(Bloomberg News) Hartford Financial Services Group Inc., the insurer that repaid a $3.4 billion bailout, may have to bolster its Japan unit as last month's earthquake cuts the value of securities tied to client guarantees.
"The company may need to increase the capital it holds to support its Japanese annuity business, but we believe it maintains appropriate capital redundancy to withstand this," Standard & Poor's said April 19 in a statement on Hartford, based in the Connecticut city of the same name. S&P raised its outlook on Hartford's BBB credit rating to "stable" from "negative" last month.
Hartford's obligations in Japan stem from guarantees made to clients that bought variable annuities, the equity-based retirement products. In 2009, the company halted new sales in Japan while retaining liabilities tied to annuities sold before the financial crisis. When Japanese stocks fall, those liabilities may increase.