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The Hartford says it will get out of the annuity business
By Insure.com staff

The Hartford Financial Services Group Inc. has announced it will get out of the annuity business and focus on property and casualty insurance, group benefits and mutual funds.

The company said it will also sell or look for other strategic alternatives for its individual life, Woodbury Financial Services and retirement plans businesses.

"The Hartford's sharper focus will lead to an organization that, over time, will be positioned for higher returns on equity, reduced sensitivity to capital markets, a lower cost of capital and increased financial flexibility," Liam E. McGee, The Hartford's chairman, president and CEO, said in a press statement. "With this portfolio and the actions we are taking, we are on the right path to unlock value and deliver superior, long-term returns for shareholders."

The plan did not satisfy billionaire hedge fund manager John Paulson, who has urged the company to spin off the property and casualty business from the life insurance business. Paulson, who owns an 8.4 percent stake in the company, is The Hartford's largest shareholder.

"While we appreciate the extensive work of The Hartford's board and management, we do not believe the positive actions announced today address the main problem with The Hartford's undervaluation: the lack of interest from P&C analysts and P&C investors in The Hartford's best-in-class P&C business due to its affiliation with unrelated, low-return and complex businesses," he said in a press statement. "We do not believe today's actions will materially increase P&C investor interest in The Hartford."

The Hartford did not issue a statement in response.

The company said it will stop new annuity sales April 27 and take a related after-tax charge of $15 million to $20 million in the second quarter of 2012.

The Hartford will continue selling individual life insurance and retirement plans while it works with financial advisers to help with selling off or pursuing other strategic alternatives for those businesses.

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