Posted on 04 Mar 2009
Sources are saying that Hartford Financial Services Group Inc., hammered by three credit-rating downgrades and a 72 percent stock drop this year, is in talks to sell most of its unprofitable life insurance unit to Canada’s Sun Life Financial Inc.
Breaking Hartford in two and selling most of the life division, which has $247.9 billion of assets, is among the options being discussed and an agreement may not be reached, said the people, speaking on condition of anonymity. Hartford held separate talks with MetLife Inc. that ended last month, two of the people said.
Hartford Chief Executive Officer Ramani Ayer is being forced to consider a breakup of the 199-year-old insurer after slumping financial markets led to a $2.7 billion loss in 2008. Standard & Poor’s cut the rating to BBB yesterday and said losses at the life unit threaten the other half of the company, which sells property and liability policies.
“The uncertainty of this financial stress could erode Hartford’s brand,” Standard & Poor’s analysts led by Shellie Stoddard said in a statement yesterday. Hartford’s corporate icon, a stag, has been in use since at least 1861.