The Hartford has sold its variable annuity marketing business as part of its effort to reduce its role in the life insurance business.
The Hartford officials announced Thursday that it had signed an agreement to sell the VA marketing unit to Forethought, a privately held diversified financial services company.
The sale will include all individual annuity new business capabilities, consisting of product management, distribution and marketing units, as well as the suite of products currently being sold.
The terms of the agreement were not disclosed, but are not considered material to The Hartford’s operations or financial results, its officials said.
The Hartford announced on March 21 its plans to divest its annuity operations in order to concentrate on wealth management and its property and casualty business.
At the time, The Hartford CEO Liam McGee said the company will stop new annuity sales effective on April 27 and expected to take a related after-tax charge of $15 million to $20 million in the second quarter of 2012.
At the time, The Hartford said it would stop selling new annuities as of today’s date so the implication of the announcement to sell the marketing unit to Forethought implies that it hopes it will be a seamless sell-off.
Specifically, The Hartford said that as part of the agreement The Hartford will continue to write new annuity products during a transition period and Forethought will assume all expenses and risk for these sales through a reinsurance arrangement.
The agreement does not include The Hartford’s in-force annuity book of business, according to David N. Levenson, president of The Hartford’s Wealth Management division.
Levenson said that he expects that the “majority” of the current employees that support The Hartford’s Individual Annuity new business capabilities will be offered positions with Forethought.
“We are pleased to announce an agreement with Forethought, an organization of proven integrity and a growing suite of high-value products,” Levenson said, “Over the last 12 months our individual annuity team has done a tremendous job rebuilding our market presence through differentiated products and best-in-class distribution. Building on this track record, I am confident the business will thrive under Forethought’s ownership.”