Hartford Fire Outlook Neg

Standard & Poor’s said the outlook for Hartford Fire Insurance Co. and related property/casualty entities remains negative despite the trend toward improved earnings throughout the remainder of 2002. The negative outlook was established after the World Trade Center disaster. It reflects concern about the capital adequacy of the property/casualty operations, which is currently below expectations.

S&P believes the company’s near-term ability to improve the capital adequacy of the property/casualty operations will be limited by new business strain and the downturn in the equity markets. The company has the capacity to improve the capital adequacy of Hartford Fire and management has committed to doing so. The property/casualty operations remain susceptible to unexpected risks that include but are not limited to asbestos litigation, further deterioration in the global credit markets, and potential catastrophe losses.

Factors supporting the company’s ratings are its strong brand name and market position in domestic property/casualty, better-than-average profitability as compared with the industry, and the diversification it enjoys from its relationship with Hartford Life Inc., a wholly-owned subsidiary.

Hartford Fire has a financial strength rating of “AA” and is a wholly owned subsidiary of Hartford Financial Services Group Inc.

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