Hartford Financial Services Group, the insurer being pressed by hedge fund manager John Paulson to break up, will stop selling individual annuities and seek buyers for parts of the life-insurance unit.
Hartford will focus on property and casualty insurance, group benefits and mutual funds, the company, based in the Connecticut city of the same name, said in a statement Wednesday.
The insurer also said it may sell the retirement plans, individual life and Woodbury Financial Services, its broker/dealer operations.
Mr. Paulson, whose Paulson & Co. owns about 8.5% of Hartford making it the insurer’s biggest shareholder, told company executives on a Feb. 8 conference call to “do something drastic” to increase the stock price, which dropped 39% last year. He urged CEO Liam McGee to split the 201-year-old insurer into separate property-casualty and life insurance companies and suggested winding down the U.S. variable annuities business.
Last year’s decline was the third-largest on the 24-company KBW Insurance Index, which slipped 14%.
Hartford will stop taking new annuity sales on April 27 and expects to report an after-tax charge of as much as $20 million in the second quarter. Proceeds from any transactions may be used to decrease debt, reduce risk tied to annuities previously sold, invest in the business and “potentially take other capital management actions,” the insurer said.
Armel Leslie, a spokesman for Paulson, didn’t immediately return an e-mail seeking comment.