In the article “Hartford Financial exiting annuity business, will focus on property and casualty insurance,” an Associated Press article in the Washington Post talks about the upcoming changes to Hartford Financial. April 27 of this year will be the final date that Hartford sells new annuity products. During the second quarter, they think they will have $15 to $20 million in annuity business. By leaving the annuity market as well as the life insurance and retirement plan markets, Hartford will greatly cut costs and operate at a lower capital level.
Hartford is hoping to sell their life, retirement plans, and broker-dealer Woodbury Financial Services. They believe that these units will achieve more success with different companies. It’s estimated that they could get between $2 and $3 million selling their individual life, retirement plan, and broker-dealer businesses. Investors in Hartford want to see it focus more on its property and casualty business by moving away from all of the complex business operations with lower returns that are unrelated to property and casualty.
They could see up to $4 billion in new capital through this business change over the next few years. From 2010 to 2011, Hartford’s net income took a drastic dive from $619 million to $127 million. Sales of individual annuities decreased by $10 million from the fourth quarter of 2010 to the fourth quarter of 2011. Last year, Hartford had annuity revenue of $1.84 billion. There are many analysts who believe that the Hartford has made the right move by exiting the annuity business. Hartford Life & Annuity Insurance Co.’s Moody’s rating went from stable to negative, but the parent company retained its stable rating.
Written by Rachel Summit
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