The Hartford started the new year by announcing that it has closed on several major transactions related to the company’s transformation announced last March.
The Hartford Financial Services Group said Wednesday that it had completed the sale of three businesses:
– On Wednesday, Individual Life to The Prudential Insurance Company of America.
– On Tuesday, Retirement Plans to Massachusetts Mutual Life Insurance Co.
– On Monday, Individual Annuity to Forethought Financial Group Inc.
In early December, the company announced it had closed on the sale of on Woodbury Financial to AIG.
All told, the four divestitures benefit the Hartford-based property-casualty insurer with $2.2 billion in net statutory capital. The financial benefit from the transactions is primarily from the sales of its Retirement Plans and Individual Life units. They will be realized in the first quarter of 2013, when earnings are reported after the quarter ends March 31.
“Completing these transactions on favorable financial terms with a significant capital benefit represents an important milestone in the execution of The Hartford’s transformation,” The Hartford’s chairman and CEO, Liam E. McGee, said in a prepared statement. “We will be a more focused, disciplined and efficient company with greater financial flexibility while generating profitable growth and superior financial returns for shareholders.”
About 1,000 employees worked for The Hartford’s Individual Life business — nearly 200 in Connecticut, most of the others in Woodbury, Minn. It is unclear if all those jobs will be retained long term.
“We anticipate that we will complete the full integration of the two businesses within approximately one to two years,” said Sheila Bridgeforth, a Prudential spokeswoman. “There are no immediate layoffs as a result of the acquisition.”
Connecticut workers from The Hartford unit will move to Prudential’s existing offices in Hartford later this year, Bridgeforth said.
Retirement Plans Sale
The Retirement Plans deal was initially announced in September as part of a major transformation at The Hartford. The transaction affects 1,300 workers, including 700 in Greater Hartford. The plan as of September was to offer “virtually all of those employees” jobs, The Hartford’s CEO Liam E. McGee said in September.
“Given that we just closed yesterday, for the time being, all employees are working out of their current locations at The Hartford,” MassMutual spokesman Mark Cybulski. “We expect to have more details on where employees will be located by the end of January.”
MassMutual has major operations in Enfield and Springfield. During an acquisition, companies often look at “overlap,” or jobs that could be eliminated for efficiency.
“Regarding potential overlap, we will now begin implementing a comprehensive integration plan designed to create a premier retirement services business with a strong customer focus that builds on the best of both organizations,” Cybulski said. “In terms of staffing, it is premature to speculate beyond that.”
MassMutual CEO Roger Crandall said in a prepared statement: “We look forward to a smooth and seamless integration and the important benefits this acquisition will bring to our company, our clients and our policy owners.”
The combined retirement services business of both The Hartford and MassMutual will be overseen by Elaine Sarsynski, head of MassMutual’s Retirement Services Division. Sarsynski also is chair and CEO of MassMutual International LLC.
“Our goal is to ensure a seamless experience for the new employees, clients and partners we are welcoming to MassMutual,” Sarsynski said in a prepared statement. “We are eager to begin working together with our new colleagues from The Hartford’s Retirement Plans business as one team with the mutual purpose of helping Americans retire on their own terms.”
The combined retirement business has 40,000 retirement plans, 3 million people in those plans and $120 billion in assets under management.
The majority of employees at The Hartford’s Individual Annuity unit were offered positions with Forethought, both companies have said. The Hartford’s annuity business had about 100 employees, about 40 in Simsbury and about 60 in Wayne, Pa. Forethought plans to open offices in both regions and retain workers.