Businessmodel of The Hartford

Customer Segments

The Hartford has a segmented market business model, with customer groups that have slightly different needs. The company targets its offerings at individuals and businesses.

Value Proposition

The Hartford offers four primary value propositions: accessibility, innovation, performance, and brand/status.

The company creates accessibility by providing a wide variety of options. It offers a broad range of products, including auto and homeowners’ insurance, business insurance (including property, auto, workers’ compensation,  and general and professional liability), employee benefits (including life & accident, disability, and retiree health), and mutual funds.

The company has embraced innovation throughout its history. It was the first insurance provider to offer a dedicated small business service center. Following that, it became the only insurance company to provide auto and home insurance to members of AARP. Later, it was the first insurance firm to write a policy for an institution of higher learning, Yale University.

The company demonstrates strong performance through tangible results. It claims to have the best Total Shareholder Return (TSR) in the industry.

The company has established a powerful brand due to its success. In its early history it insured several prominent people and places, including famed baseball player Babe Ruth, President Dwight D. Eisenhower, the Hoover Dam, the St. Lawrence Seaway, and the Golden Gate Bridge. It has also paid claims associated with some of the U.S.‘s largest disasters, including Hurricane Katrina, Storm Sandy, and the September 11th attacks.

It serves over one million small businesses, and has achieved several rankings, including #4 commercial multi-peril carrier based on direct written premiums, #2 workers’ compensation insurer based on direct written premiums, a #7 ranking in the P&C commercial insurance category, a #11 ranking in the total personal lines category, and a #3 ranking in the fully insured disability in force category. It maintains high financial strength rankings from Moody’s, Standard & Poor’s, and A.M. Best. Lastly, it has won many honors, including the following:

• Recognition as one of the World’s Most Ethical Companies by the Ethisphere Institute (2008-2012 and 2014-2016)
• The Climate Leadership Award from the U.S. Environmental Protection Agency (2014-2015)
• Ranking on the Carbon Performance Leadership Index by the Carbon Disclosure Project (2008-2015)
• Recognition as one of Barron’s Best Fund Families of 2015 for Hartford Mutual Funds ### Channels

The Hartford’s main channel is its network of independent agents, brokers, and wholesalers. The company promotes its offering through its website, social media pages, TV/online/magazine advertising, direct mail, and sponsorship of sporting events such as the U.S. Paralympics.

Customer Relationships

The Hartford’s customer relationship is primarily of a self-service, automated nature. Customers utilize its products and services while having limited interaction with employees. The company’s website enables customers to maintain an online account through which they can view their policies and claims statuses and pay their bills.

The site also has a feature that enables users to find an agent, and a “Catastrophe Information Center“ that provides information on how to prepare for various types of natural disasters (earthquakes, floods, hurricanes, tornadoes, etc.). That said, there is a personal assistance component in the form of phone and e-mail support.

Key Activities

The Hartford’s business model entails designing, developing, and delivering its investment and insurance products and services for customers.

Key Partners

The Hartford’s key partners are the distribution partners that help it sell its products and services.

Key Resources

The Hartford’s main resources are its human resources, namely the insurance industry experts that design and develop its products and services and the customer service professionals that provide support.

Cost Structure

The Hartford has a cost-driven structure, aiming to minimize expenses through significant automation. Its biggest cost driver is likely cost of insurance benefits provided. Other major drivers are in the areas of sales/marketing and administration, both fixed costs.

Revenue Streams

The Hartford has two revenue streams: revenues generated from fee income and revenues generated from net investment income.