Dec. 17 (Bloomberg) -- Hartford Financial Services Group Inc., the insurer that rebuffed an activist’s calls to split into two companies last year, is considering a sale of a business that offered companies life insurance policies on their employees, people with knowledge of the matter said.
Hartford has held talks with investment banks about a possible sale of its corporate-owned life-insurance unit, which could fetch around $200 million, said the people, asking not to be identified because the matter is not public. The unit had policies with $37 billion in account value as of the end of March, according to company presentation.
Hartford sold part of the unit last year to Philadelphia Financial Group Inc., and a sale of the rest would accelerate Hartford’s retreat from life insurance to better focus on property and casualty insurance. The insurer has agreed to sell at least $1.3 billion of life-related businesses since since hedge-fund manager John Paulson urged it to split up last year, according to data compiled by Bloomberg.
The corporate-owned life division is housed inside Hartford’s Talcott Resolution arm, which holds businesses that have stopped selling new policies. The company last week completed the $285 million sale of its U.K. variable-annuity business to Berkshire Hathaway Inc., and in January sold a life-insurance unit to Prudential Financial Inc.
Shannon Lapierre, senior vice president for communication at the Hartford, Connecticut-based company, declined to comment.
Paulson pressed Hartford Chief Executive Liam McGee to split the company in two last year, after a stock slump in 2011. Paulson was Hartford’s biggest investor at the time, with an equity stake of more than 8 percent. The insurer’s shares shares have more than doubled in the past two years, giving it a market value of about $15.7 billion.
Corporate-owned life insurance is known within the industry as “janitor’s insurance.” Companies buy policies on low-level employees or executives, and collect the benefits when they die. Investment gains on the policies are counted as income, and the policies pay out tax free.
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