View more on these topics

Fitch puts Hartford Financial Services ratings on negative outlook

Fitch has placed several ratings for the Hartford Financial Services Group on negative outlook due to exposure to “troubled credits”.

Fitch has revised the rating outlook on the issuer default ratings, senior debt and insurer financial strength ratings for the Hartford Financial Services Group and its life subsidiaries to negative from stable.

Fitch says the change reflects concerns that over the company’s financial profile given the extraordinarily challenging credit market environment.

The rating agency says that Hartford’s life insurance operations have experienced a drop in capital levels cause by a deterioration in asset values and a decline in earnings, both of which are driven by weakened capital market conditions.

Fitch says the company still has a “meaningful exposure” to losses, some of which have yet to be realised, and above average exposure to sub-prime residential mortgage-backed securities and commercial real estate collateralised debt obligations.

Fitch expects the firm’s large variable annuity book to be less profitable than previously expected in the near term.

Hartford issued a statement responding to the ratings announcement from Fitch and also Moody’s, as well as fluctuation in its US share price.

It said: “We are disappointed with our recent stock performance but recognise we are living through a period of unprecedented market conditions. The Hartford’s core operating businesses are performing well and our liquidity remains strong.

“The Hartford has a strong history of managing through challenging times. We were pleased that both Moody’s and Fitch maintained our excellent insurance financial strength ratings at a AA level following their review. However, both agencies did change our outlook, largely due to market conditions.

“We are confident in our financial strength and in our ability to meet our commitments to customers. Nothing is more important to us than honoring those promises and maintaining our strong ratings.”

The firm also said it had successfully steered itself through previous periods of financial turbulence and was confident in its ability to do so again.

Recommended

LV= launches large case service

Protection provider LV= has unveiled its plans to draft in a team of specialists to front its new large case service for advisers dealing with high net worth clients.

Cooper warns against regulatory overkill

Chief secretary to the Treasury Yvette Cooper has urged that current market turmoil should not provoke a move to rules-based regulation while admitting that regulators need to understand risks better.

What are the key changes to transform pensions?

By Fiona Tait, pensions specialist In her final article for Royal London, Fiona Tait reviews key changes she believes have transformed, or will transform, pensions. In my 12 years with Royal London I have been paid to review, study and explain the numerous changes to pension legislation which have transformed our industry in that time. This is […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment