"There is no silver bullet," Ransom wrote in a report dated Feb. 9, a day after Paulson said on Hartford's earnings call it needed "to do something drastic" to boost returns. "A spin-off is essentially impossible without a dilutive equity capital raise," he said.

Brian Schneider, a Chicago-based insurance analyst at Fitch Ratings, said yesterday a potential split "raised questions" about how Hartford's life business would pay its debt as it has struggled with lower margins and increased costs.

Debt Payments

Regulators could also block a breakup to protect customers from the risk that the life unit wouldn't be able to repay its obligations, according to Stifel Nicolaus' Meyer Shields.

Third-quarter net income at the division fell 84 percent to $63 million from a year earlier, according to data compiled by Bloomberg. That's less than any quarter since it lost money in the same three-month period in 2009.

"If you've got a unit whose earnings are weak, and you've got significant policyholder liabilities that will emerge over time, I think regulators would hinder that sort of breakup," Shields said in a telephone interview from Baltimore. "The value of the standalone life company is lower than the more optimistic assumptions that John Paulson described."

Shields said a "very rough" estimate of $25 a share would be a better gauge of Hartford's value in a breakup. He based the projection on each unit's earnings.

Randy Binner, an analyst at FBR in Arlington, Virginia, also said $25 a share would be a more realistic projection. That would imply a return of just 1 percent for Paulson, based on the firm's per-share cost.

Binner's sum-of-the-parts analysis used 9 times estimated 2012 earnings for the property-casualty business and 7.3 times projected profit for the life unit.

While a split or a spin-off is ultimately unlikely, Dowling & Partners' Ransom said a more feasible option would be selling the property-casualty business. At a sale price of 1.25 times book value for the property-casualty business, the proceeds would still only give Hartford a value of $21 a share.