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The Hartford Financial Services Group, Inc. Message Board

  • higemp higemp Sep 17, 2012 8:13 AM Flag

    Sun Life Thought

    I noticed a brand recognition piece with Sun Life at the CNBC site. One of the areas in focus was Disability. I wonder if HIG is considering selling the Disability operation to more keening focus on P&C? I believe the market would react favorability to this surprise.

    Sentiment: Hold

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    • Maybe. I think they'd wait until the business is in a little better shape; its profitable but not resoundingly so and their top line is shrinking (-10% YTD 2Q 2012 vs 2011). They seem to also have a strategy linking disability sales distribution to their P&C distribution, which may make theoretical sense, but agents/brokers aren't organized that way, so not sure how much traction it's gotten.

      Then again, if someone offers them crazy money for it, I'm sure they'd consider it, but with a business which has $4.5B in revenue and barely $100MM in net income, its not at the peak of its valuation.

      • 1 Reply to silver87309
      • There is a Disability and P&C distribution program but it's not working as envisioned for the reason you cited. For me, the key questions are why is the business unprofitable and shrinking. I can think of several reasons but I don't know enough about it. I'm a P&C person.

        I thought the Sun Life piece was interesting because I don't recall Sun Life doing this before.or at least for many years. This would give them a huge footprint. So the question becomes why is HIG Disability unprofitable and how is it performing relative to its competitors. If the unprofitability is a Hartford problem, there may be an opportunity. In WC, P&C lost their focus for a while given their need to help the Life Operation. I wonder if Disability had a similar growth strategy which negatively impacted their bottom line. If HIG believes in refocusing their business, then Disability and ultimately the Mutual Fund businesses may go as well.

        Sentiment: Hold

 
HIG
37.79+0.21(+0.56%)Sep 18 4:01 PMEDT

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