Hartford Exec: Allianz Deal Is An Investment

The move by Allianz S.E. to put $2.5 billion into Hartford Financial Services Group Inc. is simply an investment, not a prelude to a takeover, a top Hartford executive says.

Tom Marr, president of Hartford, Hartford, emphasized the limited nature of the arrangement today during a telephone interview.

“Allianz’s capital injection is an investment,” Marra said. “They will have no board seats, no management oversight. They are an investor.”

Hartford decided to make the deal because it believes demonstrating superior capital strength is important during a period of market turmoil, Marra said.

Hartford had $1 billion more in capital than it needed to maintain its ratings even before it received the capital injection, but it decided that, “in this kind of environment, it is critical that you take this opportunity to remain one of the strongest,” Marra said. “This will help us weather the volatility of market, even if it gets worse.”

Joshua Shanker, a securities analyst at Citi Global Markets, wrote this morning that, “given the size of Hartford’s in-force book combined with the slowdown in its recent business production, we have viewed it as ripe [for] acquisition.”

Marra says Allianz invested in Hartford because it has great confidence in Hartford and in Hartford’s managers.

“They are investing on an attractive basis in a brand like the Hartford,” Marra said. “Obviously, we view this as allowing us to continue to operate autonomously in the market.”