Despite its name, at its heart, The Hartford Financial Services Group is an insurer with a range of commercial and personal property/casualty and life insurance products. Its commercial property/casualty operations include auto, liability, workers' compensation policies, as well as group benefits and specialty commercial coverage for large companies. The Hartford also offers consumer homeowners and auto coverage. Through its wealth management division, the company offers financial services such as mutual funds. The Hartford, in business since 1810, sells its products through a network of independent agents and brokerages.
Despite all of its efforts to recover from the financial crisis of 2008-2009 (which caused heavy investment losses for The Hartford) via cost-cutting and restructuring measures, in early 2012 the company began facing investor pressure to further shake up its operations. Investment group Paulson & Company, which holds about 10% of the company, pushed for The Hartford to separate its life and property/casualty operations by either exiting the life and annuity business or spinning off its property/casualty operations into a new division. After reviewing its options, The Hartford soon gave in to the demands, stating that it would hang on to its mutual funds business, but exit its annuity business, and review options to sell the bulk of its life insurance operations, including the individual life, retirement plans, and Woodbury Financial Services units.
Shortly after, Woodbury was sold to AIG, which added the business to its SunAmerica Financial Group. In early 2013 the company completed other planned asset divestitures (all of which were previously part of its wealth management division), including the sale of its retirement plans business to MassMutual for $400 million and the sale of its individual life business to Prudential Financial for $615 million. The company placed its individual annuity operations into runoff in 2012 and sold its annuity marketing and distribution operations to Houston-based Forethought Financial Group the following year. In mid-2013 it agreed to sell its UK variable annuity business to Berkshire Hathaway's Columbia Insurance for some $285 million.
The Hartford's restructuring efforts helped it return to profitability in 2010 and 2011. However, the reduced scope of its business operations caused a slight decline in revenues both years, and net income decreased about 60% in 2011 to $662 million (compared to nearly $1.7 billion in 2010).
Following the divestiture of most of its life and annuity operations, The Hartford is focused on growth of its property/casualty, mutual fund, and group benefits operations.
The company has been focused on growth in its commercial markets and consumer markets segments. Part of The Hartford's growth strategy lies in seeking marketing alliances. The Hartford's consumer markets property/casualty division already enjoys such an arrangement with an exclusive agreement to provide auto and homeowners polices to members of AARP (the American Association of Retired Persons). Pleased with the results of working with AARP, The Hartford has pulled back on mass marketing and is targeting other affinity groups, striking arrangements with the American Kennel Club, the Sierra Club, and the National Wildlife Federation during 2011.
European insurer Allianz owns a minority stake in The Hartford; the interest was gained when Allianz made a capital investment of about $2.5 billion in The Hartford to shore up the company's liquidity position and prevent a ratings downgrade in 2008. Allianz bought up both stock and debt to gain a 10% stake in The Hartford. Allianz also gained warrants that could allow it to acquire up to 20% of the company; however, The Hartford paid back the option warrants in 2012.