A.M. Best Comments on The Hartford’s Intent to Sell its Japan Annuity Company

  A.M. Best Comments on The Hartford’s Intent to Sell its Japan Annuity
  Company

Business Wire

OLDWICK, N.J. -- April 28, 2014

A.M. Best has commented that the ratings of The Hartford Financial Services
Group, Inc. (The Hartford) (Hartford, CT) (NYSE:HIG) and its subsidiaries will
remain unchanged following the recent announcement that it has signed a
definitive agreement to sell 100% of the outstanding shares of its Japanese
subsidiary, Hartford Life Insurance K.K., (HLIKK) to ORIX Life Insurance
Corporation (ORIX LIC), a subsidiary of ORIX Corporation (ORIX) (Tokyo,
Japan).

This transaction eliminates The Hartford’s Japanese variable and fixed annuity
exposure with the exception of a reinsurance agreement covering $1.1 billion
fixed payout annuity reserves. The sale is expected to close in July 2014,
subject to regulatory approvals. The announced transaction remains consistent
with The Hartford’s strategy to focus on its property/casualty, group benefits
and mutual funds businesses that it has been executing on over the past two
years.

The sale is expected to generate a GAAP loss but provide capital benefits from
the reduction of risk associated with the Japanese business. In addition, with
the exception of the fixed payout annuity treaty, all reinsurance agreements
between HLIKK and The Hartford’s U.S. life operations will be terminated. A.M.
Best will continue to monitor the retained U.S. variable annuity block, review
ongoing stress testing analysis and discuss with management its future capital
management plans, including planned utilization of sales proceeds.

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. Best’s Credit Rating Methodology can be found at
www.ambest.com/ratings/methodology.

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 © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contact:

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