Hartford Financial To Sell Japan Unit To Orix For $895 Mln - Quick Facts

(RTTNews) - Hartford Financial Services Group (HIG) has reached a definitive deal with ORIX Life Insurance Corp., an unit of Financial services group Orix Corp. (IX), to sell Japan Annuity Company Hartford Life Insurance K.K. or HLIKK for $895 million.

Hartford's Chairman, President and CEO, Liam McGee, said: "This transaction materially reduces The Hartford's risk profile by permanently eliminating the company's Japan variable annuity risk. We are pleased with the economics of the transaction, both in terms of purchase price and expected capital benefit. In addition, ORIX Life Insurance Corporation is a financially strong, well-respected, diversified Japanese financial services company that will continue to provide high-quality service to our Japanese customers."

The anticipated loss on sale and the results of operations of HLIKK prior to the deal completion would be reported as discontinued operations beginning in the second quarter of 2014. As discontinued operations, the results of operations of HLIKK would be excluded from income from continuing operations and from core earnings, a non-GAAP measure, for all periods presented in the financial statements, the company noted.

Following the deal closure, all reinsurance agreements between HLIKK and The Hartford's U.S. life insurance units would terminate, with an exception of an agreement covering nearly $1.1 billion of fixed payout annuity reserves. The transaction is likely to be approved by the Japanese Financial Services Agency and to close in July 2014.