To Hartford Stakeholders:
In recent months, we have experienced a great deal of public speculation about our company and our future direction. The Hartford's recent overall financial performance has been disappointing and the difficult economic environment has placed significant pressures on some of our businesses. While many of our underlying operations are performing well, The Hartford was more affected by the market volatility than some of our peers, given the issues in our investment portfolio and the size of our variable annuities businesses.
In response, the company's Board and senior management have been engaged in an in-depth evaluation of The Hartford's business model and strategy, with the goals of building shareholder value, reducing risk and preserving capital. The analysis covered a wide range of options related to our businesses individually and in combination, and focused on required capital, the risks involved, and historical and prospective performance. As part of this analysis, we began and continue to take a number of actions that we have shared with you, including:
- secured a $2.5B investment from Allianz;
- cut the dividend on our common stock;
- taking significant steps to restructure our global Annuity business;
- exploring options for our Institutional Markets group;
- commenced the unwinding of higher-risk exposures in our investment portfolio; and
- reducing expenses.
Today, I would like to provide more clarity on our future direction. We have concluded that the best way to deliver long-term value to our shareholders is to return to our historical strengths as a U.S.-centric insurance company, with a focus on our strong portfolio of protection businesses, primarily property and casualty, group benefits and life insurance. We will also continue to operate strong wealth management and retirement businesses, including mutual funds, retirement plans and a restructured annuities business. As a result, we will move forward with both property and casualty and life businesses.
Although this has been an incredibly challenging period in our company's history, The Hartford has demonstrated strength and resiliency in the marketplace. We have grown new business premiums in several of our P&C lines while maintaining excellent underwriting results. We have also grown premiums in group benefits and our retirement plans and mutual funds businesses have delivered solid deposits in this difficult environment.
I want to thank you for your ongoing support of our organization. While we still have more work to do, I am optimistic about our future and know that The Hartford has the people, the commitment and the drive to deliver on our promises to our customers.
Sincerely,
Ramani Ayer
Chairman and CEO