Insurance giant The Hartford announced today that it will exit the annuity business and sell off its life insurance, retirement plan and independent broker/dealer (Woodbury Financial Services) units. It’s been widely publicized that hedge fund manager John Paulson, The Hartford’s largest shareholder, had been pressuring the insurance company to separate its life insurance business from its property and casualty unit. Hartford shares had fallen 15 percent in the last year. (Today, however it was up 1.43 percent.)
The firm said it wants to focus on its property and casualty, group benefits and mutual fund businesses, “each of which has a competitive market position, strong capital generating ability and lower sensitivity to capital markets.”
But the company had been touting its annuity business of late, with a robust ad campaign in several trade publications. Perhaps in this low interest rate environment, investors and advisors don’t want to pay the high fees for annuities...
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(Read more from Staff Writer, Diana Britton on her blog, Yield of Dreams.)