NU Online News Service, May 12, 2003, 12:58 p.m. EDT – Hartford Financial Services Group Inc., Hartford, says it will eliminate the jobs of 850 workers and take other steps to cut costs and raise capital.
Hartford executives discussed the changes after warning that the company will report a $1.4 billion net loss for the first quarter on $4.3 billion revenue, compared with $292 million in net income on $4 billion in revenue for the first quarter of 2002.
The full earnings report is scheduled to appear Tuesday.
Hartford is attributing the loss to a $3.9 billion increase in reserves for asbestos claims at its property-casualty unit.
Operating income, which includes $34 million in realized investment losses but excludes the asbestos charge, increased to $340 million, from $293 million.
Hartford says the job cuts it is planning will “come primarily from the property-casualty businesses” and, together with the elimination of vacant positions, reduce its staff size about 5%. The company is also planning to sell its property-casualty reinsurance unit and issue more than $1.8 billion stock, notes and other securities.
In a related announcement, the New York office of Moody’s Investors Service says it is affirming the insurance financial strength ratings of Hartford’s life and property-casualty insurance subsidiaries.