Running off the variable annuity business is compressing returns, but The Hartford has a high-quality P&C business.
The Hartford still has room for further restructuring efforts, including operating expense reductions and possibly a sale of additional components of the runoff operations and/or the Group Benefits business.
Between a fair value of $38 (excess returns) and $42 (ROE-based P/BV), I believe The Hartford is still underappreciated by the Street and a strategic buyout could be possible.
Prudential (PRU) closes on its purchase of Hartford's (HIG) Individual Life Insurance business 3 months after the initial announcement. The transaction consists of Prudential paying $615M to Hartford and reinsuring about 700K of its life insurance policies with face amount of approximately $135B. (PR)
AIG closes on its purchase of Hartford Financial's (HIG) brokerage unit - Woodbury Financial Services. For Hartford, it's another step towards refocusing on its core business. For AIG, the company ups its financial advisers and AUM by about 25% each, to 6K and $125B, respectively. (PR)
A deal for Prudential (PRU +0.8%) to buy Hartford's (HIG +2.4%) individual life-insurance business for about $1B could be inked as soon as today, reports the WSJ. The sale would be another step in Hartford's narrowing of its focus to property-casualty and group-benefits insurance, not to mention the vanishing of its once-booming (but eventually disastrous) variable annuity business.
Hartford Financial (HIG) sells its Retirement Plans business to Mass Mutual for $400M as it continues to try and refocus the company back on its core property-casualty insurance underwriting business (as demanded by at least one large shareholder, John Paulson) (PR)
AIG (AIG -1.8%) reportedly is negotiating to buy the Woodbury independent broker-dealer business from Hartford (HIG -1.9%), an insurance rival that's divesting several businesses. The possible transaction comes as Hartford has faced criticism from big shareholder John Paulson, which over the past year has demanded HIG take action to improve its stock price.
John Paulson may want Hartford (HIG -3.7%) to spin off its property-casualty arm, but former top New Jersey insurance regulator Tom Considine notes that such a decision can't be made without regulatory input. Spinning off property-casualty and leaving a “less vibrant part behind would be closely scrutinized,” he says, adding, "Approval would be unlikely in this environment."
Hartford Financial Services Group Inc is an insurance & financial services Company. Its business segments includings Property & Casualty Commercial, Consumer Markets, Property & Casualty Other Operations, Group Benefits, and Mutual Funds.