Prudential Financial is
to acquire The Hartford’s individual life Insurance business
through a reinsurance transaction.
The acquisition comes
after The Hartford’s previous announcement that it is to turn its
back on the individual life insurance and annuity sectors and focus
on its property and casualty, group benefits and mutual funds
operations.
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Under the terms of the
agreement, Prudential will pay The Hartford a cash consideration of
$615m and primarily will receive approximately $7bn of general
account investment assets and corresponding reserves, and rights
and obligations with respect to approximately $5 billion in
separate account assets and corresponding liabilities, based on
statutory balance sheet values as of June 30, 2012.
The cash consideration
consists primarily of a ceding commission to provide reinsurance
for approximately 700,000 Hartford life insurance policies with
face amount in force of approximately $135bn.
It is expected that the
transaction will close in early 2013, subject to regulatory
approvals and customary closing conditions.
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By GlobalDataCommenting on the
acquisition, John Strangfeld, chairman and CEO of Prudential
Financial, said: “The integration of Prudential’s individual life
Insurance business and that of The Hartford will create an
organisation with greater scale, enhanced products offerings and
expanded distribution expertise to meet the life insurance needs of
Americans and their families.”
The benefits and
provisions of The Hartford’s in-force life insurance contracts will
remain unchanged and The Hartford’s issuing companies will continue
to be the named insurers.
Prudential will receive
premiums and will be responsible for paying claims and providing
customer service and administration
Prudential Financial
also announced that Jim Avery, CEO of the individual life insurance
business, will retire when the transaction closes. He will be
succeeded by Kent Sluyter, vice president and chief actuary of the
business.
Sluyter joined
Prudential in 1981 and has worked across the actuarial, operations,
systems, risk management and marketing functions of Prudential
Financial’s individual life Insurance business.
