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Hartford Financial Services Group said it has completed the $615 million sale of its individual life insurance unit to Prudential Insurance for $615 million. Approximately 700,000 of The Hartford's life insurance policies with a combined face value of $135 billion will transfer to Prudential, The Hartford Courant has reported.
The deal was suggested by hedge fund manager John Paulson, currently Prudential’s largest shareholder.
The policies will be managed by Prudential.
The Hartford is shifting its strategy to home, auto and commercial coverage as CEO Liam McGee, 58, narrows the focus of the firm. The Hartford has divested assets including life insurance, retirement-plans, broker-dealer and individual-annuities origination units in deals that freed up more than $2 billion in capital, Bloomberg reported.
Prudential made the acquisition through a reinsurance transaction announced last September.
Hartford has received approval from state regulators to pay a $1.2 billion dividend from Connecticut life insurance units to the parent company.
The Hartford has recently also completed deals to sell its retirement plan business to MassMutual, and its individual annuity business to Forethought Financial Group. The Hartford closed its sale of Woodbury Financial to AIG in December.
The moves are part of The Hartford’s strategy to re-focus primarily on property-casualty insurance, group benefits and mutual funds.
Separately, The Hartford has announced that it will buy back shares and reduce debt following losses related to hurricane Sandy. The company plans to buy back up to $500 million in stock and slash debt by $1 billion, according to a statement.
The sales of units The Hartford now considered “non-core” will help achieve the company’s current goals, which include “paying down debt, returning capital to shareholders and further strengthening our financial flexibility to take actions to reduce risk in the legacy annuity liabilities,” McGee said in a company statement.
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