Hartford Financial Services Affirmed

Fitch Ratings affirmed the fixed income ratings of the Hartford Financial Services Group Inc. (HFSG), including the “A+” senior debt rating, and the “AA” insurer financial strength ratings of its primary property/casualty operation, the Hartford Fire Intercompany Pool (Hartford Fire). The rating outlook is stable.

The rating rationale is based on HFSG’s strong and consistent operating performance during difficult market conditions, good balance sheet and broad business diversification. Fitch believes that the recent resolution of the PPG asbestos litigation was favorable to Hartford Fire as the company did not need to set up additional reserves and a major claim is now closed. The company’s exposure to losses tied to events of Sept. 11 remain within the company’s original estimate of net exposure of $440 million, and losses have subsequently been replaced with capital raised during the fourth quarter of 2001.

Fitch said Hartford Fire’s strengths include its diverse market and product profile, solid underwriting discipline, strong balance sheet position and sound operating performance in difficult market conditions. Asset quality also remains excellent.

Fitch’s primary concerns for Hartford Fire include challenges the company has encountered in various business lines, with the main focus related to the performance in the assumed reinsurance operation. The ratings also reflect parent company financial leverage and ongoing risks associated with asbestos and environmental loss exposure.

The company’s coverage ratios should benefit from improved market conditions in the commercial property/casualty sector. Given the improved conditions, Hartford Fire is likely to report a combined ratio for 2002 that represents solid improvement from recent years.