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Christopher J. Swift, chairman and CEO of Hartford Financial Services Group Inc., joined the company as chief financial officer in 2010 from American International Group Inc. As part of the senior executive team led by the late Liam E. McGee, he was instrumental in Hartford's turnaround from TARP-funds recipient back to a profitable but slimmed-down insurer. He recently spoke with Business Insurance Editor Gavin Souter. Edited excerpts follow.
Q: How is The Hartford different today from the company you joined five years ago?
A: Five years ago, The Hartford was still a multiline company — property and casualty, life and annuity. The organization was coming out of the financial crisis, and Liam joined with the view, the mindset and the passion to turn around the company and restore it to glory.
Initially, the vision was to keep the multiline together, but as we got further into studying the business, we concluded that we needed to focus the organization. That culminated in the March 2012 announcement of getting out of the life insurance business, the retirement business, putting the variable annuity business into runoff and really focusing on the property/casualty business, both commercial and personal lines, along with group benefits and mutual funds. We thought those businesses could produce the best returns over a longer period of time. We thought those businesses would consume less capital, would actually generate capital to allow us the financial reengineering that we had to do.
Our strategy largely is intact, and now we're getting more refined and tactical about where we want to grow.
Q: Where would that be?
A: If you look back 20, 30, 40 years ago, The Hartford was, and still is, a national carrier, but we probably lost something in the last 10 to 15 years as far as risk-taking and risk appetite in broad property/casualty capabilities. We focused on our workers compensation product probably too much the last 10 years.
So really what we're trying to be is a broader product line player. In comp, we have wonderful capabilities, but we want to be a bigger property player, we want to be a bigger general liability player, we want to be a bigger commercial auto player, we want to be a larger and more competitive E&O and D&O player, and we have some other specialty businesses that we feel good at. We want to be more broad-based in those product lines, and we want to serve a more meaningful part of the real economy here in the U.S. — manufacturing, real estate, construction, hospitality, transportation. We have this national footprint, a great brand and wonderful distribution relationships.
Q: Are there any other businesses you are looking to dispose of?
A: The last sale we accomplished was the big Japanese variable annuity operation. What's left in the U.S. is still a sizable variable annuity platform that we're running off for the time being, but eventually we want to be completely out of it, and we'll look opportunistically at market participants and pricing and see if selling it is a good strategy.
Q: You chose not to replace Foundation Re III, the insurance-linked security protection you bought previously. What was the thinking behind that decision?
A: We're always interested in what our traditional reinsurance parties can bring to us, and we will continue to explore what the capital markets can bring, but this renewal season we just felt that we got everything we wanted and then some from our traditional marketplace. But our thinking would not change about using capital markets going forward.
Monica J. Lindeen is 2015 president of the National Association of Insurance Commissioners. She serves as Montana's commissioner of securities and insurance, a position to which she was first elected in 2008 and re-elected to a second term in 2012. She previously served in the Montana House of Representatives. Ms. Lindeen recently spoke to Business Insurance Senior Editor Mark A. Hofmann about the goals and challenges facing the NAIC. Edited excerpts follow.