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The Hartford Agrees to Sell U.K. Variable Annuity Business to Berkshire Hathaway

Posted on 27 Jun 2013 by Neilson

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Hartford annuity saleThe Hartford has signed a definitive agreement to sell its subsidiary, Hartford Life International Limited, in a cash transaction to Columbia Insurance Company, a Berkshire Hathaway company, for approximately $285 million. At closing, HLIL's sole asset will be its subsidiary, Hartford Life Limited, a Dublin-based company that sold variable annuities in the U.K. from 2005 to 2009.

"The Hartford has made significant progress reducing the size and risk of Talcott Resolution's legacy variable annuity blocks and the business unit is now self-sufficient from a capital perspective," said Christopher J. Swift, executive vice president and chief financial officer for The Hartford. "Selling the U.K. business is another meaningful step forward. We are pleased with the outcome of the competitive bidding process, which reflects our criteria of executing transactions on terms that are attractive to The Hartford."

The purchase price is roughly equal to HLL's statutory surplus (calculated under Irish accounting standards) as of March 31, 2013, and is expected to reduce U.S. statutory surplus by approximately $150 million in the second quarter of 2013. In addition, the transaction is expected to result in a net loss of approximately $110 million, after-tax (calculated under U.S. GAAP), in the second quarter of 2013.

The agreement, which is subject to customary closing conditions and regulatory approvals, is expected to close by the end of the year. The Hartford's financial advisor for this transaction is Deutsche Bank, and the company's legal advisor is Sidley Austin LLP.