(Steve Kee is a spokesman for Sun Life. In the item
"=WSJ:Hartford Fincl In Talks To Sell Life Insur Unit To Sun Life
-Source," published at 4:19 p.m. EST, Kee's last name was
misspelled. A correct version follows.)
By Leslie Scism
Of THE WALL STREET JOURNAL
Slammed with two credit downgrades in the last week and its
stock lately in free fall, Hartford Financial Services Group Inc.
(HIG) is in talks to sell most of its life insurance unit to
Canada's Sun Life Financial Inc. (SLF), according to a person
familiar with the situation.
Other options are under consideration, agreement may not be
reached and "nothing is imminent," the person said. The talks
earlier were reported by Bloomberg News.
The talks come at a time of turmoil for the life-insurance
industry in general. Insurers make money by collecting premiums on
policies, then investing that money in the credit markets. In good
times, they make money on both ends - investment gains and
underwriting profits. Amid a meltdown in stock and bond markets,
the last several months have been brutal for many companies.
(This story and related background material will be available on
The Wall Street Journal Web site, WSJ.com.)
Hartford's shares have been down more than 90% over the past 12
months, making the company one of the hardest hit of the life
insurers. Hartford posted a $2.6 billion third-quarter loss, hurt
by some of the steepest investment-portfolio losses of the major
life insurers, and that was followed by an $806 million
fourth-quarter loss.
On Wednesday, shares of Hartford rose about 11% to $5.14 in 4
p.m EST composite trading on the New York Stock Exchange.
Sun Life Financial, which earned $785 million in 2008, has
signaled an interest in doing deals. Donald A. Stewart, Sun Life's
chief financial officer, last month said in its fourth-quarter
earnings press release: "Our strong capital base provides added
protection from market volatility, as well as enhances our ability
to make acquisitions and expand our business." Sun Life left its
share dividend unchanged in the last quarter, at 36 cents per
share. The company reported a fourth-quarter after-tax gain of $825
million from the sale of its interest in CI Financial.
Steve Kee, a spokesman for Sun Life, said Wednesday the company
is "actively looking at potential opportunities in key
markets."
Shares of Sun Life Financial rose about 3.8% to $14.05.
(Lavonne Kuykendall and M.P. McQueen contributed to this
article.)