The Harford Financial Services Group, Inc. - Insurance -  Category Directory

(860) 547-5000

HARTFORD PLAZA

HARTFORD, CT 06115
www.thehartfordgroup.com

Sales

$18.7 billion

Business Description
The Hartford Financial Services Group, Inc. (together with its subsidiaries,
"The Hartford" or the "Company") is a diversified insurance and financial
services company. The Hartford, headquartered in Connecticut, is among the
largest providers of investment products, individual life, group life and group
disability insurance products, and property and casualty insurance products in
the United States. Hartford Fire Insurance Company, founded in 1810, is the
oldest of The Hartford's subsidiaries. The Hartford writes insurance and
reinsurance in the United States and internationally. At December 31, 2003,
total assets and total stockholders' equity of The Hartford were $225.9 billion
and $11.6 billion, respectively.
 

REPORTING SEGMENTS

The Hartford is organized into two major operations: Life and Property &
Casualty. Within these operations, The Hartford conducts business principally in
nine operating segments. Additionally, Corporate includes certain interest
expense, capital raising and purchase accounting adjustment activities, as well
as capital raised that has not been contributed to the Company's insurance
subsidiaries.

Life is organized into four reportable operating segments: Investment Products,
Individual Life, Group Benefits and Corporate Owned Life Insurance ("COLI"). The
Company also includes in "Other" corporate items not directly allocable to any
of its reportable operating segments, principally interest expense as well as
its international operations, which are primarily located in Japan and Brazil,
realized capital gains and losses and intersegment eliminations.

Property & Casualty is organized into five reportable operating segments: the
North American underwriting segments of Business Insurance, Personal Lines,
Specialty Commercial and Reinsurance; and the Other Operations segment, which
includes substantially all of the Company's asbestos and environmental
exposures. "North American" includes the combined underwriting results of the
Business Insurance, Personal Lines, Specialty Commercial and Reinsurance
underwriting segments. Property & Casualty also includes income and expense
items not directly allocated to these segments, such as net investment income,
net realized capital gains and losses, other expenses including interest,
severance and income taxes.

The following is a description of Life and Property & Casualty along with each
of their segments, including a discussion of principal products, marketing and
distribution and competitive environments. Additional information on The
Hartford's reporting segments may be found in the MD&A and Note 17 of Notes to
Consolidated Financial Statements.

LIFE

Life's business is conducted by the subsidiaries of Hartford Life, Inc. ("HLI"),
a leading financial services and insurance organization. Through Life, The
Hartford provides (i) investment products, including variable annuities, fixed
market value adjusted ("MVA") annuities, mutual funds and retirement plan
services for the savings and retirement needs of over 1.5
million customers, (ii) life insurance for wealth protection, accumulation and
transfer needs for approximately 735,000 customers, (iii) group benefits
products such as group life and group disability insurance for the benefit of
millions of individuals and (iv) corporate owned life insurance, which includes
life insurance policies purchased by a company on the lives of its employees.
The Company is one of the largest sellers of individual variable annuities,
variable universal life insurance and group disability insurance in the United
States. The Company's strong position in each of its core businesses provides an
opportunity to increase the sale of The Hartford's products and services as
individuals increasingly save and plan for retirement, protect themselves and
their families against the financial uncertainties associated with disability or
death and engage in estate planning. In an effort to advance the Company's
strategy of growing its businesses, The Hartford acquired the group life and
accident, and short-term and long-term disability businesses of CNA Financial
Corporation on December 31, 2003, and the individual life insurance, annuity and
mutual fund businesses of Fortis on April 2, 2001. For additional information,
see the Capital Resources and Liquidity section of the MD&A and Note 18 of Notes
to Consolidated Financial Statements. In addition, The Hartford's Japanese
operation achieved $3.7 billion, $1.4 billion and $462 in variable annuity sales
for the years ended December 31, 2003, 2002 and 2001, respectively. The growth
in sales was the primary reason for the increased account values related to
Japan, which grew to more than $6.2 billion as of December 31, 2003 up from $1.7
billion as of December 31, 2002.

HLI is among the largest consolidated life insurance groups in the United States
based on statutory assets as of December 31, 2003. In the past year, Life's
total assets under management, which include $22.5 billion of third-party assets
invested in the Company's mutual funds and 529 College Savings Plans, increased
27% to $210.1 billion at December 31, 2003 from $165.1 billion at December 31,
2002. Life generated revenues of $8.1 billion, $6.9 billion and $7.4 billion in
2003, 2002 and 2001, respectively. Additionally, Life generated net income of
$769, $557 and $685 in 2003, 2002 and 2001, respectively.

GROUP BENEFITS

The Group Benefits segment sells group life and group disability insurance, as
well as other products, including medical stop loss, accidental death and
dismemberment, travel accident and other special risk coverage to employers and
associations. The Company also offers disability underwriting, administration,
claims processing services and reinsurance to other insurers and self-funded
employer plans. Generally, policies sold in this segment are term insurance.
This allows the Company to adjust the rates or terms of its policies in order to
minimize the adverse effect of various market trends, including declining
interest rates and other factors. Typically policies are sold with one, two or
three year rate guarantees depending upon the product. In the disability market,
the Company focuses on strong risk and claims management to derive a competitive
advantage. The Group Benefits segment generated revenues of $2.6 billion for the
years ended December 31, 2003 and 2002, and $2.5 billion for the year ended
December 31, 2001, of which group disability insurance accounted for $1.1
billion in each of the three years and group life insurance accounted for $935,
$887 and $763, respectively. The Company held group disability reserves of $4.0
billion and $2.5 billion and group life reserves of $1.2 billion and $765, as of
December 31, 2003 and 2002, respectively. Net income in the Group Benefits
segment was $148, $128 and $106 for the years ended December 31, 2003, 2002 and
2001, respectively.

As previously mentioned, Life acquired the group life and accident, and
short-term and long-term disability businesses of CNA Financial Corporation on
December 31, 2003. This acquisition will increase the scale of the Company's
group life and disability operations, expand the Company's distribution and
enhance the Company's capability to deliver outstanding products and services.

Principal Products

Group Disability -- Life is one of the largest participants in the "large case"
market of the group disability insurance business. The large case market, as
defined by the Company, generally consists of group disability policies covering
over 500 employees in a particular company. The Company is continuing its focus
on the "small case" and "medium case" group markets, emphasizing name
recognition and reputation as well as the Company's managed disability approach
to claims and administration. The Company's efforts in the group disability
market focus on early intervention, return-to-work programs and successful
rehabilitation. Over the last several years, the focus of new disability
products introduced is to provide incentives for employees to return to
independence. The Company also works with disability claimants to improve the
receipt rate of Social Security offsets (i.e., reducing payment of benefits by
the amount of Social Security payments received).

The Company's short-term disability benefit plans provide a weekly benefit
amount (typically 60% to 70% of the employee's earned income up to a specified
maximum benefit) to insured employees when they are unable to work due to an
accident or illness. Long-term disability insurance provides a monthly benefit
for those extended periods of time not covered by a short-term disability
benefit plan when insured employees are unable to work due to disability.
Employees may receive total or partial disability benefits. Most of these
policies begin providing benefits following a 90 or 180 day waiting period and
generally continue providing benefits until the employee reaches age 65.
Long-term disability benefits are paid monthly and are limited to a portion,
generally 50-70%, of the employee's earned income up to a specified maximum
benefit.

Group Life -- Group term life insurance provides term coverage to employees and
their dependents for a specified period and has no accumulation of cash values.
The Company offers options for its basic group life insurance coverage,
including portability of coverage and a living benefit option, whereby
terminally ill policyholders can receive death benefits prior to their deaths.
In addition, the Company offers premium waiver and accidental death and
dismemberment coverages to employee groups.

Other -- Life provides excess of loss medical coverage (known as stop loss
insurance) to employers who self-fund their medical plans and pay claims using
the services of a third party administrator. The Company also provides travel
accident, hospital indemnity and other coverages (including group life and
disability) primarily to individual membership of various associations, as well
as employee groups. A significant Medicare supplement customer of the company
had been the members of the Retired Officers Association, an organization
consisting of retired military officers. Congress passed legislation, effective
in the fourth quarter of 2001, whereby retired military officers age 65 and
older will receive full medical insurance, eliminating the need for Medicare
supplement insurance. This legislation reduced the Company's Medicare supplement
premium revenue to zero after 2001.

CORPORATE OWNED LIFE INSURANCE ("COLI")

Life is a leader in the COLI market, which includes life insurance policies
purchased by a company on the lives of its employees, with the company or a
trust sponsored by the company named as the beneficiary under the policy. Until the passage of Health
Insurance Portability and Accountability Act of 1996 ("HIPAA"), the Company sold
two principal types of COLI, leveraged and variable products. Leveraged COLI is
a fixed premium life insurance policy owned by a company or a trust sponsored by
a company. HIPAA phased out the deductibility of interest on policy loans under
leveraged COLI at the end of 1998, virtually eliminating all future sales of
leveraged COLI. Variable COLI continues to be a product used by employers to
fund non-qualified benefits or other post-employment benefit liabilities.

Variable COLI account values were $21.0 billion and $19.7 billion as of December
31, 2003 and 2002, respectively. Leveraged COLI account values decreased to $2.5
billion as of December 31, 2003 from $3.3 billion as of December 31, 2002,
primarily due to surrender activity. COLI generated revenues of $483, $592 and
$719 for the years ended December 31, 2003, 2002 and 2001, respectively and net
income (loss) of ($1), $32 and $37 for the years ended December 31, 2003, 2002
and 2001, respectively.
 

PROPERTY & CASUALTY

Property & Casualty provides (1) workers' compensation, property, automobile,
liability, umbrella, specialty casualty, marine, agricultural and bond coverages
to commercial accounts primarily throughout the United States; (2) professional
liability coverage and directors and officers liability coverage, as well as
excess and surplus lines business not normally written by standard commercial
lines insurers; (3) automobile, homeowners and home-based business coverage to
individuals throughout the United States; and (4) insurance related services.

The Hartford is the tenth largest property and casualty insurance operation in
the United States based on written premiums for the year ended December 31, 2002
according to A.M. Best Company, Inc. ("A.M. Best"). Property & Casualty
generated revenues of $10.7 billion, $9.5 billion and $8.6 billion in 2003, 2002
and 2001, respectively. Earned premiums for 2003, 2002 and 2001 were $8.8
billion, $8.1 billion and $7.3 billion, respectively. Additionally, net income
(loss) was $(811), $469 and $(115) for 2003, 2002 and 2001, respectively. The
net loss for 2003 and 2001 includes the after-tax effect of the asbestos charge
of $1,701 and $420 of after-tax losses related to the September 11 terrorist
attack ("September 11"), respectively. Total assets for Property & Casualty were
$37.2 billion and $31.1 billion as of December 31, 2003 and 2002, respectively.

BUSINESS INSURANCE

Business Insurance provides standard commercial insurance coverage to small and
middle market commercial businesses primarily throughout the United States. This
segment also provides commercial risk management products and services as well
as marine coverage. Earned premiums for 2003, 2002 and 2001 were $3.7 billion,
$3.1 billion and $2.6 billion (2001 includes $15 of reinsurance cessions related
to September 11), respectively. The segment had underwriting income (loss) of
$101, $44 and $(242) (2001includes $245 of underwriting loss related to
September 11) in 2003, 2002 and 2001, respectively.

Principal Products

The Business Insurance segment offers workers' compensation, property,
automobile, liability, umbrella and marine coverages. Commercial risk management
products and services are also provided.

SPECIALTY COMMERCIAL

Specialty Commercial provides a wide variety of property and casualty insurance
products and services through retailers and wholesalers to large commercial
clients and insureds requiring a variety of specialized coverages. Excess and
surplus lines coverages not normally written by standard line insurers are also
provided, primarily through wholesale brokers. Specialty Commercial had earned
premiums of $1.6 billion, $1.2 billion and $1.0 billion (2001 includes $7 of
reinsurance cessions related to September 11) in 2003, 2002 and 2001,
respectively. Underwriting losses were $29, $23 and $262 (2001 includes $167 of
underwriting loss related to September 11) in 2003, 2002 and 2001, respectively.

Principal Products

Specialty Commercial offers a variety of customized insurance products and risk
management services. Specialty Commercial provides standard commercial insurance
products including workers' compensation, automobile and liability coverages to
large-sized companies. Specialty Commercial also provides bond, professional
liability, specialty casualty and agricultural coverages, as well as core
property and excess and surplus lines coverages not normally written by standard
lines insurers. Alternative markets, within Specialty Commercial, provides
insurance products and services primarily to captive insurance companies, pools
and self-insurance groups. In addition, Specialty Commercial provides
third-party administrator services for claims administration, integrated
benefits, loss control and performance measurement through Specialty Risk
Services, a subsidiary of the Company.

INVESTMENT PRODUCTS

The Investment Products segment focuses, through the sale of individual variable
and fixed annuities, mutual funds, retirement plan services and other investment
products, on the savings and retirement needs of the growing number of
individuals who are preparing for retirement or who have already retired. This
segment's assets under management grew to $146.5 billion at December 31, 2003
from $110.2 billion at December 31, 2002. Investment Products generated revenues
of $3.8 billion, $3.1 billion and $3.3 billion in 2003, 2002 and 2001,
respectively, of which individual annuities accounted for $1.8 billion for 2003
and $1.5 billion for 2002 and 2001. Net income in the Investment Products
segment was $510, $432 and $463 in 2003, 2002 and 2001, respectively.

The Company sells both variable and fixed individual annuity products through a
wide distribution network of national and regional broker-dealer organizations,
banks and other financial institutions and independent financial advisors. The
Company is a market leader in the annuity industry with sales of $16.5 billion,
$11.6 billion and $10.0 billion in 2003, 2002 and 2001, respectively. The
Company was the largest seller of individual retail variable annuities in the
United States with sales of $15.7 billion, $10.3 billion and $9.0 billion in
2003, 2002 and 2001, respectively. In addition, the Company continues to be the
largest seller of individual retail variable annuities through banks in the
United States.

Principal Products

Individual Variable Annuities -- Life earns fees, based on policyholders'
account values, for managing variable annuity assets and maintaining
policyholder accounts. The Company uses specified portions of the periodic
deposits paid by a customer to purchase units in one or more mutual funds as
directed by the customer, who then assumes the investment performance risks and
rewards. As a result, variable annuities permit policyholders to choose
aggressive or conservative investment strategies, as they deem appropriate,
without affecting the composition and quality of assets in the Company's general
account. These products offer the policyholder a variety of equity and fixed
income options, as well as the ability to earn a guaranteed rate of interest in
the general account of the Company. The Company offers an enhanced guaranteed
rate of interest for a specified period of time (no longer than twelve months)
if the policyholder elects to dollar-cost average funds from the Company's
general account into one or more non-guaranteed separate accounts. Additionally,
the Investment Products segment sells variable annuity contracts that offer
various guaranteed death benefits. For certain guaranteed death benefits, The
Hartford pays the greater of (1) the account value at death; (2) the sum of all
premium payments less prior withdrawals; or (3) the maximum anniversary value of
the contract, plus any premium payments since the contract anniversary, minus
any withdrawals following the contract anniversary.

Policyholders may make deposits of varying amounts at regular or irregular
intervals and the value of these assets fluctuates in accordance with the
investment performance of the funds selected by the policyholder. To encourage
persistency, many of the Company's individual variable annuities are subject to
withdrawal restrictions and surrender charges. Surrender charges range up to 8%
of the contract's deposits less withdrawals, and reduce to zero on a sliding
scale, usually within seven years from the deposit date. Individual variable
annuity account values of $86.5 billion as of December 31, 2003, have grown from
$64.3 billion as of December 31, 2002, due to strong net cash flow, resulting
from high levels of sales, low levels of surrenders and equity market
appreciation. Approximately 90% and 88% of the individual variable annuity
account values were held in non-guaranteed separate accounts as of December 31,
2003 and 2002, respectively.

In August 2002, the Company introduced Principal First, a new guaranteed
withdrawal benefit rider which is sold in conjunction with the Company's
variable annuity contracts. The Principal First rider provides the policyholder
with a guaranteed remaining balance ("GRB") if the account value is reduced to
zero through a combination of market declines and withdrawals. The GRB is
generally equal to premiums less withdrawals. However, annual withdrawals that
exceed 7% of the premiums paid may reduce the GRB by an amount greater than the
withdrawals and may also impact the guaranteed annual withdrawal amount that
subsequently applies after the excess annual withdrawals occur. The policyholder
also has the option, after a specified time period, to reset the GRB to the
then-current account value, if greater.

The assets underlying the Company's variable annuities are managed both
internally and by independent money managers, while the Company provides all
policy administration services. The Company utilizes a select group of money
managers, such as Wellington Management Company, LLP ("Wellington"); Hartford
Investment Management Company ("Hartford Investment Management"), a wholly-owned
subsidiary of The Hartford; Putnam Financial Services, Inc. ("Putnam"); American
Funds; MFS Investment Management ("MFS"); Franklin Templeton Group; and AIM
Investments ("AIM"). All have an interest in the continued growth in sales of
the Company's products and enhance the marketability of the Company's annuities
and the strength of its product offerings. Hartford Leaders, which is a
multi-manager variable annuity that combines the product manufacturing,
wholesaling and service capabilities of the Company with the investment
management expertise of four of the nation's most successful investment
management organizations: American Funds, Franklin Templeton Group, AIM and MFS,
has emerged as the industry leader in terms of retail sales. In addition, the
Director variable annuity, which is managed in part by Wellington, ranks second
in the industry in terms of retail sales.

Fixed MVA Annuities -- Fixed MVA annuities are fixed rate annuity contracts
which guarantee a specific sum of money to be paid in the future, either as a
lump sum or as monthly income. In the event that a policyholder surrenders a
policy prior to the end of the guarantee period, the MVA feature increases or
decreases the cash surrender value of the annuity in respect of any interest
rate decreases or increases, respectively, thereby protecting the Company from
losses due to higher interest rates at the time of surrender. The amount of
payment will not fluctuate due to adverse changes in the Company's investment
return, mortality experience or expenses. The Company's primary fixed MVA
annuities have terms varying from one to ten years with an average term of
approximately four years. Account values of fixed MVA annuities were $11.2
billion and $10.6 billion as of December 31, 2003 and 2002, respectively.

Mutual Funds -- In September 1996, Life launched a family of retail mutual funds
for which the Company provides investment management and administrative
services. The fund family has grown significantly from 8 funds at inception to
the current offering of 34 funds, including the addition of the Hartford Equity Income Fund
introduced in 2003. The Company's funds are managed by Wellington and Hartford
Investment Management. The Company has entered into agreements with over 960
financial services firms to distribute these mutual funds.

The Company charges fees to the shareholders of the mutual funds, which are
recorded as revenue by the Company. Investors can purchase shares in the mutual
funds, all of which are registered with the Securities and Exchange Commission,
in accordance with the Investment Company Act of 1940. The mutual funds are
owned by the shareholders of those funds and not by the Company. As such, the
mutual fund assets and liabilities, as well as related investment returns, are
not reflected in the Company's consolidated financial statements. Total retail
mutual fund assets under management were $20.3 billion and $14.1 billion as of
December 31, 2003 and 2002, respectively.

Governmental -- The Company sells retirement plan products and services to
municipalities under Section 457 plans. The Company offers a number of different
investment products, including variable annuities and fixed products, to the
employees in Section 457 plans. Generally, with the variable products, Hartford
Investment Management manages the fixed income funds and certain other outside
money managers act as advisors to the equity funds offered in Section 457 plans
administered by the Company. As of December 31, 2003, the Company administered
over 3,000 plans under Section 457 and 403(b). Total governmental assets under
management were $9.7 billion and $7.9 billion as of December 31, 2003 and 2002,
respectively.

Corporate -- The Company sells retirement plan products and services to
corporations under Section 401(k) plans targeting the small and medium case
markets. The Company believes these markets are under-penetrated in comparison
to the large case market. As of December 31, 2003, the Company administered over
4,100 Section 401(k) plans. Total corporate assets under management were $5.2
billion and $3.4 billion as of December 31, 2003 and 2002, respectively.

Institutional Investment Products -- The Company sells the following products:
institutional investment products, structured settlements, GICs and other
short-term funding agreements, institutional mutual funds and other annuity
contracts for special purposes such as funding of terminated defined benefit
pension plans. Structured settlement contracts provide for periodic payments to
an injured person or survivor for a generally determinable number of years,
typically in settlement of a claim under a liability policy in lieu of a lump
sum settlement. The Company's structured settlements are sold through The
Hartford's Property & Casualty insurance operations as well as specialty
brokers. Total institutional investment products assets under management were
$13.1 billion and $9.9 billion as of December 31, 2003 and 2002, respectively.
The increase in the institutional investment products assets under management
was the result of strong sales totaling $3.4 billion, $2.0 billion and $2.6
billion for the years ended December 31, 2003, 2002 and 2001, respectively.

Section 529 Plans - Life introduced a tax-advantaged college savings product
("529 plan") in March 2002 called SMART 529. SMART 529 is a state-sponsored
education savings program established by the State of West Virginia which offers
an easy way for both residents of West Virginia and out-of-state participants to
plan for a college education. In 1996, Congress created a tax-advantaged college
savings program as part of Section 529 of the Internal Revenue Code (the
"Code"). The 529 Plan is an investment plan operated by a state, designed to
help families save for future college costs. On January 1, 2002, 529 Plans
became federal tax-exempt for qualified withdrawals. In July 2003, the Company
began selling a multi-manager 529 product.

SMART 529 is designed to be flexible by allowing investors to choose from a wide
variety of investment portfolios to match their risk preference to help
investors accumulate savings for college. An individual can open a SMART 529
account for anyone, at any age. The SMART 529 product complements the Company's
existing offering of investment products (mutual funds, variable annuities,
401(k), 457 and 403 plans). It also leverages the Company's capabilities in
distribution, service and fund performance. Total 529 Plan assets under
management were $259 and $87 as of December 31, 2003 and 2002, respectively.
 

INDIVIDUAL LIFE

The Individual Life segment provides life insurance solutions to a wide array of
partners to solve the wealth protection, accumulation and transfer needs of its
affluent, emerging affluent and business insurance clients. The individual life
business acquired from Fortis in 2001 added significant scale to the Company's
Individual Life segment, contributing to a significant increase in life
insurance in force in that year. As of December 31, 2003, life insurance in
force increased 3% to $130.8 billion, from $126.7 billion as of December 31,
2002. Account values increased 15% to $8.7 billion as of December 31, 2003 from
$7.6 billion as of December 31, 2002. Revenues were $982, $958 and $890 for the
years ended December 31, 2003, 2002 and 2001, respectively. Net income in the
Individual Life segment was $145, $133 and $121 for the years ended December 31,
2003, 2002 and 2001, respectively.

Principal Products

Life holds a significant market share in the variable universal life product
market and is the number one seller of variable life insurance, according to the
Tillinghast Value Survey. In 2003, the Company's sales of individual life
insurance were 54% variable universal life, 41% universal life and other, and 5%
term life insurance.

Variable Universal Life -- Variable universal life provides life insurance with
a return linked to an underlying investment portfolio and the Company allows
policyholders to determine their desired asset mix among a variety of underlying
mutual funds. As the return on the investment portfolio increases or decreases,
the surrender value of the variable universal life policy will increase or
decrease, and, under certain policyholder options or market conditions, the
death benefit may also increase or decrease. The Company's second-to-die
products are distinguished from other products in that two lives are insured
rather than one, and the policy proceeds are paid upon the death of both
insureds. Second-to-die policies are frequently used in estate planning for a
married couple. Variable universal life account values were $4.7 billion and
$3.6 billion as of December 31, 2003 and 2002, respectively.

Universal Life and Interest Sensitive Whole Life -- Universal life and interest
sensitive whole life insurance coverages provide life insurance with adjustable
rates of return based on current interest rates. Universal life provides
policyholders with flexibility in the timing and amount of premium payments and
the amount of the death benefit, provided there are sufficient policy funds to
cover all policy charges for the coming period. The Company also sells
second-to-die universal life insurance policies similar to the variable
universal life insurance product offered. Universal life and interest sensitive
whole life account values were $3.3 and $3.1 billion as of December 31, 2003 and
2002, respectively.

PERSONAL LINES

Personal Lines provides automobile, homeowners' and home-based business
coverages to the members of AARP through a direct marketing operation; to
individuals who prefer local agent involvement through a network of independent
agents in the standard personal lines market; and through the Company's Omni
Insurance Group, Inc. ("Omni") subsidiary in the non-standard automobile market.
Personal Lines also operates a member contact center for health insurance
products offered through AARP's Health Care Options. The Hartford's exclusive
licensing arrangement with AARP, which was renewed during the fourth quarter of
2001, continues through January 1, 2010 for automobile, homeowners and
home-based business. The Health Care Options agreement continues through 2007.
These agreements provide Personal Lines with an important competitive advantage.
Personal lines had earned premiums of $3.2 billion, $3.0 billion and $2.7
billion in 2003,

2002 and 2001, respectively. Underwriting income (loss) for 2003, 2002 and 2001
was $117, $(46) and $(87) (2001 includes $9 of underwriting loss related to
September 11), respectively.

Principal Products

Personal Lines provides standard and non-standard automobile, homeowners and
home-based business coverages to individuals across the United States, including
a special program designed exclusively for members of AARP.