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The reinsurer analysis recently reported results in line with that forecasted in my analysis. The shares have been, nonetheless, driven by this recent bear market rally, as has the shares of HIG. I have released a rash of HIG research warning subscribers of the trouble they are in, and it seems the industry in general and particularly those that have sold variable annuities will have problems for the foreseeable future.

From Bloomberg: Hartford Financial Reports Third Straight Loss Amid Equity-Market Slump 

April 30 (Bloomberg) -- Hartford Financial Services Group Inc., the Connecticut-based insurer, had its third straight quarterly loss as the stock-market slump raised the cost of protecting customers from declines in retirement accounts.

The first-quarter net loss was $1.21 billion, or $3.77 a share, compared with profit of $145 million, or 46 cents, in the year-earlier period, the company said today in a statement distributed by Business Wire.

Hartford’s earnings shrank, then disappeared amid the six- quarter drop in the Standard & Poor’s 500 Index as the company shouldered declines for savers with equity-linked variable annuities. That depleted capital at the life insurance division, and Chief Executive Officer Ramani Ayer, who also oversees a profitable property-casualty unit, is under pressure to stanch the losses or break up the 199-year-old insurer.

“The life side clearly is overexposed to variable annuities, and I’m not sure how they back away from that,” Randy Binner, an analyst at Friedman, Billings, Ramsey Group Inc., said in an interview before the results. “At the end of the day, really the S&P 500 determines where the stock goes and what their opportunities are.”

Hartford, based in the city of the same name, has plummeted 84 percent in the last 12 months on the New York Stock Exchange, more than the 50 percent decline in the KBW Insurance Index. The S&P 500 slipped 12 percent in the first quarter and is down about 44 percent from its high of 1,565 in October of 2007.


Private investors have shunned life-insurance stocks, and Hartford’s request for $3.4 billion in government aid remains unanswered by Treasury more than five months after the insurer asked for a bailout. That’s pushed Hartford to reach out to rivals and seek bids for the company’s property-casualty business, people familiar with the matter said last week.

Hartford and its main rivals including MetLife Inc., the biggest U.S. life insurer, and No. 2 Prudential Financial Inc. are also accumulating losses on fixed-income holdings as the recession pinches borrowers. The industry has been battered by writedowns linked to the housing slump, and faces more losses as the recession spreads among companies that issued debt.

A raft of credit downgrades may make it harder for Hartford to compete against higher-rated life insurers like Prudential and New York-based MetLife. Hartford was cut three times this year by S&P, which said the insurer’s brand may be damaged.

Free Stuff

pdf  HIG Actionable Intelligence Update 8-12-08 2009-03-04 13:16:24 49.96 Kb

pdf  HIG Actionable Item 2008-11-22 06:32:24 189.75 Kb

spreadsheet  Hartford Insurance Actionable Opinion Note 2009-03-04 13:15:25 538.89 Kb

pdf  Hartford Insurance Group Forensic Analysis - Pro 2009-03-04 13:15:40 619.29 Kb

 Subscription stuff

spreadsheet Reinsurance Forensic Analysis Retail 2009-04-09 07:23:58 429.36 Kb

pdf  Reinsurance Forensic Analysis Professional 2009-04-09 07:25:35 714.65 Kb

pdf  Reinsurance Stress Test and Forensic Valuation - Pro 2009-04-27 10:20:23 1.19 Mb

pdf As I have been saying in the comments section, nothing has changed yet. The fundamentals and macro outlook are still very negative.