Late breaking news this afternoon from Daily Finance reports that earlier today, Prudential has reached an agreement to purchase the individual life business of the Hartford. Now, we've all known for months that Hartford has been searching for buyers of its various units. Back in August, Woodbury Financial, the Hartford's broker-dealer was purchased by AIG for a bit over the $100 million mark. The press release reported these details regarding the agreement reached between Prudential and the Hartford:
Under the terms of the agreement, Prudential will pay The Hartford cash consideration of $615 million and primarily will receive approximately $7 billion of general account investment assets and corresponding reserves, and rights and obligations with respect to approximately $5 billion in separate account assets and corresponding liabilities, based on statutory balance sheet values as of June 30, 2012. The cash consideration consists primarily of a ceding commission to provide reinsurance for approximately 700,000 Hartford life insurance policies with face amount in force of approximately $135 billion.
This acquisition will now make Prudential one of the five largest individual life insurers in the country as it relates to annual premium received. It seems that for the immediate term not much will change, all business will still be issued under the Hartford's issued companies etc. And of course the deal is pending regulatory approval but it looks like the deal will close in the early part of 2013.
We'll keep you posted as we learn more about how this will impact the industry going forward.
