A Hartford split would impact ratings: FitchPosted by: RJ and Makay on Feb 21, 2012  
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Recent public speculation about a possible split of the Hartford Financial Services Group (HFSG) into separate life and property-casualty (P/C) companies is raising questions about possible rating implications of such a move, Fitch Ratings said last week. Market perception of a possible split is largely unknown, though some investors assert that a split would improve the profitability of HFSG.
“While we do not speculate on the likelihood of a split occurring, Fitch would review any announced transaction for its impact on the credit quality and financial strength of the resulting company structure,” the ratings agency said in a statement.
Fitch currently maintains separate insurer financial strength (IFS) ratings on HFSG’s life and P/C companies.
Noting that in recent years only the P/C operations have provided dividend capacity, Fitch said any analysis of a split company would center on the new entities’ debt service capabilities and financial flexibility.
During the financial crisis, Hartford’s P/C companies were a source of capital for the life operations.
“While we do not expect the P/C insurance operations will be needed to fund potential future capital needs of the life companies, the P/C companies continue to have the ability to provide such support,” Fitch said. “This could serve as a particularly valuable source of financial flexibility should the life operations require an additional capital boost.”
Source:
Potential Hartford split raises uncertainties (http://insurancenewsnet.com/article.aspx?id=330413&type=topnews). Insurance News Net, February 16, 2012
Fitch: Possible Hartford split of P&C, life operations could have ratings impact (http://www.propertycasualty360.com/2012/02/17/fitch-possible-hartford-split-of-pc-life-operation). Property Casualty 360, February 17, 2012
