An investor group led by Cornell Capital L.L.C. has agreed to pay a total of $2.05 billion to acquire a big runoff annuity business from Hartford Financial Services Group Inc.
The group, which is identifying itself as the Hopmeadow group, is on track to acquire Hartford Life Inc. and Hartford Life & Annuity.
About 400 people who now work for Hartford Financial in Windsor, Connecticut and Woodbury, Minnesota, would go to work for the Hopmeadow group.
Hartford Financial would keep Hartford Life & Accident, the Hartford Life Inc. division that writes Hartford Financial's group disability insurance coverage.
The investor group and Hartford Financial hope to complete the deal by June 30, 2018, according to Hartford Financial. The investor group would put Talcott Resolution in a new company, and Hartford Financial would get a 9.7% stake in the new company.
Chris Swift, the chairman of Hartford Financial, said in a statement that Hartford Financial is selling Talcott Resolution to strengthen the company's focus on its property-casualty, group benefits and operations.
"We are proud of the reputation, operational capabilities and talented employees of Talcott Resolution, all of which provide the buyer with a great foundation on which to build its U.S. life insurance and annuity presence, while providing continuity for Talcott Resolution's policyholders, partners and employees," Swift said in a statement accompanying the deal announcement.
Cornell Capital and Hartford Financial do not seem to have given any more details about the investor group's plans for the annuity business.
The History
Ten years ago, Hartford Financial's annuity unit was a business the parent company bragged about.
The effects of the Great Recession pounded the unit's performance and increased regulatory scrutiny of the income guarantees the unit had offered. The company swung from posting $851 million in net income for the third quarter of 2007 to a $2.6 billion loss for the third quarter of 2008.
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