Hartford sells individual annuity capabilities
April 27, 2012 by Mia Lamar
April 26, 2012, 12:48 p.m. EDT
By Mia Lamar
Hartford Financial Services Group Inc. /quotes/zigman/180454/quotes/nls/hig HIG -0.77% struck a deal to sell new business capabilities in its individual annuity operations, part of its plans to radically overhaul its business.
Those plans were first revealed last month when the 200-year-old insurer said it would stop selling variable annuities and put its life-insurance arm up for sale to focus on its property-and-casualty insurance business.
The surprise announcement cames less than two months after hedge-fund manager John Paulson, whose firm, Paulson & Co., is Hartford’s largest shareholder, demanded Hartford “do something drastic” to stem a slide in the stock price.
Under the deal disclosed Thursday with privately held financial services company Forethought Financial Group Inc., Hartford is selling the product management, distribution and marketing units–as well as the suite of products currently being sold–of its individual annuity business.
Hartford will continue to write new annuity products during a transition period and Forethought will assume all expenses and risk for those sales through a reinsurance arrangement. The agreement doesn’t include Hartford’s in-force annuity book of business.
Terms of the deal weren’t disclosed.
Hartford has struggled to recover from a global credit crisis that rattled the company and exposed weaknesses in the way it had hedged against risks at its variable-annuity business, a retirement-savings product the company had helped revolutionize.
Shares were recently off 15 cents at $20.60.