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Yesterday Hartford Financial Services (HIG) had a "special call" to discuss derisking its portfolio. The accompanying slide show starts off with a bullet point saying that "The Hartford's balance sheet is strong," and sprinkles variants of "strong" and "strengthen" liberally throughout the text.

Here are a few numbers to have in mind. Before the crisis the Hartford was a top seller of annuities, especially variable ones. In 2007, according to data from the American Council of Life Insurers, it was ranked second in individual annuities sales, behind MetLife, generating just shy of $15 billion in revenue from annuities sales.

After the Hartford got help from TARP during the crisis, due to problems associated with its variable annuities portfolio, it announced a new strategic plan in March 2010. It announced an intention to be a leader in risk protection and benefits for small businesses and the middle markets, consumer risk protection for affiinities and select segments, and wealth management. It set a target of $5 billion in annuities sales by 2012.

However, according to pruduciton numbers from the Life Insurance Market Research Association, the Hartford was 18th in variable annuities sales through the second quarter of 2010 with $840 million in sales, and wasn't in the top 20 for the same period in 2011, meaning that sales were less than $500 million. Meanwhile, its TARP bunkmates Lincoln and AIG are back to selling lots of VAs.

So the good news may be that the Hartford is not selling more of what's gotten it in trouble in the past -- variable annuities with overgenerous and undermanaged guarantees. The bad news is that it's not selling what it said it was going to.

According to its presentation, the Hartford seems to be doing a great job diminishing the risks associated with its General Account. But at the end of 2010, almost 76% of its assets were in the separate accounts associated with variable products, by far the highest of any major North American insurer.

The Hartford presented evidence yesterday of having strengthened its hedging around its variable products in both North America and Japan. Frankly, I'm not qualified to pronounce judgment on those claims. It says it is "strong." Methinks they might protest too much.

Source: The Hartford Seems Awfully Sure Of Itself