A.M. Best Comments on The Closure of The Hartford’s Sale of Its Individual Life Insurance and Retirement Plans Businesses

  A.M. Best Comments on The Closure of The Hartford’s Sale of Its Individual
  Life Insurance and Retirement Plans Businesses

Business Wire

OLDWICK, N.J. -- January 3, 2013

A.M. Best Co. has commented that the ratings of The Hartford Financial
Services Group, Inc. (The Hartford) (Hartford, CT) [NYSE: HIG] and its
property/casualty subsidiaries will remain under review with developing
implications, and the ratings of its life subsidiaries will remain under
review with negative implications following the recent announcement that The
Hartford has closed on the previously announced sale of its retirement plans
business to Massachusetts Mutual Life Insurance Company (MassMutual)
(Springfield, MA) and its individual life business to Prudential Financial,
Inc. (Prudential) (Newark, NJ) [NYSE: PRU], as well as its individual annuity
new business capabilities to Forethought Financial Group, Inc. (headquartered
in Houston, TX). The closure of The Hartford’s sale of Woodbury Financial to
American International Group, Inc. (New York, NY) was announced in December
2012.

The completion of these transactions is consistent with The Hartford’s
strategy to refocus on its property/casualty, group benefits and mutual funds
businesses, as outlined by management in early 2012. With the close of these
transactions, The Hartford has successfully executed its announced
restructuring and will move forward with a strategy centered on those core
businesses. Management anticipates $2.2 billion of statutory capital benefit
from these transactions, including both increased surplus at the U.S. life
operations and reduced risk-based capital requirements for those businesses.

While the closure of these transactions is a key step in The Hartford’s
transformation to a primarily property/casualty oriented business, the under
review status will remain pending further review of management’s capital
plans, including planned utilization of sales proceeds and potential dividends
to be upstreamed from the life operations, as well as a stress analysis of the
run-off variable annuity business that is being retained by The Hartford.

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. Key criteria utilized include: “Understanding BCAR for
Property/Casualty Insurers”; “Understanding Universal BCAR”; “Analyzing
Commercial Paper Programs”; “Catastrophe Analysis in A.M. Best Ratings”;
“Equity Credit for Hybrid Securities”; “Insurance Holding Company and Debt
Ratings”; “Rating Members of Insurance Groups”; “Rating Natural Catastrophe
Bonds”; “Risk Management and the Rating Process for Insurance Companies”; and
“The Treatment of Terrorism Risk in the Rating Evaluation.” Best’s Credit
Rating Methodology can be found at www.ambest.com/ratings/methodology.

Founded in 1899, 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 © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contact:

A.M. Best
Colleene Parodi—L/H, 908-439-2200, ext. 5095
Senior Financial Analyst
colleene.parodi@ambest.com
or
Gordon McLean—P/C, 908-439-2200, ext. 5304
Senior Financial Analyst
gordon.mclean@ambest.com
or
Rachelle Morrow, 908-439-2200, ext. 5378
Senior Manager, Public Relations
rachelle.morrow@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com
 
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