Recent $2.5bn investment from Allianz has strengthened capital.
The Hartford Financial Services Group reported a loss of $2.63bn in the third quarter, hit by investment losses and catastrophe payouts. The loss was $8.74 per diluted share.
"This was an extremely difficult quarter for the company. Volatile credit and equity markets and the largest catastrophe in the past three years significantly affected our results," said Ramani Ayer, The Hartford's chairman and CEO. "Earlier this month, we took decisive action to fortify our capital by securing a $2.5bn investment from Allianz. The Hartford is financially strong with the liquidity and capital to meet our commitments to our customers," he said.
Under the agreement, Allianz has purchased, at $31 per share, $750m of preferred shares convertible to common stock after receipt of applicable approvals, and $1.75bn of 10% junior subordinated debentures. The debentures are callable by The Hartford at par beginning ten years after issuance. Allianz SE also received warrants which entitle it to purchase $1.75bn of common stock at an exercise price of $25.32 per share, subject to shareholder approvals. The warrants expire in seven years. The Hartford had announced the deal on October 6.
Founded in 1810, The Hartford is a Fortune 100 company, with 2007 revenues of $25.9bn. The Hartford provides of investment products, life insurance and group benefits; automobile and homeowners products; and business property and casualty insurance. International operations are located in Japan, the United Kingdom, Canada, Brazil and Ireland.
