Company: HIG-PG
Filing Date: 2025-02-21
Form Type: 10-K
Source: 0000874766-25-000023
Chunk: 772

Company: HARTFORD INSURANCE GROUP, INC.
Filing Date: 2025-02-21
Form: 10-K
Item: Item 9B
Chunk 772
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. Options generally become exercisable over a period of three years commencing one year from the date of grant. The Company uses a hybrid lattice/Monte-Carlo based option valuation model (the “Plan Valuation Model”) that incorporates the possibility of early exercise of options into the valuation. The Plan Valuation Model also incorporates the Company’s historical termination and exercise experience to determine the option value.The Plan Valuation Model incorporates ranges of assumptions for inputs, and those ranges are disclosed below. The term structure of volatility is generally constructed utilizing implied volatilities from exchange-traded options, historical volatility of the Company’s stock and other factors. The Company uses historical data to estimate option exercise and employee termination within the Plan Valuation Model, and accommodates variations in employee preference and risk-tolerance by segregating the grantee pool into a series of behavioral cohorts and conducting a fair valuation for each cohort individually. The expected term of options granted is derived from the output of the option Plan Valuation Model and represents, in a mathematical sense, the period of time that options are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Constant Maturity Treasury yield curve in effect at the time of grant. Stock Options Valuation Assumptions For the years ended December 31, 202420232022Expected dividend yield1.8%2.0%2.3%Expected annualized spot volatility19.2 %-22.7%24.5 %-26.0%28.3 %-29.6%Weighted average annualized volatility21.7%25.4%28.8%Risk-free spot rate4.3 %-5.5%3.8 %-5.1%(0.04)%-2.0%Expected term7.4 years6.7 years6.4 yearsNon-qualified Stock Option Activity Under the Stock Incentive PlanNumber of Options(in thousands)WeightedAverageExercise PriceWeightedAverageRemainingContractualTermAggregateIntrinsic ValueFor the year ended December 31, 2024Outstanding at beginning of year6,071 $55.92 Granted270 $95.74 Exercised(1,823)$50.45 Forfeited— $— Expired— $— Outstanding at end of year4,518 $60.51 5.4$221 Outstanding, fully vested and expected to vest4,494 $