$400M sale to let Hartford retire from retirement biz

The Hartford Financial Services Group Inc. is selling its retirement plan business to Massachusetts Mutual Life Insurance Co. for $400 million as part of a restructuring it embarked on this year. “The agreement marks the second of three planned business sales as we continue to make good progress executing on our strategy,” Liam McGee, president and chief executive of the insurer, said in a statement. “With The Hartford's sharper focus on its historical strength in insurance underwriting, along with efforts to improve expense efficiencies, increase capital generation and reduce market risks, we are on the right path to deliver greater shareholder value.”

SHARPENING FOCUS

The Hartford said in March that it would focus on its core businesses of property-and-casualty insurance, group benefits and mutual funds. The insurer said in July that it would sell Woodbury Financial Services Inc., its independent broker-dealer subsidiary, to American International Group Inc. That followed the purchase of Hartford's annuity business by Forethought Financial Group in April. Bloomberg has reported that the Hartford is close to selling its individual life insurance business to Prudential Financial Inc. That transaction could be worth as much as $1 billion. The move to reduce the company's size is the result of pressure by hedge funder John Paulson, the largest shareholder of The Hartford (HIG). Its shares were trading at about $18 last Thursday, down about 18% from when the restructuring was announced. The latest deal, which is expected to close in the fourth quarter, will give MassMutual's retirement plan business a big boost. The company, owned by policyholders and members, will see assets in its plans grow to $120 billion in assets under management, from $66 billion. MassMutual will service 40,000 retirement plans, a dramatic rise from 7,600. Plan participants will about double to 3.1 million.

A GOOD FIT FOR BUYER

Hartford's strength in the small plan and 403(b) markets was viewed as a good fit with Mass-Mutual's focus on midsize to large retirement plans. “This transaction enables us to accelerate growth into new sectors, add complementary distribution capabilities and nearly double the number of retirement plan participants we serve,” Roger Crandall, chief executive of MassMutual, said in a statement. Elaine Sarsynski, head of MassMutual's retirement services division, will oversee the transition. [email protected] Twitter: @jasonkephart