Hartford Financial Services Group Inc.
) amended its financial results for the third quarter of 2012
through a regulatory filing. The company announced a $388
million post-tax loss related to the sale of the Individual Life
business for the quarter, reflecting goodwill impairment and the
establishment of a loss accrual for premium deficiency.
Hartford Financial proclaimed that the financial statements
for the third quarter, filed earlier, are no longer reliable due
to the modification. The company also confessed to the presence
of a weakness in its internal control in the earlier reported
financial result, which was rectified by the end of 2012.
Hartford Financial had earlier announced that it did not
expect any material gain or loss related to the divestiture of
the Individual Life business. However, this assumption was due to
the omission of the effect of some reinsurance recoverable
balances from the calculation, the inclusion of which led to a
post-tax GAAP loss of $393 million.
As a result of the amendment, net income of $350 million for
2012, as reported earlier, was reduced to a net loss of $38
million. Moreover, the shareholders' equity as of Dec 31, 2012
was reduced marginally to $22.4 million from $22.8 million
reported earlier. However, the core earnings of $1.4 billion for
2012 were not altered.
The statutory capital benefit of $2.2 billion, derived from
the sale of Individual Life, Retirement Plans and Woodbury
Financial Services, also remained unchanged. Further, Hartford
Financial's capital management plans, announced with the
fourth-quarter results, remained unaltered. The company
recognized a $5 million net realized investment loss related to
the sale in the fourth quarter of 2012.
Hartford Financial currently carries a Zacks Rank #4 (Sell).
Other multi-line insurers worth considering are
Assured Guaranty Ltd.
CNO Financial Group Inc.
). All these companies carry a Zacks Rank #1 (Strong Buy).
AGEAS-ADR (AGESY): Get Free Report
ASSURED GUARNTY (AGO): Free Stock Analysis
CNO FINL GRP (CNO): Free Stock Analysis
HARTFORD FIN SV (HIG): Free Stock Analysis
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