The restructuring of the state's largest insurance employer has begun, but the impact on employees at its Simsbury campus remains unknown.
On Thursday, The Hartford Financial Services Group announced an agreement to sell its Individual Annuity business to Forethought, a Houston, TX, based financial services company. The terms of the sale were not disclosed.
The sale will include product management, distribution and marketing units, as well as the products currently being sold, according to a statement.
The sale of the business is the first step in a major restructuring the company announced in March that includes the sale or other alternatives for its Individual Life business, Woodbury Financial Services and Retirement Plans. The company also plans to move its mutual fund business to Radnor, PA.
The question on the minds of Simsbury residents and town officials since the company first announced the restructuring in March has been the impact on the 1,900 employees at the Simsbury campus. The Individual Annuities business operates in Simsbury and Wayne, PA.
There is also great concern over the possible loss of tax revenue.The Hartford is the town's largest taxpayer, contributing $1.09 million in property taxes in 2011. The Hartford makes up 2.19 percent of the town's net capital on the grand list.
Officials said the majority of the current employees with the Individual Annuities business, part of the company's wealth management arm, will be offered positions with Forethought, according to a statement. The company has not said how many employees work in the Individual Annuities business.
“We are pleased to announce an agreement with Forethought, an organization of proven integrity and growing suite of high-value products,” Wealth Management division President David N. 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.”
The company initially said it would discontinue the sale of new annuities products but under the agreement with Forethought it will continue to write new business during a transition period. Forethought will assume expenses and risk for these sales through a reinsurance arrangement, according to a statement.
“Forethought is excited to expand further into the annuity business, given the growing demand for income products in retirement and the demographic trends unfolding in the U.S.,” John A. Graf, Chairman, President, and Chief Executive Officer of Forethought said. “Being able to acquire a team of top-tier annuity professionals from The Hartford will allow us to capitalize on this opportunity at an accelerated pace.”
Officials said the restructuring process is expected to take 12-18 months. Simsbury town officials said they will be working closely with The Hartford to monitor the impact on the town.