Hartford Financial Services Group Inc. Ratings Affirmed, Hartford Life & Accident Upgraded To 'A+'; Outlook Stable

  • We view Hartford Life & Accident Insurance as core to Hartford Financial Services Group.
  • We raised our issuer credit and financial strength ratings of Hartford Life & Accident to 'A+.'
  • Our ratings affirmation on Hartford Financial Group (Hartford) reflects its enhanced strength of its business position from key operations, including the recent and pending acquisitions, and prospective view of very strong capital and earnings.
  • The stable outlook is based on our expectations that Hartford will maintain stable underwriting results and very strong capital.
NEW YORK (S&P Global Ratings) April 15, 2019--S&P Global Ratings said today it raised its long-term issuer credit rating on Hartford Life & Accident Insurance Co. (HLA) by one notch to 'A+' from 'A'. At the same time we affirmed our 'BBB+' long-term issuer credit and 'A+' long-term issuer credit and financial strength ratings on Hartford Financial Services Group Inc. and its core operating subsidiaries (collectively, Hartford), respectively. The outlook is stable.
The upgrade of HLA reflects our improved view of the group life and group benefits business, which we consider core to Hartford under our group rating methodology criteria. HLA's operations support Hartford's multi-segment strategy and competitive position as the second-largest competitor in the group benefits market, following its acquisition of Aetna's group benefit business. We believe HLA will continue to expand its breadth and scale by leveraging its capabilities and maintaining a market-leading position in group life, disability, and voluntary products.
The stable outlook reflects our view that Hartford will maintain very strong capital as per our risk-based capital model. We also expect the company to maintain market-leading positions in group benefits and small commercial, while improving the financial performance of its personal-lines business.
We might lower the ratings over the next 24 months if, contrary to our expectations, capital adequacy deteriorates below strong for a prolonged period, leading market positions erode, earnings weaken to substantially less than our base-case assumptions, or weakened fixed-interest coverage falls to consistently less than 4x.
An upgrade in the near term is highly unlikely unless Hartford's operating performance, particularly its overall P/C operations, improves to a level comparable to higher-rated peers'.
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