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Allianz in £1.4bn move to shore up Hartford

Allianz SE has invested £1.4bn in The Hartford, representing up to a 24 per cent stake, after the US insurance company predicted third-quarter losses of around £1.25bn.

Early this week, The Hartford announced that it expects its share price to fall by up to £5, with net realised capital losses of up to £4.12 a share.

In conjunction with Allianz’s financial investment and the increase in shares outstanding, The Hartford has cut its quarterly dividend to £0.18 a share.

The Hartford chairman and chief executive officer Ramani Ayer says: “With this investment by Allianz SE, we project that we will finish the year with a capital margin of about £2bn in excess of our modeled rating agency requirements to maintain AA level ratings.”

US Senate majority leader Harry Reid warned last week that a major insurer was on the verge of bankruptcy if financial markets were not calmed. Some commentators thought he was referring to The Hartford as it had come up in discussion. A spokesman for Reid later retracted the comment.

The Hartford spokeswoman Shannon Lapierre says its recent stock performance was due to unprecedented market conditions and the company has a strong history of managing through challenging times.

Debt exposure, p16

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