemincluded in the income statement such as net investment income Core

earnings is also used by management to assess their operating performanceand is one of the measures considered in determining incentive compensationfor their managers Net income is the most directly comparable GAAPmeasure Core earnings should not be considered as a substitute for netincome and does not reflect the overall profitability of their business.Therefore, The Hartford believes that it is useful for investors to evaluate bothnet income and core earnings when reviewing the company's performance.

VII Do

1 Producer Compensation

The Hartford sells its traditional insurance products and services throughinsurance agents and brokers, commonly referred to as "producers." Theseproducers are generally not their employees Producers also include firms thatthey engage to sell their traditional insurance products, such as broker/dealers.The Hartford compensates producers for the sale and service of its products.A producer may receive one or more of the below payments, depending onthe producer's business relationship with them Compensation arrangementspertaining to their variable insurance and non-insurance products are moreparticularly described in their prospectuses.

Base Commission Producers are generally paid a base commission for the

sale and service of new and renewal policies placed with them The basecommission is usually a fixed percentage of the policy premium Thepercentage may vary depending on certain factors such as the type of product,risk classification, producer size, state where the risk is located or servicesprovided to the policyholder.

Contingent Commission Certain producers may participate in contingent

commission programs we offer Eligibility for, and the amount of, contingentcommission depends upon a producer's ability to meet certain production,

growth, profitability or other quality and performance objectives establishedby them Contingent commission is not offered for all products and lines ofbusiness For example, contingent commission is not offered in their terminal/maturity funding group annuity line of business.

Other Payments, Benefits and Compensation Certain producers may

receive other payments, benefits and compensation from them, which mayalso depend on the producer meeting production and other performanceobjectives established by them These other payments, benefits andcompensation may include:

Individual Producer Incentive Awards

They may provide individual producers and licensed customer servicerepresentatives employed by an agency with incentives for placing businesswith them These incentives may be in the form of cash or non-cash awardsbased on the number of policies written or other performance objectivesestablished by them Awards of this type are not available for all products andlines of business For example, these individual producer awards are not madein connection with the sale of variable products.

Marketing and Other Support

They may pay for or subsidize a producer's marketing efforts and otherbusiness goals These payments may include, but are not limited to, itemssuch as continuing education, training expenses, lead generation services,advertising assistance, sales and business meetings or other services that helpthe producer promote them and their products.

Other Benefits

They may provide certain producers with other benefits, including, but notlimited to, entertainment, tickets to sporting events, travel, gifts, branded