Steven Wevodau - Property & Casualty Insurance

HARTFORD, Conn.–(BUSINESS WIRE)–While large-scale data security breaches are those that make news, a breach of any size can be costly for software developers, hardware firms, and other technology companies that have non-public personal information in their control. Data breach laws in many states require notification and credit monitoring services for those affected, the costs for which are incurred by the company responsible for the breach. With the average per-record cost of a data breach at $202, according to a 2008 Ponemon Institute study, the cost of a breach involving just 500 records could exceed $100,000.To address this exposure for technology firms, The Hartford Financial Services Group, Inc., (NYSE: HIG - News) one of the nation’s largest financial services companies, has added First Party Data Privacy Expense coverage, along with Cyber Extortion Expense coverage, to its FailSafe® suite of technology liability coverages. These new coverages are offered as an endorsement to the FailSafe GIGA® and FailSafe TERA® policies.

“Many technology companies are at risk for improper dissemination of non-public personal information or violation of data privacy laws. This endorsement is designed to address direct costs that would not be covered by third party technology professional liability coverage,” said David J. Selembo, assistant vice president of professional liability, underwriting & operations for The Hartford’s Technology Practice Group, which provides insurance coverage tailored to the risks of technology firms.

The Hartford’s Data Privacy Expense coverage pays for actual expenses incurred as a result of a policyholder’s negligent acts, errors or omissions that result in the improper dissemination of non-public personal information, or a breach or violation of data privacy laws. Specific components of the coverage may include:

1. Notification expenses incurred to comply with notification laws.

2. Crisis management expenses incurred for fees and costs associated with hiring a crisis management firm to perform services that minimize potential harm and maintain or restore confidence in the policyholder.

3. Data privacy regulatory and credit monitoring expenses incurred in connection with a statutory mandate requiring credit monitoring for third parties in compliance with data privacy laws, legal expenses in defense of a data privacy regulation proceeding, and certain fines or penalties, where insurable, in connection with a data privacy regulation proceeding.

4. Cyber investigation expenses incurred to have a third party investigate the policyholder’s computer system to determine the source of a data privacy breach.

The Hartford’s Cyber Extortion Expense coverage addresses expenses incurred by a policyholder in the event of an extortion threat to cause an actual interruption, suspension, or failure of the company’s computer system, including the failure to prevent unauthorized access or unauthorized use of the computer system.

To learn more about The Hartford’s FailSafe suite of customized solutions for the technology industry, agents and brokers should contact david.selembo@thehartford.com, their local Hartford sales representative, or a Technology Practice Group underwriter.

About The Hartford

The Hartford is one of the nation’s largest financial services companies and a leading provider of investment products, life insurance and group benefits; automobile and homeowners products; and business property and casualty insurance. International operations are located in Japan, the United Kingdom, Canada, Brazil and Ireland. The Hartford’s Internet address is www.thehartford.com.

HIG-PC

Some of the statements in this release may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ. These important risks and uncertainties include those discussed in our Quarterly Reports on Form 10-Q, our 2008 Annual Report on Form 10-K and the other filings we make with the Securities and Exchange Commission. We assume no obligation to update this release, which speaks as of the date issued.

The description herein is a summary only, is intended for informational purposes only and should not be relied upon. It does not include all terms, conditions and exclusions of the policies described. Please refer to the actual policies for complete details of coverage and exclusions. Coverage is provided by The Hartford companies and may not be available in all states.

 

The Hartford Financial Services Group, Inc.
Pamela Rekow, 860-547-8990
Pamela.rekow@thehartford.com
or
Thomas Hambrick, 860-547-9746
Thomas.hambrick@thehartford.com

OLDWICK, N.J.–(BUSINESS WIRE)–A.M. Best Co. has removed from under review with negative implications and affirmed the financial strength ratings of A+ (Superior) and issuer credit ratings (ICR) of “aa-” of the key life/health (Hartford Life) and property/casualty (Hartford Insurance Pool) insurance subsidiaries of The Hartford Financial Services Group, Inc. (The Hartford) (Hartford, CT) (NYSE: HIG - News). Concurrently, A.M. Best has removed from under review with negative implications and downgraded the ICR to “a-” from “a” and senior debt ratings to “a-” from “a” of The Hartford and Hartford Life, Inc. The outlook assigned to these ratings is negative. (Please see link below for a detailed listing of the companies and ratings.)The companies were placed under review on October 6, 2008, following The Hartford’s announcement that it has entered into a binding agreement with Allianz Societes Europaea (Germany) to provide a $2.5 billion capital investment, following significant realized and unrealized investment losses and other charges incurred through third quarter 2008.

The rating actions for The Hartford reflect the removal of extraordinary notching due to the deterioration in earnings generation and diversification as well as financial leverage and coverage ratios to a level that is not considered unusually strong relative to A.M. Best’s expectations for The Hartford’s rating level. The deterioration was driven by the significant investment losses experienced across the enterprise during third quarter 2008, although weighted much heavier towards the life/health operations. As a result, The Hartford reported a significant decline in GAAP equity through third quarter 2008. However, the ratings acknowledge The Hartford’s fair amount of cash and marketable securities at the holding company, access to a $500 million contingent capital facility and $1.9 billion revolving credit facility, not including any potential funds received from its recently announced application to participate in the U.S. Treasury Department’s Capital Purchase Program.

Hartford Life’s ratings reflect that its risk-based capital position has been replenished by a significant capital contribution from The Hartford, following significant year-to-date statutory losses driven largely by asset impairments, and to a lesser extent, net operating losses. The ratings also recognize Hartford Life’s significant market position in several life insurance and retirement savings businesses (most notably variable annuities), its diversified sources of revenues and earnings and its broad multi-channel distribution platform.

The negative outlook assigned to Hartford Life’s ratings is a reflection of its significant unrealized loss positions maintained across a variety of asset classes such as ABS, CMBS, residential subprime mortgages and corporate fixed income securities. A.M. Best recognizes that Hartford Life continues to aggressively monitor its investment exposures and has stress-tested them utilizing a variety of economic scenarios. However, while much of Hartford Life’s unrealized losses are more a function of spread widening rather than credit deterioration, the potential exists for additional asset impairments. Additionally, the company’s earnings remain heavily correlated to the equity markets—particularly within its retail variable annuity businesses—which indicates the potential for further earnings decline.

Hartford Insurance Pool’s ratings recognize its solid risk-adjusted capitalization, strong underwriting fundamentals, continued core operating profitability and excellent business position within the property/casualty industry.

These strengths are somewhat offset by the significant realized capital losses reported during third quarter 2008, dividends taken out of the property/casualty companies to support the life/health operations and continued softening throughout most commercial lines, driving low single-digit premium decreases and modest pressure on underwriting margins. Despite increasing competitive pressures, A.M. Best expects the Hartford Insurance Pool to maintain a sound underwriting performance and pre-tax operating earnings over the near term. Nevertheless, the negative outlook acknowledges A.M. Best’s concerns that continued uncertainties surrounding Hartford Life could lead to further strains throughout the enterprise should the capital markets remain volatile or decline further.

A.M. Best also has assigned a debt rating of “bbb” to The Hartford’s $1,750 million fixed-to-floating rate junior subordinated debentures with a negative outlook. The assigned debt rating reflects the debentures’ subordinated status in right of payment to all existing and future indebtedness of The Hartford, the replacement capital covenant and a 10-year optional interest deferral feature.

For a complete listing of The Hartford Financial Services Group, Inc.’s FSRs, ICRs and debt ratings, please visit www.ambest.com/press/122309hartford.pdf.

Founded in 1899, A.M. Best Company is a global full-service credit rating organization dedicated to serving the financial and health care service industries, including insurance companies, banks, hospitals and health care system providers. For more information, visit www.ambest.com.

 

A.M. Best Co.
Analysts:
Sharon Pereira—P/C, 908-439-2200, ext. 5520
sharon.pereira@ambest.com
or
Thomas Rosendale—L/H, 908-439-2200, ext. 5201
thomas.rosendale@ambest.com
or
Public Relations:
Jim Peavy, 908-439-2200, ext. 5644
james.peavy@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
rachelle.morrow@ambest.com

SIMSBURY, Conn.–(BUSINESS WIRE)–Continuing its long-term commitment of promoting and supporting the abilities of individuals with physical disabilities, The Hartford Financial Services Group, Inc. (NYSE: HIG - News) announced today it is extending its sponsorship of U.S. Paralympics, the division of the U.S. Olympic Committee (USOC) dedicated to recruiting and training elite athletes with physical disabilities.The Hartford’s ground-breaking alliance with U.S. Paralympics, which began five years ago, now extends through the 2012 Paralympic Games in London. In 2003, The Hartford became the first company to forge a multi-year agreement exclusively with the Paralympics, resulting in the most significant corporate commitment to the Paralympics in U.S. history.

“Our partnership with U.S. Paralympics in 2003 established The Hartford as a true ‘Ability’ company, and the first – and only – disability carrier to pledge support to U.S. Paralympics and its 800 athletes,” said Ron Gendreau, executive vice president of The Hartford’s Group Benefits Division. “We are proud to continue our strong partnership and together continue to change people’s lives.”

“The Hartford has been a consistent leader in the Paralympic and disability movement,” said Charlie Huebner, chief of Paralympics, USOC. “The company’s continued support reinforces its commitment to assist future generations of Paralympic athletes in pursuing their dreams, while also ensuring persons with physical disabilities have enhanced opportunities to achieve success in life.”

The partnership between the elite athletic organization and the leading U.S. group disability insurance seller is a natural fit. “U.S. Paralympic athletes embody our Ability Philosophy – our conviction that success is possible by focusing on abilities instead of physical limitations,” Gendreau said. “As active, productive members of society and the U.S. workforce, they are powerful, positive role models for our disability claimants.”

“We’re so pleased to renew our strong involvement with such a worthy cause,” said Connie Weaver, senior vice president and chief marketing officer of The Hartford. “Closely tying our corporate citizenship goals and philanthropy activities with our business initiatives is an important strategy for our organization. The Hartford is proud to be involved with a number of causes that align with our business, including our support of the Wounded Warrior Project and Casting for Recovery.”

Swimmer Erin Popovich, who won four gold and two silver medals at the Beijing 2008 Paralympic Games, said The Hartford’s support helps make athletes’ dreams a reality. “This sponsorship provides me with coaching, competition opportunities, and the ability to focus my energies on being the best I can be,” she said. “Plus I’m proud to work with a company that helps people every day get back to work after a disability.”

As part of the partnership, The Hartford sponsors and organizes more than 200 events featuring U.S. Paralympic athletes throughout the United States annually. A majority of these events are educational programs to promote awareness among Americans – particularly within the business community – about the value that employees with disabilities bring to the workplace.

The Hartford also hosts Paralympic Experiences, where able-bodied business professionals use adaptive equipment and compete against each other in Paralympic sports, such as wheelchair basketball. By getting into the game with Paralympic athletes, these professionals can better appreciate what it is like to live with a disability.

“Time and again when Paralympic athletes have interacted with our business partners, the Paralympians have positively impacted the way they think of people with disabilities,” Gendreau said.

The Hartford’s long history of support for the Paralympic community includes more than 15 years of sponsoring programs, organizations and world-class athletes with physical disabilities.

“Through these events, thousands of men, women and children have learned new skills, regained their confidence, and taken important steps on the road to recovery,” Gendreau said. “We are happy that we can make a real difference in the lives of people facing disabilities.”

The Paralympic Games are the Olympic equivalent for athletes with physical disabilities and take place two weeks following the Olympic Games in the same host city and athletic venues. More than 4,000 athletes competed in the Beijing 2008 Paralympic Games. For more information on U.S. Paralympics, visit www.usparalympics.org.

About The Hartford

The Hartford, a Fortune 100 company, is one of the nation’s largest diversified financial services companies, with 2007 revenues of $25.9 billion. The Hartford is a leading provider of investment products, life insurance and group benefits; automobile and homeowners products; and business property and casualty insurance. International operations are located in Japan, the United Kingdom, Canada, Brazil and Ireland. The Hartford’s Internet address is www.thehartford.com.

HIG-L

Some of the statements in this release may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ. These important risks and uncertainties include those discussed in our Quarterly Reports on Form 10-Q, our 2007 Annual Report on Form 10-K and the other filings we make with the Securities and Exchange Commission. We assume no obligation to update this release, which speaks as of the date issued.

 

The Hartford
Kelly J. Carter, 860-843-9420
Kelly.carter@hartfordlife.com
or
David Potter, 860-843-8993
david.potter1@hartfordlife.com