T H E H A R T F O R D

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1 T H E H A R T F O R D AIFA March 7, 2005 John Walters Executive Vice President, Investment Products Division Hartford Life, Inc. 1

2 Safe Harbor Statement Certain statements made in this presentation should be considered forwardlooking statements as defined in the Private Securities Litigation Reform Act of These include statements about our future results of operations. 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, including those discussed in our Annual Report on Form 10-K filed on February 28, 2005 and other filings we make with the Securities and Exchange Commission. We assume no obligation to update this presentation, which speaks as of today s date. 2

3 Hartford Life Total Annuity Assets $120 $100 Fixed Variable $89.0 $87.2 $84.2 $97.7 $111.0 ($ Billions) $80 $60 $40 $20 $0 $74.9 $70.8 $56.3 $41.7 $29.4 $13.9 $20.3 $2.5 $4.5 $

4 Industry Variable Annuity Sales The Hartford #1 Since VA Sales ($ Millions) Hartford Life $15,244 TIAA-CREF Equitable Metlife AIG/SunAmerica ING Lincoln National Pacific Life John Hancock Prudential $9,552 $9,355 $8,848 $7,674 $7,019 $6,401 $5,948 $5,767 $13,093 Rank Company 2004 Market Share 1 Hartford Life 11.87% 2 TIAA-CREF 10.20% 3 Equitable 7.44% 4 Metlife 7.29% 5 AIG/SunAmerica 6.89% 6 ING 5.98% 7 Lincoln National 5.47% 8 Pacific Life 4.99% 9 John Hancock 4.63% 10 Prudential 4.49% Industry Variable Annuity Sales 2004 Source: VARDS 4

5 Sustainable Competitive Advantages Innovative Products Award Winning Service Financial Advisor World Class Money Management Value Added Distribution 5

6 The Variable Annuity Product Development Process Hartford Life J Profitability J Appropriate Risk Profile Distributor Customer J Price J Value J Service J Unique Client Solutions J Compensation J Ease of Doing Business 6

7 World Class Asset Management Director / Director M Leaders 7

8 PLANCO Distribution 290 Sales Consultants 366 Home Office Employees $152 Million 2005 Budget 2004 Sales Consultant Activities Office/Regional meetings Walk throughs Seminars Continuing education Total 195,710 45,165 13,551 2, ,533 8

9 Industry Leading Efficiency Individual Annuity Expense Comparison Operating Expenses Per Account $ Hartford Life Annuity Operating Expenses $ ($ Mil) $ $100 $ $50 $100 $50 $ $ Operating Expenses in BPS of Account Value

10 2004 Annuity Service & Technology Statistics Total Customers: 1.7 Million Total Transactions: 5 Million Total Calls: 3.9 Million Total Hits: 4 Million Total Documents: 8 Million Record Year 10

11 Annuity Industry Overview Variable Annuity Product Arms Race; What s Next? Accounting Changes (C-3 Phase II): Pressure Product Design Suitability / Regulatory Concerns Annuity Tax Legislation 11

12 Industry Living Benefit Product Development GMWB GMAB GMIB # of New Offerings Price 35 bps bps bps bps W/D's 7% 7% 3-7% 5-7% Step-up Yes, 5 year Yes, 5 year Yes, 1-5 year Yes, 1-5 year Revocable No Yes/No Yes/No Yes/No Asset Alloction No Yes/No Yes/No Yes/No # of New Offerings Price 25 bps bps bps bps Waiting Period 7 years 5-20 years 5-20 years 5-20 years Step-up Annual None; 1-5 years None, 1-5 years None, 1-5 years Revocable Yes Yes/No Yes/No Yes/No Asset Alloction Yes Yes Yes Yes # of New Offerings Price 30 bps 25 bps 30 bps 50 bps bps bps Waiting Period 7 years 7 years 7-10 years 7-10 years 7-10 years 7-10 years Roll-up 4% 6% < of 6% or MAV 5-6% 5-7% 5-7% Withdrawals $ for $ $ for $ $ for $ $ for $ $ for $, pro-rata $ for $, pro-rata Asset Alloction No No No Yes/No Yes/No Yes/No Source: VARDS

13 What is C-3 Phase II? C-3 Phase II C-3 Phase II is the result of a joint effort of regulators (through the NAIC) and the industry (through the American Academy of Actuaries) to better account for the risks associated with VA guarantees. Which variables impact capital requirements? I. Types of guarantees Benefits vary significantly across policies II. III. IV. Product duration Capital demands tend to decline over time In the money % - A higher % implies greater capital strain Asset allocation choices Capital demands vary across the risk spectrum 13

14 How Do We Manage Risk? Product Design Reinsurance Hedging 14

15 Annuity Tax Legislation Promoting Lifetime Income The Retirement Security for Life Act of 2005 Broad based coalition of interests Bipartisan bill reintroduced in both the House and the Senate on February 15, (H.R. 819, S. 381) New tax incentive for retirement vehicles, such as annuities, that provide guaranteed lifetime income. Individuals would not pay federal taxes on one-half of the income generated under a life annuity. Annual limit of $20,000 per year that could be excluded. 15

16 Hitting Our Sweet Spot # of Individuals Turning 60 (Millions) # of Individuals turning 60 Industry VA Sales Estimate $ $ $700 $600 $500 $400 (Billions) $ $64.5 $ $200 $100 $0 Source: VARDS Variable Annuity Data 2004 Census Bureau 16

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18 Disclosure The Hartford variable annuities are issued by Hartford Life Insurance Company and by Hartford Life and Annuity Insurance Company and are underwritten and distributed by Hartford Securities Distribution Company, Inc. Neither The Hartford nor its agents or employees provide financial, tax, legal, or accounting advice. Your clients should contact a qualified advisor for guidance in these matters. If your clients are investing in a variable annuity through a tax-advantaged retirement plan such as an IRA, they will get no additional tax advantage from the variable annuity. Under these circumstances, they should only consider buying a variable annuity if it makes sense because of the annuity's other features, such as lifetime income payments and death benefit protection. 18