Insurer recounts events and its role in helping city recover from catastrophe HARTFORD, Conn., April 12 /PRNewswire-FirstCall/ -- One hundred years ago this month, one of America's greatest cities lay in ruin, the result of the planet's fragile geology. The Hartford Financial Services Group, Inc. (NYSE: HIG), one of the nation's most enduring names in property and casualty insurance, commemorates the anniversary of the April 18, 1906 earthquake and fire, a tragedy which leveled much of San Francisco and tested the company's long-standing promise to its customers -- that it would be there for them when catastrophe struck. (Logo: http://www.newscom.com/cgi-bin/prnh/20051208/HARTFORDLOGO ) The massive quake and "conflagration," which a major fire was called during that era, still ranks as one of the worst natural disasters to hit a major city in the United States. It caused enormous destruction -- upwards of $7 billion in today's dollars. Some experts predict that if a similar earthquake struck San Francisco today, insured property damage could exceed $50 billion while economic losses could surpass a staggering $100 billion. For many of the nation's insurers, the catastrophe pushed the limits of their financial strength and their ability to pay claims. For The Hartford -- the largest payer of insurance claims after the disaster -- it was a similarly defining moment, and one which the company has documented today in a pictorial slideshow on its website, at http://www.thehartford.com/history/1906sfearthquake. Flashback -- The Hartford Before the Quake By the end of the 19th century, Hartford Fire Insurance Company, as The Hartford was then known, was approaching its own centennial anniversary and building a reputation as one of the country's most stable and dependable fire insurers. Just 35 years earlier, the company had shown strength and commitment to customers in response to the 1871 Chicago fire -- the most notorious urban blaze of that century. It had done the same in 1835 after the great New York City conflagration destroyed the financial district. "Both of those catastrophes were critical moments in our history that helped define the reputation of The Hartford," said Ramani Ayer, chairman, president and CEO of The Hartford, reflecting on the company's nearly 200-year-old history. "For example, after Chicago, 68 of the 202 insurance companies that incurred losses failed immediately, while 83 others couldn't pay their claims in full. But The Hartford promptly paid all of its claims, earning the company respect across the nation." With respect to the Chicago fire, one insurance publication at the time referred to The Hartford's response as "the best piece of insurance adjustment and payment ever executed in this country." Moving into the 20th century, this reputation helped the company flourish. In addition to its Hartford, Conn.-based home office, the company opened regional departments across the country, including a thriving office at 313 California St. in San Francisco. This office was responsible for an expanding business throughout the Rocky Mountains and Pacific Coast, as the American population increasingly headed west. "The success of The Hartford's San Francisco office paralleled the growth and prosperity in the Bay area and the entire west coast," noted Ayer. "However, despite knowing their region was subject to earth tremors, most residents in 1906 had no idea what kind of damage a major quake could do to the many wooden homes and un-reinforced brick buildings in their city." All that would change in a matter of seconds. The Great Quake and its Aftermath Shortly after 5:00 a.m. on Wednesday, April 18, 1906, residents of the Bay area were jolted awake by a massive earthquake lasting 45 to 60 seconds. While the quake's powerful epicenter was located near the city, its violent shocks could be felt all along the coast, from Oregon to southern California, and as far inland as central Nevada. Experts estimate that the quake reached a magnitude of 8.3 on the Richter scale, or 7.9 on the modern "moment-magnitude" scale, a force equivalent to the detonation of over 1 billion tons of the chemical explosive TNT and nearly 30 times stronger than the quake that shook the Bay area in 1989. It also ignited dozens of fires which raged out of control for three days, compounding the initial damage and destroying more property than the quake itself. Many of these fires were caused by ruptured gas mains, downed power lines and broken chimney flues throughout the city. Others were ignited by campfires set by the many residents who were left homeless. No matter how these individual fires started, they spread across the thousands of closely-spaced wooden Victorian dwellings, which rapidly fueled the flames. Overwhelmed fire companies could do little to fight them since many of the city's water mains were also severed. By the time the blazes were finally contained, San Francisco, known in 1906 as the "Paris of the West," was reduced to a tent city. It suffered an unprecedented amount of physical and financial damage, including: * Approximately 3,000 deaths and 225,000 injuries in and around the Bay area. * The destruction of nearly 500 city blocks -- roughly a 4.7 square mile area from the downtown core to the docks of San Francisco Bay. * More than 28,000 buildings leveled to the ground. * More than half of San Francisco's population (approximately 400,000 residents in 1906) left homeless. * Over $400 million in property damage (upwards of $7 billion today) of which $225 million ($4 billion today) was insured. * Approximately $80 million in damage caused by the quake, and the remainder caused by the fires. The Hartford Responds Within several hours after the quake struck, the building occupied by The Hartford was completely destroyed by flames. The Hartford's city agent and general adjuster, a San Francisco resident named Adam Gilliland, raced to the scene but was unable to save important company records. In the aftermath, the only documents from The Hartford's San Francisco office that survived the catastrophe were a series of maps, charred but legible, which were stored in a basement vault and contained some basic notation of policies and their locations. "In the true spirit of The Hartford, Gilliland brought those vital maps back to his home on Broderick Street, a safe distance from the city center, and set up a temporary office to begin adjusting and settling claims with his colleagues," noted Ayer. "Eventually, they moved from his home to another location within the city, and completed one of the most challenging claims adjustments in the company's then 96-year history." The Hartford's president at the time, George Chase, who had been serving in that position since before the Chicago fire, issued a statement to the company's independent agents and customers. His message reaffirmed The Hartford's long-standing record of trust, strength and good faith in times of crisis, as it had done after earlier urban fires: "Whatever losses may have been incurred by The Hartford will be honorably adjusted and promptly paid, and the record established at Chicago, Boston and Baltimore will remain unbroken." Based on the memory of adjusters and the written notes of policyholders, many of whose property and official papers were destroyed, The Hartford worked diligently to settle 4,972 customer claims, which amounted to a total of $11.6 million, or over $200 million today. This was the largest sum paid by any insurance company after the San Francisco disaster. Many of these claims, including a $100,000 policy with the J. A. Folgers & Co. coffee company, were paid in full without any documentation based on the honest recollection of The Hartford's agents. Beyond San Francisco While damage was much greater in San Francisco than in Chicago after the great fire, only 20 of 243 insurance companies failed as a result of the 1906 tragedy. This was an indication that the industry, through better management and improved underwriting, had become more stable in the course of 35 years. One year after the tragedy, an insurance adjuster named J. J. Purcell, wrote an essay, reflecting on his experience and enormous pride working for The Hartford: "In contemplation of the San Francisco disaster and its ramifications, that which gives me the most satisfaction and makes me proud of the company for which I labored, was the simple instruction from its officials to 'adjust each claim on its merits and pay.'" The abundance of research from the 1906 quake prompted advances in seismology, the study of fault systems in this country and, years later, contributed to the growing study of plate tectonics, which analyzes the shifting of the earth's crust. Along with the emergence of modern catastrophe risk modeling, insurance companies are now able to better manage the risks associated with earthquakes, which helps guide their underwriting and policy-making decisions. Today, The Hartford also helps its customers and commercial risk managers prepare for earthquakes and mitigate their potential exposures in a number of ways, such as making better land use decisions, complying with building codes and providing guidance on retrofitting structures to deal with this very real risk. The Hartford's Loss Control experts also are able to provide tools to assist commercial customers in creating a disaster recovery plan for their businesses. "Whether a catastrophe today is caused by a natural event, like an earthquake or hurricane, by a tragic fire or by a man-made act of terror, The Hartford is in the business of protecting its customers and their property with the best insurance and services possible, and helping them recover when they need us most," said Ayer. "The scrupulous claims payment and devotion we demonstrated in 1906 is still at the core of our business, and we remain as committed to policyholders in 2006 as we were one hundred years ago." The Hartford, a Fortune 100 company, is one of the nation's largest financial services and insurance companies, with 2005 revenues of $27.1 billion. The Hartford is a leading provider of investment products, life insurance and group benefits; automobile and homeowners products; and business property and casualty insurance. International operations are located in Japan, Brazil and the United Kingdom. The Hartford's Internet address is http://www.thehartford.com/. Some of the statements in this release should be considered forward- looking statements as defined in the Private Securities Litigation Reform Act of 1995. These include statements about our future results of operations. 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 2005 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. Contacts: Joe Loparco 860-547-3397 Debora Raymond 860-547-9613 http://www.newscom.com/cgi-bin/prnh/20051208/HARTFORDLOGO http://photoarchive.ap.org/ DATASOURCE: The Hartford Financial Services Group, Inc. CONTACT: Joe Loparco, +1-860-547-3397, , or Debora Raymond, +1-860-547-9613, , both of The Hartford Web site: http://www.thehartford.com/

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