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The Hartford completes $2.75bn Talcott sale

May 31, 2018

The Hartford has completed its $2.75bn sale of its run-off life and annuity business, Talcott Resolution.

The Hartford chairman and CEO Christopher Swift said that the company’s exit from these businesses “significantly reduces our capital markets exposure”.

“We now have greater financial flexibility and a business mix that will improve our ROE and earnings growth profile over time,” he said.

Talcott has been acquired by a group of investors led by Cornell Capital, Atlas Merchant Capital, TRB Advisors, Global Atlantic Financial Group, Pine Brook and J. Safra Group.

“This completes our exit from the run-off life and annuity businesses and significantly reduces our capital markets exposure,” said Swift.

“We now have greater financial flexibility and a business mix that will improve our ROE and earnings growth profile over time,” he continued.

Total value of the sale to The Hartford is $2.75bn. This comprises total consideration of around $2.05bn, including cash paid by the buyers, a pre-closing cash dividend, debt included as part of the sale and a 9.7 percent ownership stake in the new company. In addition, The Hartford will retain Talcott Resolution tax benefits with an estimated GAAP book value of approximately $700mn, which will be available for realization subject to the level and timing of The Hartford’s taxable income.

Hartford Investment Management Company (HIMCO), The Hartford’s investment management group, has a five-year contract to manage a significant portion of Talcott Resolution’s investment portfolio. In addition, The Hartford will provide to and be reimbursed by Talcott Resolution for certain transition services for up to two years.

The new company will operate under the name Talcott Resolution. Around 375 of The Hartford’s employees have joined the new company and will be located in offices in Windsor, Connecticut, and Woodbury, Minnesota.