UPDATE: Hartford Financial: Search For New CEO Making Progress
31 7월 2009 - 1:12AM
Dow Jones News
Hartford Financial Services Group's (HIG) search for a new chief
executive is moving along, despite the restrictions placed on the
company because of its acceptance of government funding.
"The search committee has been directed by the board and they
have been very pleased with their progress," said Ramani Ayer,
Hartford chairman and chief executive, during the company's second
quarter earnings conference call Thursday. Ayer said nearly two
months ago he plans to retire by the end of the year.
Whoever takes the helm will be managing a company with a
different set of variable annuity products than the company has
offered in past years, Ayer said.
Hartford, and other variable annuity providers, have undertaken
a revamp of their most popular features: those that guarantee
minimum returns or death benefits on customers' deposits.
Hartford's revamped annuities may take some time to catch on,
Ayer said. "I think [it] will work very well over the long-term,
but it'll take a bit to get it established in the marketplace," he
said during the call.
Shares of Hartford surged 10.8% in recent trading to $16.56
each, after Hartford reported better-than-expected second-quarter
results.
On Wednesday after the market close, Hartford reported a loss of
$15 million, or 6 cents a share, compared with a year-ago profit of
$543 million, or $1.73 a share. It was Hartford's fourth
consecutive quarterly loss.
The latest results included a deferred-acquisition-costs unlock
gain of $360 million, or $1.11 a share.
Hartford had $649 million in net realized losses, compared with
a net loss of $156 million a year earlier.
The operating profit was $1.90 a share, down 14% from $2.22 a
share a year earlier. Analysts projected per-share earnings of
$1.16.
Hartford, along with other companies that have accepted
government help, must adhere to "significant limitations" on pay
and bonuses for top executives, which the company listed as a new
risk factor in its quarterly report. It said the limitations could
make it difficult to attract and retain executive officers and
other key personnel.
During the call, Ayer and Lizabeth H. Zlatkus, Hartford's chief
financial officer, gave some details of hedging procedures the
company has in place to minimize the company's risk-based capital
volatility going forward.
Zlatkus said one aspect of its hedging plan is to set up a
captive insurer by the end of the year.
In the company's quarterly report, it listed its hedging
activities as a risk factor that could produce "greater U.S. GAAP
earnings volatility" and potentially "material charges to net
income in periods of rising equity market pricing levels."
-By Lavonne Kuykendall, Dow Jones Newswires; (312) 750 4141;
lavonne.kuykendall@dowjones.com