View more on these topics

Hartford has £143m exposure to Lehman

The Hartford Financial Serv-ices Group has announced it has exposure of £143m in Lehman Brothers and £8.5m in AIG as at September 16.

The Hartford’s debt exposure to Lehman Brothers is £124m and it has £19m in preferred stock. In addition it has £28m of unsecured counterparty exposure to Lehman in connection with derivatives transactions. It also has £75m of debt issued by operating subsidiaries of AIG.

The Hartford is exposed to senior debt issued by Lehman and AIG through credit default swaps totalling £17m and £40m respectively. As of June 30, the firm’s general account assets were $94.6bn.

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

Fitch says the change reflects concerns over the firm’s financial profile, given the current challenges of the credit market environment.

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

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

But The Hartford UK managing director Michael Rudd says September saw the highest demand for variable annuities this year.

“We are seeing an increased demand for our variable annuity-style products, which are appreciating in value. They enable people to ride out these volatile market movements. People know that they can grab onto the upside when it arrives and that their income is guaranteed.”

He says consumers are not losing confidence in the guarantee provided on The Hartford’s products and insists there is no need for concern. He says: “We recognise the importance of our commitment to clients and are well capitalised to del-iver on those commitments.”

Chairman and chief executive officer Ramani Ayer says the recent volatility in the capital markets is trying and times have been worrying for customers, shareholders and employees.

He says: “We remain confident in the diversified oper-ating businesses that form the foundation of our com- pany. Our strong balance sheet, excellent insurance financial strength ratings and low debt to capitalisation ratio provide us with financial flexibility.”


It’s good to talk

The UK’s inaugural Financial Planning Week (FPW) took place the week before the Lehman Brothers collapse. As reported in Money Marketing, the week itself was a great success but it also highlighted what a huge job there is to do in assisting people with planning their finances and, where appropriate, getting them in front of professionals to help them establish and realise their goals.

UK moves to protect Icesave accounts

The British Government has stepped in to protect Icesave deposits held by UK savers with estimates that around 300,000 people had accounts with the UK operation of Icelandic bank Landsbanki.

Central banks lower rates

The Bank of England is one of seven central banks to drop interest rates by 0.5 per cent as further attempts are made to stabilise the global economy.

Finding value in UK equities

By Mark Martin, Investment Director & Head of UK Equities Register for a live update on 9 July at 14.30 with Mark Martin, who will be discussing Chancellor George Osborne’s ‘emergency’ summer budget, the UK equity landscape post May’s General Election and his outlook for the second half of 2015. Mark will also highlight the […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm