Investor Day International Operations in Japan

Investor Day International Operations in Japan Hartford Life Insurance K.K. Hotel Okura, Maple Room Tokyo, Japan September 22, 2004 1

SAFE HARBOR STATEMENT Certain statements made in this presentation should be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. 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 quarterly report on Form 10-Q filed on August 4, 2004 and the 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

CONTENTS 1. Introduction Hans Miller 3:00~3:05 Senior Vice President, Planning Development, IR, The Hartford 2. Hartford s International Vision & Goals Gregory A. Boyko 3:05~3:20 Chairman & CEO, Hartford Life International 3. Japan s VA industry: A Growth Industry Timothy P. Schiltz 3:20~3:25 President & CEO Hartford Life Insurance K.K. 4. Hartford s Strategy in Japan Timothy P. Schiltz 3:25~4:30 President & CEO Hartford Life Insurance K.K. Financial Discipline Takeshi Seki CFO, Hartford Life Insurance K.K. Business Development Kazuhiko Sunagawa Chief Marketing Officer, Hartford Life Insurance K.K. Distributor Services Richey W. Rogers Chief Sales Officer, Hartford Life Insurance K.K.. BREAK 4:00~4:10 Product Manufacturing Ron H. Tani Vice President & Director of Product Management Unparalleled Customer Service Rose V. Mihaly Senior Vice President & Chief Administrative Officer 5. Q & A Hans Miller 4:30~5:00 Senior Vice President, Planning Development, IR, The Hartford 3

CONTENTS 1. Introduction Hans Miller 3:00~3:05 Senior Vice President, Planning Development, IR, The Hartford 2. Hartford s International Vision & Goals Gregory A. Boyko 3:05~3:20 Chairman & CEO, Hartford Life International 3. Japan s VA industry: A Growth Industry Timothy P. Schiltz 3:20~3:25 President & CEO Hartford Life Insurance K.K. 4. Hartford s Strategy in Japan Timothy P. Schiltz 3:25~4:30 President & CEO Hartford Life Insurance K.K. Financial Discipline Takeshi Seki CFO, Hartford Life Insurance K.K. Business Development Kazuhiko Sunagawa Chief Marketing Officer, Hartford Life Insurance K.K. Distributor Services Richey W. Rogers Chief Sales Officer, Hartford Life Insurance K.K.. BREAK 4:00~4:30 Product Manufacturing Ron H. Tani Vice President & Director of Product Management Unparalleled Customer Service Rose V. Mihaly Senior Vice President & Chief Administrative Officer 5. Q & A Hans Miller 4:30~5:00 Senior Vice President, Planning Development, IR, The Hartford 4

HARTFORD S INTERNATIONAL VISION & GOAL Vision: To be the premier provider of savings, wealth creation, and financial protection solutions in significant European, Asian, Pacific Rim, and South American markets where our competitive advantages can be leveraged Goal: To be a core business and growth engine for The Hartford 5

EXECUTIVE OVERVIEW Baby boomers worldwide are facing a retirement crisis With rising life expectancies and declining birth rates, many of the world s leading countries are faced with rapidly aging populations Shrinking, aging populations are placing strains on those countries dependency ratios These demographic shifts have left both public and private pensions underfunded As a result, the demand for alternative retirement products is extremely high Hartford Life International is helping to satisfy this demand in Japan, Brazil, and the U.K. 6

GLOBAL DEMOGRAPHIC SHIFTS ARE DRIVING A RETIREMENT DILEMMA The populations of the world s wealthiest countries are shifting rapidly as people live longer and birth-rates decline Percent of Population over age 60 50% 42% 40% 30% 20% 10% 10% 21% 16% 26% 21% 30% 23% 35% 23% 0% World US UK Germany Japan 2000 2050 Source : United Nations Population Division 7

INCREASING LIFE EXPECTANCIES WILL DRIVE DEMAND FOR RETIREMENT SOLUTIONS Individuals are living longer, increasing the length of time retirement income is needed Life Expectancies 88.0 88.0 84.0 82.6 83.0 83.4 80.8 80.0 76.8 77.6 77.8 76.0 72.0 68.0 U.S. U.K. Germany Japan 2000 2050 Source: Watson Wyatt Aging Vulnerability Index, 2003, and the U.N. 8

DECLINING WORKFORCES WILL BE UNABLE TO FUND FUTURE PENSIONS Aging populations make it difficult for pension systems to provide for a significantly older, non-working population Dependency Ratios* 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2000 2010 2020 2030 2040 U.S. U.K. Germany Japan * Ratio of Workers (aged 15-59) to Retirees (60 and over) Source: Watson Wyatt Aging Vulnerability Index, 2003 9

UNDER-FUNDED PUBLIC PENSIONS ARE NO LONGER THE SOLUTION Public pension systems appear increasingly unsustainable, heightening the need for alternative sources of retirement income Projected Net Asset Position of Public Pension Funds in 2050 (as % of GDP) 0% -100% -200% -66.0% -24.3% -300% -400% -500% -423.0% U.S. U.K. Germany Japan -399.0% Source: M. M. Warburg Investment Research 10

RETIREMENT PREMIUMS ARE HIGHLY CONCENTRATED Japan and Europe represent only 8% of the global population, yet they account for 56% of the world s retirement premiums 2001 World Population 2001 Life & Pension Premiums China 19% Rest of Europe 6% Rest of World 6% Rest of World 48% India 15% Europe 6% Germany 8% United Kingdom 12% United States 38% Japan 2% Brazil 3% United States 4% Indonesia 3% Japan 30% Source: U.N. Population Division, 2003; Sigma Swiss Re, 2002 11

SIGNIFICANT PERSONAL FINANCIAL ASSETS High GDP and savings rates translate into significant financial assets Personal Financial Assets $20 $34.9 $ Trillions $15 $10 $11.6 $5 $3.1 $2.5 $0 U.S. U.K. Germany Japan Source: McKinsey, Datamonitor, 2002 12

AS AN INVESTMENT PRODUCT, THE VA UNIQUELY MEETS THE MOST FUNDAMENTAL NEEDS OF CUSTOMERS CUSTOMER NEEDS THE BENEFITS OF THE VA Priority in Selection of Financial Assets, 1995~2002 (BOJ Survey of Japanese Households Percentage of Respondents) 40% 35% 30% 25% 20% 15% 10% 5% 0% 95 96 97 98 99 00 01 02 GUARANTEE OF PRINCIPAL Minimum annuity payment guarantee Minimum guaranteed death benefit LIQUIDITY Liquidity Features allows access to emergency needs for cash CREDIBILITY OF FINANCIAL INSTITUTION AA- S&P Rating PROFITABILITY Equity participation provides possibility of higher returns Favorable tax treatment for both retirement planning and estate planning Credibility of Financial Institution Profitability Guarantee of Principal Liquidity Source: Bank of Japan, Nikkocitigroup, Hartford Estimates 14

JAPAN S VA INDUSTRY IS A GROWTH INDUSTRY Variable Annuity Industry Assets 30 25 $ Billions CAGR 179% 28.2 20 15 10.2 10 5 1.3 2.7 0 3/31/01 3/31/02 3/31/03 3/31/04 Customers in Force (Thousand) Creation of Customers 600 500 400 300 200 100 0 100 150 CAGR 77% 3/31/01 3/31/02 3/31/03 3/31/04 310 559 Source: Hokken Mainichi, Assets as of Mar, 2004, Deloitte Tomatsu Consulting 15

HARTFORD S VISION IN JAPAN VISION s To be the premier provider of retirement savings, wealth creation and financial protection solutions in Japan STRATEGIC GOALS Financial Customer & Marketplace Organizational STRATEGIC OBJECTIVES s - Steady Net Income Growth - ROE > 15% - Product Diversification - Distributor Diversification - Leading Market Share at Major Distributors - Increasing same store sales - Unparalleled Customer Service - High Performance Culture - Leverage Best Practices of Hartford US - Continued Focus on Governance 17

HARTFORD S GROWTH IN JAPAN HAS BEEN RAPID $ Billions Account Value of Hartford Life Japan s Policyholders 10 8.1 9.3 8 6 4.8 4 2.3 2 0.1 0.3 0.5 1.0 0 3/31/01 9/30/01 3/31/02 9/31/02 3/31/03 9/31/03 3/31/04 6/30/04 Sept. 2004 Launch Yen, $ Fixed Annuity Jul. 2003 Launch 4 th generation VA Product through Nomura Securities Dec. 2000 Launch first VA product Hartford NK Oct. 2002 Deregulation allows banks and bank affiliated securities firms to sell VA. Hartford starts distribution through these two channels. Launch third VA product Adagio 18

HARTFORD S GROWTH IN JAPAN HAS BEEN RAPID CREATING OVER 126,000 NEW CUSTOMERS Creation of Customers Customers in Force (Thousand) 140 120 100 80 60 40 20 0 102 65 41 21 13 3 7 3/31/01 9/30/01 3/31/02 9/30/02 3/31/03 9/30/03 3/31/04 126 6/30/04 19

HARTFORD IS THE LEADING PLAYER IN THE JAPANESE VARIABLE ANNUITY MARKET #1 market share at 27.3% (At the end of Mar. 2004) Yet competition remains dynamic. Two of the newest entrants are not from even within the traditional life insurance industry Top 10 Players in the VA Market by Assets Hartford Life Insurance K.K. Mitsui Sumitomo Citi Insurance 15.5% $8.1B 27.3% ING Life 10.3% Mitsui Life 8.0% Sumitomo Life 7.3% Alico Japan T&D Financial Life Daiichi Life 6.7% 5.7% 4.9% Nippon Life Tokio Marine & Nichido Financial Life 4.8% 4.6% 0 1 2 3 4 5 6 7 8 9 Source: Hokken Mainichi, Assets as of Mar, 2004 $ Billions 20

A SIGNIFICANT CONTRIBUTOR TO THE GROWTH OF OF HARTFORD S GLOBAL VA SALES & NET CASH FLOW Hartford Japan VA sales Contribution to Hartford Global VA Sales 21 Hartford Japan VA Net Cash Flow Contribution to Hartford Global VA Net Cash Flow 12 18 10 15 8 $ Billions 12 9 6 95% 88% 81% 74% $ Billions 6 4 68% 59% 3 0 19% 26% 5% 12% 2001 2002 2003 1st H. 2004 JAPAN U.S. 2 0 58% 32% 41% 73% 42% 27% 2001 2002 2003 1st H. 2004 JAPAN U.S. 21

GROWTH IS BALANCED WITH FINANCIAL DISCIPLINE Profitable in third year of operation (On a U.S. GAAP basis) However, managing expenses remains a challenge when growing so quickly Rapid growth as opposed to slow and steady growth requires additional infrastructure investments Solution Diligent about expense management Prioritize and make the most of investments Ultimately, disciplined in terms of margins Our objective is to earn at least a 15% ROE Disciplined in terms of risk management, product design 22

REGULATIONS AFFECTING RESERVES AND SOLVENCY MARGIN RATIO On August 10, Japan s Financial Services Agency announced draft regulations that would establish the broad framework for new reserving and solvency margin methodologies for variable annuity contracts. The regulations should strengthen the industry over the long term by ensuring that all companies hold appropriate reserves that reflect risks inherent in the underlying product features. The draft regulations describe a simple standard methodology that is based on a formula methodology for reserve and a factor methodology for surplus capital. It also allows for alternative methodologies, but they are not described in any detail. After considering comments received during a 30-day public comment period that ended September 9, the FSA is expected to finalize the regulations by the end of 2004 and so they could go into force on April 1, 2005. The FSA will issue a set of more detailed administrative guidelines by the end of 2005, that will describe what alternative methodologies will be permitted. At this time, it is not possible to predict the final form of the regulations and administrative guidelines or estimate the potential impact. However, it is possible that in the future Hartford Japan could require additional capital, which left alone could lower our ROE, as a result of the new regulations. In such an event we will seek solutions such as better capital management and re-pricing to hit our return targets. Hartford is cooperating closely with the Institute of Actuaries of Japan and the FSA to ensure that the methodologies adopted promote effective risk management and ensure that companies may provide a wide variety of innovative product features at a reasonable cost. We are optimistic that we will be able to come up with a satisfactory solution, based on the best risk management techniques available. Hartford is encouraged by the fact that the IAJ and the FSA have both indicated that they plan to allow the same type of methodology that will be introduced in the U.S. in 2005, namely stochastic modeling combined with Conditional Tail Expectation (CTE) statistical measures to set the required reserve and surplus levels. 23

GROWTH THROUGH ADDITION OF TARGETED DISTRIBUTORS Target leading financial institutions within each channel Obtain distribution relationships with every major bank and securities firm in Japan Six Target Channels Large Securities Firms Mega Banks Trust Banks Hartford Life K.K. Mega Bank Affiliated Securities Firms Top 10 Regional Banks Others* Note *Others include primarily regional banks ranked 11~100 24

GROWTH THROUGH ADDITION OF TARGETED DISTRIBUTORS Number of Distributors Number of Distributors 50 40 30 20 10 0 1 1 5 7 3/31/01 9/30/01 3/31/02 9/30/02 3/30/03 9/30/03 3/30/04 6/30/04 32 39 44 47 Sales 3 2.6 $ Billions 2 1 0 0.1 0.2 0.3 0.5 1.5 1.9 1.6 3/31/01 9/30/01 3/31/02 9/30/02 3/30/03 9/30/03 3/30/04 4/1~6/30/04 Sales (6-months Ending) 25

NETWORK OF DISTRIBUTORS PROVIDES INCREASING FOOTPRINT IN JAPAN Hartford s products are found in over 5,752 branches throughout Japan Top 20 Distributors* Supporting Hartford Japan - Awa Bank - Chuo Mitsui Trust - Fukuoka Bank - Joyo Bank - Juroku Bank - Kyoto Bank - Mitsubishi Securities - Mitsubishi Trust - Mizuho Bank - Nikko Securities - Nomura Securities - Senshu Bank - Shinsei Bank - Sumitomo Trust - Suruga Bank - The Bank Of Tokyo Mitsubishi - Tokyo Tomin Bank - UFJ Trust - UFJ Tsubasa Securities - Yokohama Bank Chugoku 224 branches Kyushu / Okinawa 621 branches Hokuriku / Shinetsu 143 branches Kinki 1,209 branches Shikoku 255 branches Tokai 480 branches Hokkaido 185 branches Tohoku 326 branches Kanto 2,309 branches Note: *YTD through June 2004 26

CONTINUE TO EXPAND DISTRIBUTION Trillion $ Current Penetration of Hartford s targeted distributors 54% 3.0 2.5 2.0 1.5 1.0 0.5 0.0 47% 1.3 82% 0.2 1.1 1.0 Total Deposits / AUM for all distributors within each channel Total Deposits / AUM held by Hartford distributors 82% 0.1 0.6 Mega Banks Trust Banks Large Securities Firms 51% 0.3 0.3 0.1 0.2 Top 10 Regional Banks 53% Mega Bank Affiliated Sec. Firms* 32% 1.1 0.5 Others* Issue Market is highly concentrated 3 more Mega Banks achieves 100% penetration 1 more Trust Bank achieves 100% penetration 1 more Large Securities Firm achieves 100% penetration 5 more Top 10 Regional Bank achieves 100% penetration. Source: 2003 Nikkei Kinyu Nenpo Penetration As of June 2004 *Others include primarily regional banks ranked 11~100 27

MAINTAIN GROWTH BY INCREASING SAME STORE SALES Make it easier for agents to sell Hartford products Existing producers: Private Bankers New producers: Counter Sales People Increase in Same Store Sales from Prior Year +38% $ Billions 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 0.5 1.3 1.3 1st H. 2003 1st H. 2004 +38% Note: Same store sales = Sales in 2004 for Distributors starting before 1/1/03 Sales in 2003 for Distributors starting before 1/1/03 28

WHOLESALING U.S. vs. JAPAN SIMILARITIES DIFFERENCES PEOPLE Generally 27~37 years old Energetic Competitive Sense of obligation to customer Consistency in wholesaler quality Cultural Style Non-verbal messages ACTIVITIES Seminars Due diligence meetings Broker training Effectiveness of role playing as training tool On the job training VALUE ADDED Wholesaling support services Sales tools Broker Call Center Key account management Business plans The variable annuity is still very new in Japan 29

PRODUCT DIVERSIFICATION Add innovative new products Sales 2000.12 2001.9 2001.9 2002.5 2002.10 2003.7 2003.10 2004.9 Adagio: Japan First, Annuity Principal Guarantee at the age of 90 Japan First Customized Funds Products Fixed-rate Annuity Products New Adagio: 100% Annuity Payout Riders Hartford Toshigata Nenkin N Series: Japan First, Earnings Liquidity Feature Hartford Director: Japan First, Liquidity Option and Fully Customized Annuities NEW Hartford NK :Japan First, Whole-Life Act, Japan First, Life Annuity with Cash Refund and Spousal Annuities Hartford NK :Japan First, Step-up Death Benefit, Automatic Portfolio Rebalancing and Dollar-cost Averaging Product Development 30

PRODUCT DIVERSIFICATION Add innovative new products EXISTING VARIABLE ANNUITY CUSTOMER BENEFITS Equity-based Return Guaranteed Annuity Payments Guaranteed Return of Principal Death Benefit Earnings Liquidity Feature Accidental Death Benefit NEW FIXED ANNUITY CUSTOMER BENEFITS Yen or Dollar-denominated Competitive Credited Rate 10-year guarantee period on both 5-year guarantee period on Dollar Annual MVA-free Liquidity Front-end Loaded, No surrender charges FEES 210 to 236 basis points per annum NOTES Risks mitigated by: - Requirement to use balanced funds - sufficient fee structure - 10 to 20- year waiting period for guarantees - payouts made over time (minimum 10 years) NOTES Spread-based Income Low Strain Market Value Adjustment (MVA) on Withdrawals Provides source of non-equity linked earnings 31

MANAGING GROWTH Our business has more than doubled every year AUM Growth of Hartford Japan Exceeds Historic Growth in U.S. Early years of Hartford U.S. VA business 35 30 $ Billions 25 20 15 10 5 Hartford Japan 2001 ~June 2004 0 U.S. JAPAN 1988 2001 1989 2002 1990 2003 Jun 04 1991 1992 1993 1994 1995 1996 32

ENSURE UNPARALLELED CUSTOMER SERVICE Leverage best practices, experience from the U.S. Stay nimble Organized and opportunistic Customer Services Ensure quality, efficiency and speed of service Have single core administrative system and associated data Have necessary information readily available to service representatives Distributor Services Ease of doing business Flexibility and responsiveness to customized needs of distributors Ease in launching new products Provide brokers access to essential, pertinent customer data Ability to work together on compliance, regulation issues Have been continuously improving distributor servicing capabilities 33