The Hartford To Sell Japan Annuity Company HLIKK To ORIX Life Insurance Corporation For $895 Million

  The Hartford To Sell Japan Annuity Company HLIKK To ORIX Life Insurance
  Corporation For $895 Million

  *Estimated pro forma capital benefit of $1.4 billion at March 31, 2014
  *Permanently eliminates The Hartford’s Japan variable annuity risk
  *Marks significant accomplishment in The Hartford’s transformation

Business Wire

HARTFORD, Conn. -- April 28, 2014

The Hartford today announced it has entered into a definitive agreement with
ORIX Life Insurance Corporation, a subsidiary of ORIX Corporation, to sell 100
percent of the outstanding shares of Hartford Life Insurance K.K. (“HLIKK”),
The Hartford’s wholly-owned Japanese annuity subsidiary.

“Today’s announcement is a significant accomplishment in our efforts to
transform The Hartford and create value for shareholders,” said The Hartford's
Chairman, President and CEO Liam E. McGee. “This transaction materially
reduces The Hartford’s risk profile by permanently eliminating the company’s
Japan variable annuity risk. We are pleased with the economics of the
transaction, both in terms of purchase price and expected capital benefit. In
addition, ORIX Life Insurance Corporation is a financially strong,
well-respected, diversified Japanese financial services company that will
continue to provide high-quality service to our Japanese customers.”

Concurrent with closing, all reinsurance agreements between HLIKK and The
Hartford’s U.S. life insurance subsidiaries will terminate, with the exception
of an agreement covering about $1.1 billion of fixed payout annuity reserves.
The transaction is expected to be approved by the Japanese Financial Services
Agency and, subject to other customary closing conditions, to close in July

The Hartford estimates that the March 31, 2014, pro forma effect of the
transaction is a U.S. GAAP loss of approximately $675 million and a U.S. life
statutory surplus loss of approximately $275 million. The company estimates a
March 31, 2014, pro forma capital benefit from this transaction of
approximately $1.4 billion.The estimated capital benefit includes the net
sales proceeds of approximately $860 million, after-tax, and an estimated
reduction in capital required in the company’s U.S. life insurance
subsidiaries of approximately $540 million due to the termination of certain
reinsurance agreements.

“This transaction is another step in The Hartford’s transformation which
increases the company’s financial flexibility, and meaningfully decreases our
market risk and net income volatility,” said The Hartford’s Chief Financial
Officer Christopher J. Swift. “We will continue to execute our current
2014-2015 capital management plan. After closing, we will provide an update on
incremental capital management actions that we will take as a result of this

The final purchase price and associated financial impacts and capital benefit
are subject to adjustment based primarily on the effect of changes in equity,
fixed income and foreign currency market indices on the fair value of
liabilities until date of close, and could differ materially from the
estimates. Accordingly, The Hartford will continue to hedge its Japan variable
annuity risks until closing.

The expected loss on sale and the results of operations of HLIKK prior to
closing of the transaction will be reported as discontinued operations
beginning in the second quarter of 2014.As discontinued operations, the
results of operations of HLIKK will be excluded from income from continuing
operations and from core earnings, a non-GAAP financial measure, for all
periods presented in the financial statements.

HLIKK wrote annuity contracts for the Japan market from 2000 through 2009,
when The Hartford placed its Japan annuity business into runoff. As of Dec.
31, 2013, Japan account values were $23 billion for 375,000 contracts. On
close of the deal, all 150 HLIKK employees in Japan will remain employees of

Deutsche Bank served as financial advisor and Sidley Austin LLP served as
legal advisor to The Hartford. Additional information regarding the
transaction can be found on The Hartford’s website at and in a Current Report on Form 8-K to be filed
today with the Securities and Exchange Commission.

About The Hartford

With more than 200 years of expertise, The Hartford (NYSE:HIG) is a leader in
property and casualty insurance, group benefits and mutual funds. The company
is widely recognized for its service excellence, sustainability practices,
trust and integrity. More information on the company and its financial
performance is available at Join us on Facebook at Follow us on Twitter at


Some of the statements in this release may be considered forward-looking
statements as defined in the Private Securities Litigation Reform Act of 1995.
We caution investors that these forward-looking statements are not guarantees
of future performance, and actual results may differ materially. Investors
should consider the important risks and uncertainties that may cause actual
results to differ. These important risks and uncertainties include risks that
the total capital benefit of the transaction at closing and the U.S. GAAP
after-tax loss and statutory surplus loss could differ materially from the
estimates set forth in this release, as described on The Hartford’s website at and in a Current Report on Form 8-K to be filed
today with the SEC. Additional risks and uncertainties include those discussed
in our 2013 Annual Report on Form 10-K, subsequent Quarterly Reports on Forms
10-Q, and the other filings we make with the Securities and Exchange
Commission. We assume no obligation to update this release, which speaks as of
the date issued.

From time to time, The Hartford may use its website to disseminate material
company information. Financial and other important information regarding The
Hartford is routinely accessible through and posted on our website at In addition, you may automatically receive email
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Media Contacts:
The Hartford
Shannon Lapierre, 860-547-5624
Mobile: 860-227-5393
Thomas Hambrick, 860-547-9746
Mobile: 860-817-1289
In Japan:
Ashton Consulting Limited
John Sunley, +81 (0) 3 5425-7220
Mobile: +81 (0) 90 7416 0180
Investor Contacts
Sabra Purtill, 860-547-8691
Sean Rourke, 860-547-5688
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