Declaring that the company has learned its lesson from the economic crisis, Hartford Financial Services Group Inc.’s chief executive outlined a new company strategy for growth during its investor meeting yesterday in New York.
The meeting, broadcast live online, featured the company’s chairman, president and chief executive officer, Liam E. McGee, describing a corporate structure that will concentrate its sales efforts in 3 distinct areas and pay close attention to enterprise risk management.
“We learned our lesson from the last 2 years,” McGee told investors as he outlined a multi-tiered management and committee structure charged with identifying and evaluating the company’s risks.
The enterprise risk management approach will consist of an independent chief risk officer reporting to the CEO, a risk committee of the board of directors and an executive risk committee chaired by the CEO.
The insurer just completed repaying $3.4 billion it borrowed from the U.S. Treasury under the Treasury’s Troubled Asset Relief Program after its life operations suffered severe investment losses and the need to deliver on guaranteed returns for variable annuities.
He said after “a comprehensive review” of the company and a capital raise of close to $3 billion, the company now “has a balance sheet that can sustain any reasonable stress scenario, including severe market and credit stresses.”
Under stress scenarios the company outlined, a worst case depletion of capital in 2010-2011 would still leave the company with $1.9 billion in capital, the Hartford said.
McGee said the company will refocus around its strong brand and concentrate its efforts in 3 groups: