Company: HIG-PG
Filing Date: 2025-07-28
Form Type: 10-Q
Source: 0000874766-25-000084
Chunk: 279

Company: HARTFORD INSURANCE GROUP, INC.
Filing Date: 2025-07-28
Form: 10-Q
Item: Item 8
Chunk 279
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ordinated Debentures section within Note 13 - Debt of Notes to Consolidated Financial Statements, included in The Hartford's 2024 Form 10-K Annual Report.Foreign currency swaps are used to convert foreign currency denominated cash flows related to certain investment receipts to U.S. dollars in order to reduce cash flow fluctuations due to changes in currency rates.Non-qualifying StrategiesDerivative relationships that do not qualify for hedge accounting (“non-qualifying strategies”) primarily include hedges of interest rate, foreign currency, and equity risk of certain fixed maturities and equities. In addition, hedging and replication strategies that utilize credit default swaps do not qualify for hedge accounting. The non-qualifying strategies include:Credit ContractsCredit default swaps are used to purchase credit protection on an individual entity or referenced index to economically hedge against default risk and credit-related changes in the value of fixed maturity securities. Credit default swaps are also used to assume credit risk related to an individual entity or referenced index as a part of replication transactions. These contracts require the Company to pay or receive a periodic fee in exchange for compensation from the counterparty or the Company should the referenced security issuers experience a credit event, as defined in the contract. The Company also enters into credit default swaps to terminate existing credit default swaps, thereby offsetting the changes in value of the original swap going forward.Interest Rate Swaps and FuturesThe Company uses interest rate swaps and, to a lesser extent, futures to manage interest rate duration between assets and liabilities. In addition, the Company enters into interest rate swaps to terminate existing swaps, thereby offsetting the changes in value of the original swap going forward. As of June 30, 2025 and December 31, 2024, the notional amount of interest rate swaps in offsetting relationships was $333 and $344, respectively. Foreign Currency SwapsThe Company enters into foreign currency swaps to convert the foreign currency exposures of certain foreign currency-denominated fixed maturity investments to U.S. dollars. Equity Index OptionsThe Company enters into equity index options to hedge the impact of a decline in the equity markets on the investment portfolio. Derivative Balance Sheet ClassificationFor reporting purposes, the Company has elected to offset within assets or liabilities based upon the net of the fair value amounts, income accruals, and related cash collateral receivables and payables of OTC derivative instruments executed in a legal entity and with the same counterparty under a master netting agreement, which provides the Company with the legal right of offset. The following fair value