We would love to hear from you. Click on the ‘Contact Us’ link to the right and choose your favorite way to reach-out!

wscdsdc

media/speaking contact

Jamie Johnson

business contact

Victoria Peterson

Contact Us

855.ask.wink

Close [x]
pattern

Industry News

Categories

  • Industry Articles (17,774)
  • Industry Conferences (3)
  • Industry Job Openings (3)
  • Moore on the Market (207)
  • Negative Media (139)
  • Positive Media (73)
  • Sheryl's Articles (656)
  • Wink's Articles (265)
  • Wink's Inside Story (238)
  • Wink's Press Releases (99)
  • Blog Archives

  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014
  • February 2014
  • January 2014
  • December 2013
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • May 2013
  • April 2013
  • March 2013
  • February 2013
  • January 2013
  • December 2012
  • November 2012
  • October 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • May 2012
  • April 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • November 2011
  • October 2011
  • September 2011
  • August 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010
  • June 2010
  • May 2010
  • April 2010
  • March 2010
  • February 2010
  • January 2010
  • December 2009
  • November 2009
  • October 2009
  • August 2009
  • June 2009
  • May 2009
  • April 2009
  • March 2009
  • November 2008
  • May 2008
  • February 2008
  • August 2006
  • Hartford to Exit Annuity Business, Fitch Affirms Rating

    March 24, 2012 by Brian Schneider

    March 21, 2012

    Business Wire, Inc.

    CHICAGO–(BUSINESS WIRE)– Fitch Ratings has affirmed all Issuer Default Ratings (IDRs), debt and Insurer Financial Strength (IFS) ratings for the Hartford Financial Services Group, Inc. (HFSG) and its primary life and property/casualty insurance subsidiaries. The Rating Outlook is Stable. A full list of ratings appears at the end of this release.

    Fitch’s rating action follows HFSG’s announcement today that going forward the company will focus on property/casualty commercial and consumer markets, group benefits, and mutual funds businesses. As such, individual annuity will be placed into run off and HFSG will pursue divestiture options for individual life,Woodbury Financial Servicesand retirement plans.

    Fitch already maintains separate IFS ratings on HFSG’s life and property/casualty companies that reflect each businesses respective stand-alone financial profiles. HFSG’s life insurance subsidiaries maintain ‘A-‘ IFS ratings, which are two notches below the property/casualty IFS ratings of ‘A+’. This approach was implemented inFebruary 2009during the financial crisis to reflect the divergence in operating performance and balance sheet strength between the life and p/c operations.

    HFSG’s strategic announcement today does not significantly change Fitch’s assessment of the life and property/casualty operating companies’ financial strength. Fitch expects that HFSG will continue to support its insurance subsidiaries and maintain insurance company capitalization that is consistent with the current ratings, with HFSG not expected to sell any insurance operating companies as part of any divestiture of businesses. While the plan creates execution risk and has the potential to impact HFSG’s business position and franchise value of its ongoing businesses, Fitch considers these risks to be manageable.

    Favorably, a successful execution of HFSG’s strategy could improve the company’s financial flexibility, particularly to the extent that sales proceeds increase holding company cash, fixed maturities, and short-term investments (approximately$1.6 billionatDec. 31, 2011) that could potentially be used to reduce debt. As such, Fitch would most likely consider a positive rating action on HFSG’s IDR and debt ratings before the company’s IFS ratings, reflecting an improvement in notching between insurance company ratings and holding company ratings.

    Fitch’s rationale for the affirmation of HFSG’s ratings reflects the company’s overall profitable results, reasonable financial leverage and sizable levels of holding company cash and financial resources. The ratings also reflect HFSG’s lower level of recent investment related impairments and exposure to credit and investment risks, particularly in its life asset portfolio where its above-average exposure to commercial real estate-related investments is declining.

    HFSG’s capital position improved in 2011, with GAAP shareholders’ equity of$22.9 billionatDec. 31, 2011, up 13% from$20.3 billionatDec. 31, 2010. HFSG’s equity credit-adjusted debt-to-total capital ratio (including accumulated other comprehensive income) remains reasonable at 21.3% at

    Dec. 31, 2011, down from 24.5% atDec. 31, 2010.

    HFSG’s operating earnings-based interest and preferred dividend coverage has been reduced in recent years, averaging a low 3.4x from 2008 to 2011. This reflects both constrained operating earnings and increased interest expense and preferred dividends paid on capital over the last several years, including the outstanding$1.75 billion10% junior subordinated debentures investment by Allianz SE inOct. 2008. Fitch expects the company to maintain run-rate operating earnings-based interest and preferred dividend coverage of at least 5.0x.

    The ratings for Hartford Life’s operations reflect an adequate U.S. consolidated statutory capital position. While capital generation is expected to remain flat through 2012, Fitch expects consolidated U.S. life insurance to remain above the company’s 325% RBC targets for its life operations and 125% for its captive operations.

    The key rating triggers that could result in an upgrade include strong and stable operating earnings in line with higher rated peers and industry averages; Fitch’s determination that investment and VA risk will not cause a material level of volatility relative to current capital; overall flat-to-favorable loss reserve development; continued improvement in the quality and liquidity of the investment portfolio; equity credit-adjusted debt to total capital maintained below 25%; and reduced volatility of insurance subsidiary capitalization.

    The key rating triggers that could result in a downgrade include significant investment or operating losses, including those from the VA business line, that affect GAAP shareholders’ equity by 20% or more, or materially affect capital within the insurance subsidiaries; sizable adverse prior year loss reserve development; and equity credit-adjusted debt-to-total capital maintained above 30%. The ratings of the property/casualty subsidiaries could also be negatively affected to the extent they are needed to fund potential capital needs of the life operations.

    Fitch affirms the following ratings with a Stable Outlook:

    Hartford Financial Services Group, Inc.

    –Long-term IDR at ‘BBB’;

    –$320 million4.625% notes due 2013 at ‘BBB-‘;

    –$200 million4.75% notes due 2014 at ‘BBB-‘;

    –$300 million4.0% senior notes due 2015 at ‘BBB-‘;

    –$200 million7.3% notes due 2015 at ‘BBB-‘;

    –$300 million5.5% notes due 2016 at ‘BBB-‘;

    –$499 million5.375% notes due 2017 at ‘BBB-‘;

    –$500 million6.3% notes due 2018 at ‘BBB-‘;

    –$500 million6% notes due 2019 at ‘BBB-‘;

    –$499 million5.5% senior notes due 2020 at ‘BBB-‘;

    –$298 million5.95% notes due 2036 at ‘BBB-‘;

    –$299 million6.625% senior notes due 2040 at ‘BBB-‘;

    –$325 million6.1% notes due 2041 at ‘BBB-‘;

    –$500 million8.125% junior subordinated debentures due 2068 at ‘BB’;

    –$1.75 billion10% junior subordinated debentures due 2068 at ‘BB’;

    –$556 million7.25% mandatory convertible preferred stock, series F at ‘BB’;

    –Short-term IDR at ‘F2’;

    –Commercial paper at ‘F2’.

    Hartford Life, Inc.

    –Long-term IDR at ‘BBB’;

    –$149 million7.65% notes due 2027 at ‘BBB-‘;

    –$92 million7.375% notes due 2031 at ‘BBB-‘;

    –Short-term IDR at ‘F2’.

    Hartford Life Global Funding

    –Secured notes program at ‘A-‘.

    Hartford Life Institutional Funding

    –Secured notes program at ‘A-‘.

    Hartford Life and Accident Insurance Company

    –IFS at ‘A-‘.

    Hartford Life Insurance Company

    –IFS at ‘A-‘;

    –Medium-term note program at ‘BBB+’.

    Hartford Life and Annuity Insurance Company

    –IFS at ‘A-‘.

    Members of theHartford Fire Insurance Intercompany Pool:

    Hartford Fire Insurance Company

    Nutmeg Insurance Company

    Hartford Accident & Indemnity Company

    Hartford Casualty Insurance Company

    Twin City Fire Insurance Company

    Pacific Insurance Company, Limited

    Property and Casualty Insurance CompanyofHartford

    Sentinel Insurance Company, Ltd.

    Hartford Insurance Company ofIllinois

    Hartford Insurance Companyof the Midwest

    Hartford Underwriters Insurance Company

    Hartford Insurance Companyof the Southeast

    Hartford Lloyd’sInsurance Company

    Trumbull Insurance Company

    –IFS at ‘A+’.

    Additional information is available at ‘www.fitchratings.com‘. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

    Applicable Criteria and Related Research:

    –Insurance Rating Methodology (Sept. 22, 2011).

    Applicable Criteria and Related Research:

    Insurance Rating Methodology

    http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=651018

    ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM‘. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE.

     

    Fitch Ratings
    Primary Analyst
    Brian C. Schneider, CPA, CPCU, ARe
    Senior Director
    +1-312-606-2321
    Fitch, Inc.
    70 W. Madison Street
    Chicago, IL 60602
    or
    Secondary Analyst
    R. Andrew Davidson, CFA
    Senior Director
    +1-312-368-3144
    or
    Committee Chairperson
    Julie A. Burke, CPA, CFA
    Managing Director
    +1-312-368-3158
    or
    Media Relations:
    Brian Bertsch, +1-212-908-0549 (New York)
    brian.bertsch@fitchratings.com

     

    Source: Fitch Ratings

    Copyright: 

    Copyright Business Wire 2012

    Wordcount: 

    1207

    Originally Posted at AnnuityNews on March 21, 2012 by Brian Schneider.

    Categories: Industry Articles
    currency