The Hartford to Sell Two Divisions, Discontinue Annuities

The Hartford announced Wednesday that it will pursue the sale of several divisions and discontinue its variable-annuity business in April.

The company said it will focus on its property and casualty, group benefits, and mutual funds businesses and break off from its less sustainable properties after a "rigorous evaluation of the company's strategy and business portfolio."

The move to downsize the company would effect hundreds of workers at the company's Simsbury campus, according to the Hartford Courant.

The Hartford announced that it would cease the individual annuity business and pursue sales or other alternatives for Individual Life, Woodbury Financial Services and Retirement Plans, according to a press release from The Hartford Financial Services Group.

"The Hartford's sharper focus will lead to an organization that, over time, will be positioned for higher returns on equity, reduced sensitivity to capital markets, a lower cost of capital and increased financial flexibility," The Hartford Chairman, President and CEO Liam E. McGee said. "With this portfolio and the actions we are taking, we are on the right path to unlock value and deliver superior, long-term returns for shareholders."

The Hartford did not indicate how many workers would be impacted by the decision to downsize the business.

Annuity sales will cease on April 27 and the company expects an after-tax charge of $15 million to $20 million in the second quarter of 2012. The Hartford expects the action to reduce operating costs by $100 million starting in 2013, according to a press release.

"The actions announced today will allow us to build on our strong financial foundation by concentrating our resources on a smaller number of businesses to position The Hartford for long-term success," The Hartford Executive Vice President and CFO Christopher J. Swift said. "Individual Life, Woodbury Financial Services and Retirement Plans are strong businesses with distinct market positions and talented employees, but they do not align with our go-forward focus."

Swift said the divisions will be better positioned for success with other organizations but the company intends to honor its commitments to policyholders.