| Copyright: | Business Wire | | Source: | Business Wire | | Wordcount: | 598 |
Business Editors/Financial Editors
HARTFORD, Conn.--(BUSINESS WIRE)--November 3, 2008--The Hartford Financial Services Group, Inc. (NYSE: HIG) today provided additional information regarding its capital position in a Form 8-K filing with the Securities and Exchange Commission.
In its filing today, the company stated that its capital margin, the capital in excess of modeled rating agency requirements to maintain AA level ratings, would be approximately $2 billion at year end, assuming a year-end S&P 500 level of 900. This compares to an estimate of $3.5 billion, which was disclosed by the company on October 6, 2008, following the announcement of the Allianz transaction. This prior estimate assumed a year-end S&P 500 market level at a September 30, 2008 level, which was 1165.
The company also outlined additional details on the company’s estimated year-end risk-based capital (RBC) ratio for Hartford Life and Accident Insurance Company (HLA) at various S&P 500 levels. An RBC ratio of 325 percent or higher has historically been associated by various rating agencies with AA level ratings.
“The Hartford is financially strong and well capitalized,” said Ramani Ayer, The Hartford’s chairman and chief executive officer. “The company’s RBC ratio, including a number of provisions, is estimated to be above 400 percent at year-end S&P 500 levels of 900. Our capital position is more than sufficient for current market conditions and in the event markets deteriorate further.
“In addition, should market conditions become more severe, we have access to additional sources of capital without tapping public markets or other capital raising options. These sources include capital in the parent company and the property and casualty subsidiaries, a $500 million contingent capital facility and a $1.9 billion bank credit facility. The company’s property and casualty subsidiaries will continue to be capitalized at or above the levels historically associated with AA level property and casualty insurers,” added Ayer.
Given uncertainties regarding the application of rating agency models and the difficulties of estimating capital margin in an environment of severe capital market volatility, the company intends to present its capital position for its life operations in terms of RBC ratio.
According to the National Association of Insurance Commissioners, the risk-based capital ratio is a measurement of the amount of capital (assets minus liabilities) an insurance company has as a basis of support for the degree of risk associated with its company operations and investments.
About The Hartford
The Hartford, a Fortune 100 company, is one of the nation's largest financial services companies, with 2007 revenues of $25.9 billion. The Hartford is a leading provider 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. The Hartford's Internet address is www.thehartford.com.
HIG-F
Some of the statements in this release may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ. These important risks and uncertainties include those discussed in our Quarterly Reports on Form 10-Q, our 2007 Annual Report on Form 10-K and the other filings we make with the Securities and Exchange Commission. We assume no obligation to update this release, which speaks as of the date issued.
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