US – Hartford sells its life unit to Prudential
Hartford Financial Services Group Inc. agreed to sell its life-insurance unit to Prudential Financial Inc. as chief executive officer Liam McGee divests units to narrow his company’s focus.
Prudential, the second-largest U.S. life insurer will make USD 615 million cash payment as part of the agreement, which is structured as a reinsurance deal.
McGee is now focusing on propertycasualty coverage, such as commercial insurance and auto policies, after reaching deals this year to sell Hartford’s broker-dealer, retirementplans business and individual-annuities distribution unit.
“Our core competency is not managing interest-rate bets, equitymarket bets or foreign exchange,” McGee said in an interview before the announcement. “Shareholders aren’t going to pay us for managing those risks.”
Hartford said it would turn over about USD 7 billion of general account assets to help cover obligations. The transaction is expected to be completed early next year, and will cover about 700,000 policies with a face amount of approximately USD 135 billion, said Prudential in its statement.
The cumulative capital benefit from the life, retirement and brokerdealer sales is about USD 2.2 billion, according to Hartford’s statement.
McGee said before the deal was announced that he might use the capital for buybacks or to pay down debt.
Prudential CEO John Strangfeld said: “The deal will create an organization with greater scale, enhanced product offerings and expanded distribution expertise.”
Hartford said its employees at the individual-life unit would be offered positions with Prudential. After the deal, the benefits and provisions of Hartford’s life insurance contracts will remain in place.
LIAM MCGEE, CEO, HARTFORD FINANCIAL SERVICES GROUP
