The Hartford To Sell UK P&C Runoff Subsidiaries To Catalina

July 27--HARTFORD -- The Hartford announced Tuesday that it would sell its United Kingdom-based property and casualty runoff subsidiaries to a consolidation firm.

The subsidiaries, Downlands Liability Management Limited and Hartford Financial Products International Limited, will be sold to Catalina Holdings UK Limited, which specializes in consolidation in the non-life insurance and reinsurance runoff sector.

The sale of the subsidiaries is not expected to result in a material gain or loss, net of tax effects, on The Hartford's financial results, according to a press release.

"We are pleased to announce this agreement, which is a good opportunity to permanently transfer our P&C runoff exposures in the U.K.," The Hartford's Chief Financial Officer Beth Bombara said in a statement. "Catalina is a well-respected organization that specializes in the consolidation of insurance and reinsurance liabilities in runoff."

Catalina Holdings UK Limited is a wholly owned subsidiary of Catalina Holdings (Bermuda) Limited.

The sale is expected to close in the fourth quarter of 2016, subject to regulatory approvals and other customary closing conditions. It comes after The Hartford merged all of its runoff U.K. insurance business into a single insurance company, HFPI, the company said.

"HFPI is a large and well diversified business, the majority of which has been in runoff since 1993," Chris Fagan, chairman and chief executive of Catalina, said in a statement. "It is managed by a professional and experienced team at DLM who will strengthen the breadth and diversity of Catalina's UK business."

The U.K. businesses primarily consist of U.S. asbestos and environmental liabilities, most of which was previously underwritten by Excess Insurance Company Limited, as well as U.K. asbestos liabilities. Both DLM and HFPI had total assets of $1,023 million and shareholders' equity of about $321 million, as of March 31.

After the sale closes, staff will remain employees of DLM, and DLM and HFPI will remain based in Worthing, England, the company said.

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