Hartford Sells Japan Annuity Unit, Sees $625 Mln Loss From Dis. Operations In Q2

(RTTNews) - Property and casualty insurance firm Hartford Financial Services Group Inc. (HIG) Tuesday said it has completed the sale of its Japanese annuity subsidiary, Hartford Life Insurance K.K. to Japanese financial services group Orix Corp. (IX) for $963 million.

ORIX's unit ORIX Life Insurance Corp. bought the Japanese operations. The deal price comprised of a purchase price of $895 million and an estimated positive purchase price adjustment of $68 million.

Hartford said it will record a loss on discontinued operations of approximately $625 million and a U.S. life statutory surplus loss of approximately $325 million in its second quarter 2014 financial results.

Hartford estimates that the transaction will result in a net statutory capital benefit of $1.4 billion, which will provide approximately $1 billion for potential incremental capital management actions.

The company said it is seeking approval for extraordinary dividends from the Connecticut Insurance Department. These dividends represent the reduction in capital required in the company's U.S. life insurance subsidiaries due to the termination of certain reinsurance agreements as part of the transaction.

Hartford's Chief Financial Officer Beth Bombara said, "The Hartford's capital flexibility and risk profile are substantially improved as a result of this transaction. We look forward to updating you on any additional capital management actions we may take as a result of this transaction, and expect any actions to be balanced consistent with our prior approach, including equity repurchase and debt repayment."