Following heavy lobbying by hedge fund manager and major shareholder John Paulson of Paulson & Co., the Hartford Insurance Group said Wednesday that it was exiting its life insurance and individual annuity businesses and exploring the sale of its independent broker-dealer, Woodbury Financial Services, in order to concentrate on its mutual fund and property and casualty operations.
The Hartford said in a statement that it would stop new sales of its individual annuity products on April 27 and would also “pursue sales or other strategic alternatives for our Individual Life and Retirement Plans businesses,” in a process that the company said would take 12 to 18 months. The company also said all existing policies would remain in force and “be fully supported according to the contract terms.”
Hartford chairman, president and CEO Liam McGee (left) says in the statement that the company’s “sharper focus will lead to an organization that, over time, will be positioned for higher returns on equity, reduced sensitivity to capital markets, a lower cost of capital and increased financial flexibility.”
Woodbury, whose representatives voted it a Broker-Dealer of the Year for 2011 in Investment Advisor’s annual reader survey, reported it had 1,550 producing reps as of April 1, 2011. Led by president and CEO Patrick McEvoy, Woodbury had average annual GDC per rep of $147,000 in 2010, and gross revenue that year of $238.7 million.
Those numbers for 2010 placed Woodbury in 16th place among independent broker-dealers as measured by both number of reps and annual revenue in Investment Advisor’s annual Broker-Dealer Survey published in June 2011.
According to the company’s presentation to analysts and media Wednesday, the number of Woodbury reps as of year-end 2011 was 1,400, while revenue for the year from the BD was $250 million.