The Hartford’s New Underwriting Process is Expected to Cut the Cost of Life Insurance for 25% of New Policyholders

While the cost of term life insurance is creeping up, the cost of purchasing a permanent life insurance policy from The Hartford is expected to fall this year for at least 25 percent of its new policyholders. That’s because The Hartford has developed a new, proprietary underwriting process that substantially improves the company’s ability to assess an individual’s current health and mortality risk.

The Hartford’s chief medical strategist, Dr. Robert Pokorski, estimates that more than half of new policyholders will now qualify for one of the company’s two lower-cost "preferred” classifications and that they could save hundreds of dollars on their annual premium compared to the "standard” rate. For example, a 55-year-old male assessed as a preferred risk would save $1,286 on a $500,000 universal life policy.

Dr. Pokorski said the new underwriting process gives The Hartford a competitive advantage by taking a more holistic approach to assessing risk that gives individuals credit for a much wider array of variables. For example, someone being treated for high blood pressure or cholesterol would have been automatically disqualified for the most preferred classification under the old process. That is no longer the case under the new system, as long as they have other factors weighing in their favor.

One of the main innovations of the new system is the use of three age bands, rather than the two that are used by most insurers. This change recognizes the unique risk characteristics of young, middle-aged, and older people, and allows underwriters to offer insurance at a rate that more closely reflects an individual’s risk. For example, The Hartford estimates that three in ten older applicants will now qualify for the most favorable preferred rate, which is a three-fold increase compared to the old system.

The new underwriting process also gives an individual credit for being in good physical condition, for getting regular exercise, for a favorable result on imaging tests used to screen for heart disease, and, in the case of older applicants, for having parents who lived to a ripe old age.

"The new underwriting process is a lot more work for our team of physicians and underwriters, but it gives us a much clearer picture of the true risks associated with insuring each individual,” Dr. Pokorski said.

The company’s underwriting department, which is known in the industry for innovation in other areas, was the first in the nation to offer standard rates on life insurance to women recovering from breast cancer and men who have been successfully treated for prostate cancer.

About The Hartford

Celebrating 200 years of helping its customers achieve what's ahead, The Hartford (NYSE: HIG) is an insurance and wealth management company. Through its unique focus on customer needs, the company serves businesses and consumers by providing the products and solutions they need to protect their assets and income from risks and manage their wealth and retirement needs. A Fortune 100 company, The Hartford is recognized widely for its service expertise and as one of the world's most ethical companies. More information on the company and its financial performance is available at www.thehartford.com.

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Some of the statements in this release may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. 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. These important risks and uncertainties include those discussed in our Quarterly Reports on Form 10-Q, our 2009 Annual Report on Form 10-K and the other filings we make with the Securities and Exchange Commission. We assume no obligation to update this release, which speaks as of the date issued.