HIG: Farewell Funds; Updating Estimates and Price Target

Research evidence excerpt

HIG: Farewell Funds; Updating Estimates and Price Target

P&C (12.3x P/E), $26 to value of $93 to P&C (7.5x P/E), $16 to

Benefits (11.6x P/E), and ($6) for Employee Benefits (14.3x P/E), and ($7) Employee Benefits (8.8x P/E), and ($4)

Corporate. for Corporate. for Corporate.

• Our target represents a multiple of 1.9x • Our upside target represents a multiple • Our downside target represents a

our 2027 GAAP book value (including of 2.2x our 2027 book value per share. multiple of 1.3x our 2027 book value per

AOCI) per share. • Assumes continued strong commercial share.

• Results in the base case equates to a pricing, growth and margin • Assumes further softening in

16.3% ROE in 2027 vs their target floor improvement, particularly within commercial pricing and lower premium

of 15%+, 15.5% projected in 2026, and commercial underlying results. growth

16.4% in 2028. • Strong auto margins • Adverse PYD particularly in liability lines

• Employee benefits after-tax margins • Higher personal auto loss trends

north of its 6-7% target translating into weaker margins

• Below 15% operating TTM ROE

Upcoming Catalysts Company Description

• Commercial pricing data: Monthly commercial pricing survey Hartford Financial Services is an insurance and financial services

data from MarketScout/Ivans to track movement in rate across company. It provides property and casualty insurance (both

various commercial lines, including workers' compensation commercial and specialty lines), Employee Benefits and Mutual

• Peer results: Commentary from other peers around loss cost Funds to both individual and businesses across the U.S.

trends and rate adequacy

• Q2 earnings: Q2 results should be reported at the end of July

2 | Equity Research