Prudential Financial Inc. is close to a deal to acquire the individual life insurance business of Hartford Financial Services Group Inc, and a deal could be struck as soon as Thursday, the Wall Street Journal reported.
The paper, citing a source familiar with the talks, said it would be structured as a complicated reinsurance transaction and that bankers had valued the business around $1 billion.
The companies were not immediately available to comment.
The Hartford is nearing the end of a restructuring program unveiled earlier this year that was designed to tighten the company’s focus on its property and casualty insurance business.
Under pressure to improve returns from its largest shareholder, the hedge fund manager John Paulson, the Hartford said in March it would shut down its annuity business and pursue sales for its broker-dealer, retirement plan and individual life operations.
Chief Executive Liam McGee predicted a sale process of 12 to 18 months, but if a deal with Prudential does come to pass then all of the dispositions would have been done in just six months.
The insurer already sold the broker-dealer business to American International Group in July and the retirement plan business to MassMutual earlier this month.
Shares of the Hartford were up 3 percent at $19.24 on Thursday morning on the New York Stock Exchange. Since announcing the breakup plan on March 21, the stock is down some 11.5 percent, against gains of 2 percent for the S&P insurance index.
Paulson’s primary complaint has been the insurer’s anemic valuation, which has not improved much this year. Whether using price-to-book ratio (favored for property insurers) or a forward price-to-earnings ratio (preferred for life insurers), the Hartford trades for less than half of the sector averages.
(Reporting by Ben Berkowitz in Boston; editing by Gerald E. McCormick and Matthew Lewis)
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