The Business of Sales - The Hartford

The Business of SalesThe Business of SalesKevin ConnorManaging Director and Senior Vice PresidentPLANCO1

The Business of SalesSafe Harbor StatementCertain statements made in this presentation should be consideredforward-looking statements as defined in the Private Securities LitigationReform Act of 1995. These include statements about The Hartford’sfuture results of operations. We caution investors that these forwardlookingstatements are not guarantees of future performance, and actualresults may differ materially. Investors should consider the importantrisks and uncertainties that may cause actual results to differ, includingthose discussed in The Hartford’s Annual Report on Form 10-K filed onFebruary 28, 2005 and other filings we make with the Securities andExchange Commission. We assume no obligation to update thispresentation, which speaks as of today’s date.2

The Business of SalesDistribution was (and is) our only Business• Founded in 1977 as a Partnership• Privately owned for 21 years• “For Profit” Culture••• Sole focus on distributing financial products• Purchased by The Hartford in 1998• Total Sales since 1977:$142,475,411,791 as of 12/31/043

The Business of Sales28 Years of:• Wholesaling investment products to investmentprofessionals• Dedication to the Financial Advisor• Focus on driving revenue• Top down/Bottom up approach4

The Business of SalesSalesCultureCompetitive Advantage:Entrepreneurial ApproachIntegratedApproachClosenessto theBrokerUniqueness5

Sales CultureThe Business of SalesPLANCO Distribution• 290 Sales Consultants• 366 Home OfficeEmployees• $152 Million 2005Budget6

Sales CultureThe Business of SalesPeople: PLANCO OfficersAverage Tenure:19 Years in the Industry18 Years with PLANCO7

Sales CultureThe Business of SalesPeople: PLANCO Sales ManagementAverage Tenure:13 Years in the Industry10 Years with PLANCO8

Sales CultureThe Business of Sales$33$30$27$24Results-OrientedTotal Sales: 1998-2004CAGR: ’98-’04: +28%+43%$25.9+20%$31.1Products/Business SegmentsHartfordJapanHartfordInvestmentsCanadaPutnam suite($ in Billions)$21$18$15$12$9$6$3$7.2+49%$10.7+32%$13.9+9%$15.2+19%$18.1Leaders suiteThe HartfordMutual FundsDirector suiteSmart529401(k)$01998 1999 2000 2001 2002 2003 2004CRCSelect/SaverPlus9

Sales CultureKey PLANCO MetricsWholesaler Productivity: Sales Per Wholesaler and Cost of Sales($ in Millions)$100$90$80$70$60$50# of Wholesalers:78 bps77 bps$89.0$84.2$80.867 bpsThe Business of Sales80$91.4757065 bps6560552001 2002 2003 2004Sales Per WholesalerCost of Sales*Suite 2001 2002 2003 2004 2005Director 120 120 125 125 85Leaders 70 83 94 98 115Mutual Funds --- --- 27 30 90TotalWholesalers190 203 246 253 290*Includes wholesaling, sales desk, key accounts, sales administration etc.(Cost of Sales in bps*)10

Sales CultureThe Business of SalesCompensation Tied to Sales• Wholesalers 100% Variable• Sales Management 50% to 100% Variable• PLANCO Officers 50%+ Variable• Average Employee 20%+ Variable11

Sales CultureThe Business of SalesFriday Morning Meeting• Every Friday for 28 years• Consistent Message• Entire Company12

Integrated ApproachThe Business of SalesTheModelMeetings/TravelProductDevelopmentAdvancedMarketsFinanceComplianceServiceKey AccountsSalesSupportMarketingTraining13

Integrated ApproachThe Business of SalesHartford’s Product Development• Listen• 5-1• Financial Discipline• “Take Home Test”14

Integrated ApproachThe Business of SalesHartford’s Product DevelopmentNew Product Timeline15

Integrated ApproachThe Business of SalesKey Account Communicationand Coordination• Know Firm Guidelines• Work within thoseguidelines• Long-term Relationships• Align with Firm Initiatives16

Integrated ApproachThe Business of SalesKey Account FA SupportConference CallsTotal of 17,000 Financial Advisors participatingKey Account Visits/Sales DeskTrainingDue Diligence MeetingsTotal of 2,350 Financial Advisors participatingduring 200413417551In-house Training Sessions 6717

Integrated ApproachThe Business of Sales“Value-added” MarketingConsistent Message Literature Fulfillment18

Integrated ApproachThe Business of SalesMarketing Activity per week (2004)Material Orders 11,247Pieces Mailed to FAs 93,360Blast Faxes 23,07619

Closeness to the FieldThe Business of SalesThe Value of Wholesaling1. Identify Sales Opportunities (Cash, Qualified Money,Fixed Income)2. Gather Assets3. Provide Advanced Sales and Marketing Training4. Investment Planning ExpertiseProductDevelopmentServiceClientFinancialAdvisorWholesalerSalesSupportTrainingAdvancedMarketsKeyAccountsMarketing20

Closeness to the FieldThe Business of SalesWholesaling ActivityActivities Leverage FocusSeminarsOffice/RegionalMeetingsB-to-B/WalksCETotalActivities20028,493160,81410,337 1,115180,759200314,490190,10240,7672,717248,076200413,551195,71045,1652,107256,533+42% Growth in Activities from 2002 - 2004Note: Activities include Director suite,Leaders suite and Putnam suite21

Closeness to the FieldThe Business of Sales“The Financial Advisor’s Back Office”per weekInbound Call Volume 10,155Outbound Call Volume 8,985Illustrations 6,034Advanced Markets Call Volume 1,334Service Requests 30222

Closeness to the FieldThe Business of Sales“The Financial Advisor’s Virtual Office”www.hartfordinvestor.com• 97,000 Registrants at Year End• 40% increase over 2003!• In Dalbar’s Top 10• Registrants represent 82% ofAnnuity sales• Registrants represent over 40%of Mutual Fund sales23

UniquenessThe Business of SalesThe Hartford Competitive AdvantagePLANCOInnovativeProducts/FeaturesFinancial AdvisorAward WinningServiceWorld ClassMoney Management24

UniquenessThe Business of SalesResultsDirector VA SuiteLeaders VA SuiteThe HartfordMutual Funds401(k)The Hartford’s flagship variable annuity withover $52.9B in assets (as of 12/31/04)#1 Broker-sold variable annuity in theindustry, 2003-2004*Fastest growing retail-oriented Fund Family toreach $25 billion in assets**14 Best in Class Awards/PLANSPONSORMagazine Annual Defined ContributionSurvey***Hartford Japan $7.79B in Sales as of 12/31/04*Source: VARDS 12/31/04 Sales and Asset Survey**Source: Strategic Insights, 12/04***Source: PLANSPONSOR Magazine, 11/0425

The Business of SalesThis material is intended to provide general information for your consideration and discussion with a qualified advisor. Neither TheHartford nor its agents or employees provide financial, tax, legal, or accounting advice. You should consult a qualified advisor forguidance in these matters.“The Hartford” is The Hartford Financial Services Group, Inc. and its subsidiaries, including the issuing companies of Hartford LifeInsurance Company and Hartford Life and Annuity Insurance Company. You should carefully consider the investment objectives,risks, and charges and expenses of [Variable Annuity Contract] and its underlying funds before investing. This and other informationcan be found in the prospectus for the variable annuity and the prospectuses for the underlying funds, which can be obtained fromyour investment representative or by calling 800-862-6668. Please read them carefully before you invest or send money.The Director suite of variable annuities is issued by Hartford Life and Annuity Insurance Company and by Hartford Life InsuranceCompany and is underwritten and distributed by Hartford Securities Distribution Company, Inc. The prospectus and contract willindicate the appropriate issuing company.Hartford Leaders suite of variable annuities is a flexible premium variable annuity issued by Hartford Life Insurance Company,Simsbury, CT, and Hartford Life and Annuity Insurance Company, Simsbury, CT, and is underwritten and distributed by HartfordSecurities Distribution Company, Inc.Putnam Hartford Capital Manager suite of variable annuities is issued by Hartford Life and Annuity Insurance Company, Simsbury,CT and by Hartford Life Insurance Company, Simsbury, CT and is underwritten and distributed by Hartford Securities DistributionCompany, Inc.You should carefully consider investment objectives, risks, and charges and expenses of [Mutual Fund] before investing. This andother information can be found in the fund's prospectus, which can be obtained from your investment representative or by calling888-843-7824. Please read it carefully before you invest or send money.The Hartford Mutual Funds are underwritten and distributed by Hartford Investment Financial Services, LLC.SMART529 is a program of the Board of Trustees of the West Virginia College Prepaid Tuition and Savings Program, StateTreasurer John Perdue, Chairman. The Board has selected Hartford Life Insurance Company to provide program managementservices for SMART529. West Virginia offers special state tax incentives for West Virginia taxpayers who invest in SMART529. If youare a resident of a state other than West Virginia, before investing in SMART529, you should compare your own state’s qualifiedtuition program and any state tax or other advantages it may provide. You should carefully consider the investment objectives, risks,and charges and expenses of SMART529 and its Underlying Funds before investing. This and other information can be found in theOffering Statement for SMART529 and the prospectuses or other disclosure documents for the Underlying Funds, whichcan be obtained from your investment representative or by calling 866-574-3542. Please read them carefully before you 26invest or send money. SMART529 is distributed by Hartford Securities Distribution Company, Inc. Member SIPC.