Hartford Financial Services Group Inc. is seeking bids from rivals including Travelers Cos. for its flagship property insurance business, Bloomberg News is reporting today, citing people familiar with the matter.
Bloomberg News says in its online report that it is a sign that damage from the financial crisis may lead to a wholesale breakup of the 199-year-old insurer.
Merging the businesses could portend job losses in Hartford. Hartford Financial was formed here in 1810 and more than a third of its 31,000 employees are based in the state, it said last year. Travelers began in Hartford in 1864 and still has six buildings and some executive offices in the city, it said in a February regulatory filing.
The Hartford, pummeled by credit downgrades after losses in its life division, solicited offers for its profitable property and casualty unit in recent weeks, Bloomberg said, citing people who declined to be identified because the talks are private.
Travelers and Ace Ltd. may show interest, the people said, and Allianz SE already has a $2.5 billion stake in Hartford. Citigroup Inc. estimates the unit is worth $4 billion to $8 billion.
Chief Executive Officer Ramani Ayer, 61, is weighing more drastic options after Munich-based Allianz’s October cash infusion failed to stave off rating downgrades. The firm had a market capitalization of about $3.1 billion on the New York Stock Exchange yesterday, implying a negative value for the money- losing life insurance and retirement operations.
Talks earlier this year to sell parts of the life operations to Canada’s Sun Life Financial Inc. ended without a deal, the people said. Hartford continues to seek other buyers for the parts of its life division that sell group benefits, the people said.
Shannon Lapierre, a Hartford spokeswoman, declined to comment, as did Shane Boyd of New York-based Travelers, Sabia Schwarzer of Allianz, and Stephen Wasdick of Zurich-based Ace. Schwarzer described Allianz’s investment in Hartford as “purely financial.”
