Good afternoon, The Hartford shareholders. I'm Chris Swift, Chairman and CEO. On behalf of the board, the executive leadership team, and the employees of The Hartford, welcome to our 2018 annual meeting of shareholders. Don Hunt, the company's Corporate Secretary, is secretary of today's meeting. Patricia Hoffman, a representative from Broadridge, is the inspector of the election. She has already taken her oath and reported that we have a quorum for the meeting. The annual meeting of the shareholders of The Hartford is now convened. To begin, let me introduce the members of the board, each of whom, in addition to myself, is standing for election or re-election. Nominees, would you please stand when I call your name? Robert Allardice III, Carlos Dominguez, Trevor Fetter, Steve McGill, Kathryn Mikells, Michael Morris, Thomas Renyi, Julie Richardson, Virginia Ruesterholz, and Greig Woodring. Thank you. You may take your seats.
One additional director standing for election, Teresa Roseborough, is unable to be here in person, but is participating by phone today. It is an honor to partner with these directors, each of whom is committed to representing the best interest of the shareholder and the company. Thank you for your support and continued guidance. In addition to the board, many members of The Hartford's executive leadership team are here today, as well as representatives of Deloitte & Touche, the company's independent auditor. At this time, I'll ask David Robinson, The Hartford's General Counsel, to preside over the business portion of the meeting. Following that portion of the meeting, I have some brief remarks about our company, our strategy, and our financial results. David?
Thank you, Chris. Upon registration, you were provided an agenda and rules of conduct. In order to allow for an orderly meeting and permit sufficient time for any questions, we ask that you abide by these rules. Today, you have three proposals to vote on, the details of which are in the company's proxy statement. We have not received advance notice of any other director nominations or additional proposals for consideration at this meeting, as required by our bylaws. Director nominations are closed, no other proposals can be presented today. I'll list the three proposals, if anyone has a question or comment about them, please raise your hand and wait for a microphone so that people listening to the call can hear the question. Please state your name and identify yourself as a shareholder or shareholder representative before asking your question.
The first matter to be acted upon is to vote on each of the 12 director candidates introduced earlier. Background information on each candidate was provided in the proxy statement. The second matter is the ratification of the appointment of Deloitte & Touche as the company's independent registered public accounting firm for 2018. The third matter is a management proposal to approve on a non-binding advisory basis the compensation of the named executive officers as disclosed in the proxy statement. I now declare the polls open for voting. If you have already voted your proxy, please do not vote again unless you would like to change your vote. If you want to vote now, you need a ballot, please raise your hand and one will be brought to you.
As all shareholders have been given the opportunity to vote, I now declare the polls closed and ask the Inspector of Elections to provide the Corporate Secretary with the results of voting. Don?
Thank you, David. The Inspector of Election has tabulated the votes cast, and based on that report, I declare as follows. First, each director nominee received more for votes than against votes. Therefore, all nominees were elected directors of the company. Second, the ratification of the appointment of Deloitte & Touche as the company's independent registered public accounting firm for 2018 received a majority of the votes cast. Third, shareholders approved on an advisory basis the 2017 compensation of the company's named executive officers as disclosed in the proxy statement.
Thank you, Don. That concludes the business portion of the meeting. Just a few comments before turning the floor back to Chris for an update on The Hartford. Please note the information on the slide. Chris will be making some statements that should be considered forward-looking. Our actual results could differ materially for a number of reasons, including the risks and uncertainties described in the 2017 annual report on Form 10-K and other filings we make with the Securities and Exchange Commission. His presentation will also include certain non-GAAP financial measures. Explanation of these measures are provided in The Hartford's Investor Financial Supplement for the first quarter 2018, available on our investor relations webpage. I'll now turn the meeting back to Chris.
Thank you, David. 2017 was an outstanding year for The Hartford. We delivered strong operating results and executed several important strategic transactions. Although catastrophe losses in the U.S. were historically high, including two major hurricanes and severe wildfires in California, P&C net income was healthy, along with solid increases in both Group Benefits and Mutual Funds. On the strategic side, we were very pleased to acquire Aetna's U.S. life and disability business. The acquisition, which closed in November, offered a unique opportunity to accelerate our strategy for this business. We are now the second-largest Group Benefits company by both sales and in-force business. We believe that our size and scale in Group Benefits, combined with our number two position in workers' compensation, provides us with unmatched competitive advantages. The integration is proceeding smoothly and is on schedule.
In addition to the Aetna acquisition, in December, we announced an agreement to sell our runoff life and annuity operations, which we call Talcott Resolution, for a total value to shareholders of about $2.7 billion, including the retained tax attributes that we'll hold on the balance sheet. We expect the sale to generate about $1.7 billion of cash at closing, which is expected by June 30th, after the Connecticut Insurance Department approves the acquisition by the investor group. Completion of the sale will achieve a long-standing goal to fully exit this business. Finally, our third strategic transaction was the transfer of about one-third of our outstanding pension liabilities to Prudential Financial. The transfer reduced the size of this long-duration liability, which had generated some volatility in our shareholders' equity.
With respect to financial results, despite a competitive market and historically high catastrophe losses, Commercial Lines margins remain strong and in line with our outlook for the year. The underlying combined ratio, which excludes both the impact of catastrophes and prior year development, was 92 for the year, which was up about 2.6 points from 2016, but remains very strong compared to our peer companies. The historically high catastrophes also impacted Personal Lines business. Excluding cats, the underlying combined ratio of 93 was 2.4 points lower than last year due to better auto results. This turnaround is a result of multiple profitability enhancement initiatives that we launched beginning in 2015. We expect additional improvement in 2018. Group Benefits core earnings for the year increased to $234 million, up $30 million from 2016, with a core earnings margin of 5.8%.
Fully insured ongoing premiums increased 14%, which included two months of premium from the acquisition. Excluding that, premiums were up 3%. In Mutual Funds, core earnings rose 41% as a result of higher fees from increased assets under management. The 18% growth in AUM was due to strong market appreciation and positive net flows, supported by continued favorable fund performance compared to our peers. On a consolidated basis, we reported a net loss of $3.1 billion for the year, principally from the loss on sale of Talcott, along with charges from the pension transfer and Tax Reform. Core earnings, which do not include those charges and which demonstrate the underlying profitability of our businesses, were up 11%, while core earnings per diluted share increased by 19%. These are outstanding results reflecting the hard work of our employees and the strength of our franchise.
The cornerstone of our strategy is to put the customer at the center of everything we do. We invest in our businesses to derive profitable growth and long-term shareholder value creation. In particular, we emphasize continued development of new products in underwriting skills, market leading technology in digital capabilities, an investment in talent. We see many new opportunities to differentiate The Hartford in customer value, risk selection, operating efficiencies, and pricing. For instance, in workers' compensation, we see tremendous opportunities to leverage data and our analytic capabilities to manage cost and help people return more quickly to their jobs and their lives. We're applying technology to help address one of society's most urgent challenges, the opioid crisis. 70% of injured workers in the U.S. treated through workers' compensation are prescribed one of these powerful drugs, and many of these individuals are no longer working.
By using data and analytics, we identify injured workers who appear to be at risk of addiction and offer alternative pain management therapies and support so they can return safely to work. Initiatives like these deliver real value for our customers while also contributing to the well-being of our society. How we do business is just as important as what we do. I am very proud of the recognition we receive for our ethics, governance, and compliance practices, gender equality, LGBTQ equality, flexible work options, and our leadership in addressing climate change. Customers, agents, and employees know that we are a brand that they can trust, that we treat people with respect, and that we honor our commitments.
Third-party endorsements from the Ethisphere Institute, Dow Jones Sustainability Index, Bloomberg Financial Services Gender-Equality Index, and the Human Rights Campaign Corporate Equality Index, among others, demonstrate that we are living our values. I'm also grateful to our employees who give their time, talent and generosity as community volunteers to help achieve our five-year goal of making a positive impact in the lives of seven million people by the end of 2020. To conclude, The Hartford had an outstanding 2017 and is off to a strong start in 2018 with momentum in all our businesses, as demonstrated by our first quarter results. I am pleased with our business performance, investment returns, and the strength of our balance sheet. We are well positioned to build on these financial results in our many business initiatives in 2018. I do look forward to updating you on our progress in the future.
Thank you to our employees and agents and brokers for your efforts, to our customers, and to you, our shareholders, for your continued support and confidence. I would be happy to take any questions you might have about our company or financial results. As a reminder, if you have a question, please raise your hand and we'll bring you a microphone. Also, please state your name and identify yourself as a shareholder or a shareholder representative. It's my pleasure to take your questions. How did I know? It's good to see you again.
Thank you, Mr. Chairman. It's good to see you as well. One of my favorite places to be. Mr. Chairman, my name is Marc Okun, and I represent the Carpenters Pension Fund that holds shares in The Hartford Financial Services Group. The Carpenters Pension Funds collectively have assets of $50 billion, and we hold 310,500 shares of The Hartford Financial common stock. Mr. Chairman, I would like to ask two brief questions of the Compensation Committee Chair, Ms. Ruesterh olz. The first relates to the new CEO pay ratio and the other to the recent Tax Act. Will the experience of preparing the CEO pay ratio or the actual CEO ratio calculated affect the committee's future work in setting the executive compensation levels?
Thank you for your question, Marc. How about if I take that question for our Compensation Committee Chair, Virginia, as you said. What I would respond the context of your question on just compensation in general, we are a pay-for-performance organization, a meritocracy, that we want people properly paid, fairly paid based on median data that we benchmark our peers to or other companies in the area nationally. We feel like we have the right philosophy and the right input to determine pay. The pay ratio that you referred to is sort of the aggregation of all the ground-up work we do, and then it's at an aggregate level. It's a data point that we understand. We benchmark that compared to others, but it's not the driving force of how we pay people at various tiers and various functions and at various leadership roles.
Thank you. The second question actually leads into that. With the recent Tax Act amended the Internal Revenue Code to eliminate the tax-favored treatment of performance-based compensation to senior executives, capping the tax deduction at $1 million, will the elimination of the favored tax treatment of performance-based pay prompt the committee to change the amount of compensation awarded in an annual or long-term performance-based incentive plan?
Thank you. I think, as you may know, the 162 rules are still in flux. We don't have final regulations. Philosophically, we want to make sure that we're incenting people for the short term with the cash component we call AIP, and the long term with equity awards that are both performance shares and options or restricted stock. Philosophically, that's not going to change. What will change is any deductibility associated with particularly the short-term cash benefits. Philosophically, we still want to incent people on a performance basis over the longer period of time. Any other questions? If there are no further questions, I want to conclude my prepared remarks by emphasizing that we are confident in our strategy, and we see many opportunities to strengthen our competitive advantage and grow our business.
We are determined to increase value for our shareholders, customers, and distribution partners, we appreciate your interest and support. The meeting is adjourned. Thank you all for coming. I look forward to seeing you next year.