Summary
The Hartford Financial Services Group, Inc. (HIG) filed an 8-K on April 2, 2010, to report on financial and operational updates as of April 1, 2010. The company announced an estimated $20 million charge for the first quarter of 2010 due to recent federal legislation impacting future deductions for retiree health care costs. This legislation, effective in 2013, will reduce the tax deductibility of these expenses. Additionally, the filing details proactive measures taken by The Hartford to manage its investment portfolio risk. The company increased its holdings in investment-grade corporate securities from $33 billion to $35 billion (fair value) by February 28, 2010, out of a total of $37 billion in corporate securities. Significant progress has been made in reducing real estate-related investments, with approximately $700 million sold and net unrealized losses on these assets decreasing from $3.9 billion to $3.3 billion.
Key Highlights
- 1Anticipated $20 million charge in Q1 2010 due to federal legislation affecting retiree health care cost tax deductions starting in 2013.
- 2Increased exposure to investment-grade corporate securities to $35 billion (fair value) as of February 28, 2010, from $33 billion at year-end 2009.
- 3Total corporate securities investments valued at $37 billion as of February 28, 2010.
- 4Sold approximately $700 million of commercial real estate-related investments through February 28, 2010.
- 5Reduced net unrealized losses on real estate-related assets from $3.9 billion (December 31, 2009) to $3.3 billion (February 28, 2010).
- 6The reduction in real estate-related unrealized losses was primarily attributed to improved market pricing.