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"The Hartford is well-capitalized and has ample liquidity,? said Ramani Ayer, Hartford's chairman and chief executive officer. ?Our statutory surplus exceeded $13 billion as of Sept. 30, 2008, and we hold more than $12 billion in cash, short-term investments and Treasuries, as of Nov. 30, 2008.?
Ayer said that ?the capital outlook for our life operations through year end indicates more than sufficient capital in current market conditions, and even assuming significant additional market deterioration,? and that its property/casualty operations also maintained high capitalization levels.
Ayer also said Hartford?s battered investment portfolio is looking better.
?Under severe recession scenarios we expect our portfolio to hold up quite well,? he said. ?Potential economic losses would be manageable under such scenarios. Our commercial mortgage-backed securities are highly rated, with significant credit protection, and are broadly diversified by geography, property type and maturity date."
The upbeat morning conference lit a fire under Hartford?s battered stock. Its shares were selling at $14.75 in afternoon trading on Dec. 5, up 104.58% from the previous close.
The good news followed several tough weeks for the company, which saw its stock plummet from a 90-day high of $66.27 on Sept. 9 to less than $7 through most of this week.
Last month, it posted a $2.6 billion third-quarter loss and announced plans to lay off nearly 2% of its total work force, and possibly more in January. A month earlier, Hartford sold a $2.5 billion equity stake to Allianz Societes Europaea (Germany) following significant realized and unrealized investment losses and other charges (BestWire, Nov. 4, 2008).
In November, Hartford also made itself eligible to receive a cash infusion under the U.S. Treasury Department's $250 billion Capital Purchase Program by announcing a $10 million deal to purchase Sanford, Fla.-based Federal Trust Bank (BestWire, Nov .17, 2008).
Most members of the Hartford Insurance Group currently have a Best's Financial Strength Rating of A+ (Superior), which is under review with negative implications.
(By Alyn Ackermann, senior associate editor, BestWeek: Alyn.Ackermann@ambest.com)
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