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The Hartford announces Lehman and AIG exposure

The Hartford Financial Services Group has announced that it has debt and equity 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 has £75m of debt issued by operating subsidiaries of AIG.

The Hartford is also exposed to senior debt issued by Lehman and AIG through credit default swaps totaling £17m and £40m respectively.

As of June 30 the company’s general account assets were $94.6bn.

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.

The Hartford’s chairman and chief executive officer Ramani Ayer says: “We are seeing unprecedented volatility in the capital markets and these are obviously very trying times. It has been difficult for our customers, shareholders and employees to watch the events that have unfolded, with so many livelihoods tied to the financial services marketplace.

“We recognise the importance of the commitments we have made to our policyholders and are well capitalised to meet those commitments. We remain confident in the diversified operating businesses that form the foundation of our company. Our strong balance sheet, excellent insurance financial strength ratings and low debt-to-capitalisation ratio provide us with financial flexibility.”


FSA censures sub-prime brokers

The FSA has censured the directors of Lifestyle Finance Limited for failing to implement appropriate compliance and sales procedures to ensure customers were given suitable mortgage advice.


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