To our property and casualty insurance distributors:
As Chairman and CEO of The Hartford, I want to extend my personal thanks for your continued support of our partnership. The recent turbulence in the equity markets has produced some disturbing headlines. I want to take this opportunity to share the facts about our financial strength with you, our trusted distribution partners.
The Hartford is a company that has delivered solid core operating results, possesses a good capital base, has excellent insurance financial strength ratings, and continues to focus on improving our property and casualty products and distribution relationships.
Financial Strength
We project that our capital margin, the capital we have in excess of modeled rating agency requirements to maintain AA level ratings, will be approximately $2 billion at year end, assuming a year-end S&P 500 level of 900. In addition, our life company risk-based capital ratio — generally viewed as the most objective measure of an insurance company’s ability to meet its commitments — is estimated to be above 400 percent, even if the S&P 500 declines to 900 at year end. This is well above the 325 percent level historically associated with AA level ratings for life insurers, and our property and casualty earnings has contributed $841 million in core earnings to the enterprise as of September 2008.
We are well capitalized to meet our commitments to our customers in the current market conditions and in the event markets deteriorate further.
Solid Ratings
Even though Fitch Ratings recently lowered our financial strength rating to AA-, a one-notch downgrade, this rating is considered “very strong” on the Fitch rating scale. In addition, Moody’s recently affirmed our Aa3 financial strength rating of our property and casualty company, with a stable outlook going forward, even though they downgraded our corporate debt ratings.
In fact, both Moody’s and Fitch commented favorably on the strength of our property and casualty company. Moody’s cited the property and casualty company’s “strong franchise, well capitalized subsidiaries, and diversified revenue and earnings streams” as reasons for the reaffirmation of our property and casualty financial strength ratings. In a recent press release, Fitch commented that “Hartford’s property/casualty operations and capitalization remain strong”.
The Hartford will meet current economic challenges like we have all others in our nearly 200-year history, and we are poised to emerge more resilient and ready for growth.
Continuing to invest in property and casualty
I also want to assure you that we continue to invest in our property and casualty operations and distribution relationships. Over the next 12 months, we plan to execute a number of changes that will make our products more competitive and will improve the way we work with our distribution partners. These changes include:
- Improving the price competitiveness of our Dimensions auto and homeowner products
- Providing greater agency access to the 50+ market, through agency distribution of our AARP auto and home products.
- Launching advanced Spectrum pricing for Small Commercial risks, improving competitiveness with larger accounts, simplifying our classification structure and expanding our appetite.
- Improving our Workers’ Compensation product to make it more competitive for both account and mono-line business.
- Accelerating our responsiveness and service to agents on new and renewal business by continuing the momentum of our Underwriting & Operations Excellence initiative.
Again, I want to thank you for standing by The Hartford. Your trust in us is well founded. Our commitment to you remains unchanged – to deliver outstanding products and service that you have come to expect from us and maintain the financial strength to fulfill the promises we make to our customers.
Sincerely,
Click here for a video message from Ramani Ayer
Paperless Comment: We love Hartford and hope you love it as much as we do!