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Member, Beacon International Group, Ltd.
NEW YORKMoody’s Investors Service has affirmed the credit ratings of Hartford Financial Services Group Inc. and its key operating subsidiaries, and changed its outlook to “stable” from “developing,” the New York-based rating agency said Thursday.
Moody’s said the revised outlook reflects the stabilization of Hartford’s financial profile as a result of improved capitalization and flexibility of the parent company.
“Even though the Hartford continues to have considerable challenges with its life operations, we believe that the group’s overall credit profile has largely stabilized,” Moody’s Senior Credit Officer Paul Bauer said in a statement. “Substantial holding company liquidity and continued strong property and casualty performance largely mitigates the risk of further negative developments with annuity guarantees or investment losses.”
“Moody’s remains concerned in three key areas over the near term,” Mr. Bauer said in the statement. “First, the risk of further investment chargesparticularly given the group’s exposure to commercial real estate, structured securities and preferred stock of financial institutions.
“Second, the ongoing exposure to guarantees embedded in the company’s in-force variable annuity policies. And third, possible disruptions or charges from operational changes given potential shifts in the company’s strategic direction with a new (chief executive officer) and an expected new (chief financial officer). Nevertheless, we believe that the Hartford’s current capital position is robust enough to withstand a certain degree of volatility and uncertainty associated with these concerns.”
Hartford named former banking executive Liam E. McGee as its chairman and CEO in late September.
Before Thursday, Moody’s most recent rating action occurred in May, when it affirmed Hartford’s ratings and revised its ratings outlook to “developing” from “negative.”