Yesterday,
Hartford Financial Services Group Inc.
(
HIG
) announced an agreement to sell its subsidiary Hartford Life
Private Placement (HLPP) to Philadelphia Financial Group Inc. for
$117.5 million. The transaction is subject to regulatory approval
and closing conditions and is expected to culminate in 2012.
The purchase deal will be financed by
Reinsurance Group of America Inc.
(
RGA
), while
Evercore Partners Inc.
(
EVR
) acted as the financial advisors to Philadelphia Financial.
HLPP is an insurance and wealth management service provider for
businesses and ultra-high net worth individuals. It also
administers corporate and bank-owned life insurance policies and
runs institutionally owned group annuity contracts.
After the completion of the deal, Philadelphia Financial will
handle the private placement insurance business worth $35 billion
that is currently serviced by HLPP. Additionally, all the existing
employees of HLPP will be absorbed by Philadelphia Financial.
The company's operations complement the business of Philadelphia
Financial, which provides private placement insurance products to
ultra-high net worth individuals. The deal will help Philadelphia
Financial to diversify into wealth management and corporate and
bank-owned life insurance policies.
The sale is part of Hartford's business strategy, whereby over
the past year, the company has been selling off its non-core
business units to focus on its core business of life insurance,
property-casualty and retirement products.
In October 2011 the company sold its subsidiary Trumbull
Services LLC to
ExlService Holdings, Inc.
(
EXLS
). Trumbull specializes in providing subrogation service. It also
provides other services such as premium collection and policy
administration.
Further, in May 2011, the company announced an agreement to sell
its subsidiary, Federal Trust Corporation to
CenterState Banks, Inc.
(
CSFL
).The deal is expected to close in the fourth quarter of 2011,
subject to regulatory approval. Earlier, in February 2011, Hartford
sold its wholly-owned subsidiary Specialty Risk Services, LLC to
Sedgwick Claims Management Services Inc.
Such divestitures will enable the company to focus all of its
manpower and financial resources on its core businesses, thereby
improving the operating performance. Currently, Hartford carries a
Zacks #5 Rank, implying a short term Strong Sell rating.
CENTERSTATE BNK (
CSFL
): Free Stock Analysis Report
EVERCORE PARTNR (
EVR
): Free Stock Analysis Report
EXLSERVICE HLDG (
EXLS
): Free Stock Analysis Report
HARTFORD FIN SV (
HIG
): Free Stock Analysis Report
REINSURANCE GRP (
RGA
): Free Stock Analysis Report
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