Hartford Financial Cuts Energy Bets as Oil Prices Fall

  • CFO says investments positioned for ongoing commodities slump
  • Insurer reduced energy holdings to $2.5 billion at year-end

Hartford Financial Services Group Inc., the insurer that sold life units to focus on property-casualty coverage, spent last year cutting its exposure to energy investments by more than $1 billion and hedging its bets on the sector as falling oil prices pressured returns.

The insurer put on oil hedges “in early 2015 because as we looked at our portfolio, we knew that we did want to reduce our exposure there and we wanted some protection,” Chief Financial Officer Beth Bombara said Friday in a conference call discussing annual results. Hartford’s “overall very, very happy with the actions that we took and the position that we find ourselves in today.”

Hartford, which has an investment portfolio of more than $70 billion, joins other companies cutting holdings in the energy sector as oil prices have plummeted below $40. MetLife Inc., the largest U.S. life insurer, said Thursday that it spent most of last year reducing its exposure to the energy sector, ending the year with less than $12 billion in energy investments.

Hartford cut its energy holdings to $2.5 billion at year-end from about $3.7 billion the year before, Bombara said. Oil hedges posted a pretax loss of about $9 million, she said.

“These investments are well-positioned for a lower-for-longer oil and commodity price environment, and we will continue to manage these holdings,” Bombara said.

(Corrects losses on oil hedges in fourth paragraph.)
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