Hartford (The)

A goodwill impairment requires writing down goodwill with a charge to net income (loss), which could materially adversely affect results of operations or financial condition.

An estimated ACL is recorded on the basis of periodic evaluations of balances due from insureds and considering historical credit loss information, adjusted for current economic conditions as well as reasonable and supportable forecasts when appropriate. The Company records total credit loss expenses related to premiums receivable in insurance operating costs and other expenses. Write-offs of premiums receivable and agents' balances and any related ACL are recorded in the period in which the balance is deemed uncollectible. Refer to Note 7 - Premiums Receivable and Agents' Balances for further discussion regarding the allowance for doubtful accounts included in premiums receivable and agents’ balances.

An estimated allowance for credit losses on premiums receivable is recorded based on periodic evaluations, historical credit loss information adjusted for current economic conditions and, when appropriate, reasonable and supportable forecasts; total credit loss expenses on premiums receivable are recorded in insurance operating costs and other expenses, and write-offs are recorded when deemed uncollectible.

As an insurer, insurance affordability and availability trends are under scrutiny by federal and state lawmakers and state insurance regulators with new laws and regulations potentially impacting exposure mix, growth, and reinsurance strategies. For example, regulators could impose new disclosure requirements regarding underwriting or investment in certain industry sectors or take other actions such as implementing a temporary moratorium on cancellation of policies within catastrophe prone areas. The Federal Insurance Office continues to analyze the potential for climate change to affect insurance and reinsurance coverage, which could result in increased data collection and reporting.

Condensed Consolidated Statements of Cash Flows

| | | | | | | | |
| | Six Months Ended June 30,
| (in millions) | 2026 | 2025
| Operating Activities | (Unaudited)
| Net income | $ | 2,154 | | $ | 1,625 |
| Adjustments to reconcile net income to net cash provided by operating activities: | |
| Net realized (gains) losses | (17) | | 59 |
| Amortization of deferred policy acquisition costs | 1,325 | | 1,232 |
| Additions to deferred policy acquisition costs | (1,442) | | (1,355) |
| Depreciation and amortization | 219 | | 186 |
| Other operating activities, net | 173 | | 169 |
| Change in assets and liabilities: | |
| Decrease in reinsurance recoverables | 153 | | 32 |
| Net change in accrued and deferred income taxes | (381) | | (181) |
| Increase in insurance liabilities | 1,657 | | 1,784 |
| Net change in premiums receivable and agents' balances | (749) | | (752) |
| Net change in other assets and other liabilities | (858) | | (523) |
| Net cash provided by operating activities | 2,234 | | 2,276 |