Ayer: The Hartford not selling units

Ramani Ayer, chairman and CEO of Hartford Financial Services Group Inc., told employees today in a memo that the 199-year-old insurance company will remain intact.

In the memo obtained by the Hartford Business Journal, Ayer said that the company has “concluded that the best way to deliver long-term value to our shareholders is to return to our historical strengths as a U.S.-centric insurance company, with a focus on our strong portfolio of protection businesses, primarily property and casualty, group benefits and life insurance …  As a result, we will move forward with both property and casualty and life businesses.”

The Hartford’s stock price today is trading near $16, up 9 percent.

Last week, the insurer announced it had received preliminary approval for $3.4 billion from the federal government’s Troubled Asset Relief Program.

Analysts reacted to that news positively and said it would help boost the company’s capital position and possibly save the company from having to sell pieces of itself in order to raise more money.

Ayer’s announcement today confirms those notions, and ends months of speculation about the company’s short-term future.

“While we still have much more work to do, and I don’t want to minimize the difficult steps and decisions ahead of us as we adjust our operations to meet the challenges of an increasingly changing business environment, I am optimistic about the future of our company,” Ayer said in the memo. “I have no doubt that we have the people, the commitment and the solutions to successfully compete in the marketplace, now and in the future.”

In the memo Ayer called The Hartford’s recent financial performance “disappointing” and said that the company has been more affected by the market volatility than some of its peers.

Over the last six months The Hartford has taken several measures to solidify its financial position including getting a $2.5 billion investment from German insurer Allianz SE, cutting the dividend on its common stock, restructuring its ailing variable annuity business and reducing expenses.