Pru to pay $615 million in cash for 700,000 life insurance contracts
The Hartford Financial Services Group Inc. has whittled away yet another of its businesses, this time selling off its individual-life-insurance business to Prudential Financial Inc.
In an announcement late Thursday, the insurers announced that Prudential will acquire about 700,000 Hartford life insurance contracts via a reinsurance transaction. Prudential agreed to pay $615 million in cash and will obtain $7 billion in general-account investment assets and reserves, plus rights and obligations to $5 billion in separate-account assets and liabilities.
The policies Prudential will receive have a face amount in force of about $135 billion.
The sale is expected to close early next year, subject to regulatory approval, according to an announcement from Prudential. Once the sale is closed, Jim Avery, chief executive of Prudential's individual-life-insurance business, will retire and Kent Sluyter, vice president and chief actuary, will oversee the business.
Hartford's policyholders will retain the same benefits and provisions under Prudential. Further, while Hartford's issuing carriers will continue to be the named insurers on the policies, Prudential will be receiving premiums and ultimately will be responsible for paying benefits and providing service.
The sale boosts Hartford's net statutory capital by $1.5 billion. The deal is the last in a trio of divestitures for Hartford, which sold off its broker-dealer Woodbury Financial Services Inc. to American International Group Inc.'s Advisor Group in July and its retirement plans business to Massachusetts Mutual Life Insurance Co. this month.
Without those businesses, Hartford will concentrate on property/casualty insurance, group benefits and mutual funds.
