A.M. Best has commented that the ratings of The Hartford Financial Services Group, Inc. (The Hartford) (Hartford, CT) (NYSE:HIG) and its subsidiaries will remain unchanged following the recent announcement that it has signed a definitive agreement to sell 100% of the outstanding shares of its Japanese subsidiary, Hartford Life Insurance K.K., (HLIKK) to ORIX Life Insurance Corporation (ORIX LIC), a subsidiary of ORIX Corporation (ORIX) (Tokyo, Japan).
This transaction eliminates The Hartford’s Japanese variable and fixed annuity exposure with the exception of a reinsurance agreement covering $1.1 billion fixed payout annuity reserves. The sale is expected to close in July 2014, subject to regulatory approvals. The announced transaction remains consistent with The Hartford’s strategy to focus on its property/casualty, group benefits and mutual funds businesses that it has been executing on over the past two years.
The sale is expected to generate a GAAP loss but provide capital benefits from the reduction of risk associated with the Japanese business. In addition, with the exception of the fixed payout annuity treaty, all reinsurance agreements between HLIKK and The Hartford’s U.S. life operations will be terminated. A.M. Best will continue to monitor the retained U.S. variable annuity block, review ongoing stress testing analysis and discuss with management its future capital management plans, including planned utilization of sales proceeds.
The methodology used in determining these ratings is Best’s Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com. Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts