The Hartford Says It Will Keep P-C Operations
By DANIEL HAYS
National Underwriter News
May 19, 2009
After qualifying for $3.4 billion in U.S. bailout cash last week, The Hartford said yesterday it will not be selling its property-casualty, group benefits and life insurance businesses.
The company said it would move ahead with the p-c and life businesses as a result of a renewed focus "on our strong portfolio of protection businesses, primarily property and casualty, group benefits and life insurance."
"We will also continue to operate strong wealth management and retirement businesses, including mutual funds, retirement plans and a restructured annuities business," the firm said.
For the first quarter The Hartford reported a net income loss of $1.2 billion, and earlier this month UBS Investment Research said if the firm was looking to raise capital it could probably sell off its p-c operations for $9 billion. But UBS said that was unlikely if the firm obtained government bailout money.
The statement released yesterday by The Hartford Chief Executive Officer Ramani Ayer as a message to Hartford stakeholders noted that the firm is taking steps to restructure its global annuity business and exploring options for its institutional markets group.
Explaining its moves, the message noted that The Hartford in recent months has "experienced a great deal of public speculation about our company and our future direction."
The company acknowledged that "recent overall financial performance has been disappointing and the difficult economic environment has placed significant pressures on some of our businesses."
It added, "While many of our underlying operations are performing well, The Hartford was more affected by the market volatility than some of our peers, given the issues in our investment portfolio and the size of our variable annuities businesses."
The insurer said its board and senior management has done an in-depth evaluation of The Hartford's business model and strategy, "with the goals of building shareholder value, reducing risk and preserving capital. The analysis covered a wide range of options related to our businesses individually and in combination, and focused on required capital, the risks involved, and historical and prospective performance."
The Hartford noted that as a result of its fiscal analysis it had among other things:
"We have concluded that the best way to deliver long-term value to our shareholders is to return to our historical strengths as a U.S.-centric insurance company, with a focus on our strong portfolio of protection businesses ....," wrote Mr. Ayer.
He advised: "Although this has been an incredibly challenging period in our company's history, The Hartford has demonstrated strength and resiliency in the marketplace. We have grown new business premiums in several of our P&C lines while maintaining excellent underwriting results."
Mr. Ayer said further that the company has "grown premiums in group benefits and our retirement plans, and mutual funds businesses have delivered solid deposits in this difficult environment." He said he is "optimistic about our future and know that The Hartford has the people, the commitment and the drive to deliver on our promises to our customers."
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