October 01, 2012
CHICAGO--(BUSINESS WIRE)-- Fitch Ratings does not expect Prudential Financial Inc.'s (PFI) planned acquisition of Hartford Financial's individual life business to have an impact on existing ratings. The Outlook for the ratings of PFI and subsidiaries is Stable. See full list of ratings below.
PFI will acquire about $7 billion of general account assets and reserves, mostly universal life and variable life, through reinsurance transactions, plus $5 billion of separate account assets and reserves. The company will pay Hartford a ceding commission of about $615 million. The transaction will be funded through existing cash at the holding company. Fitch expects no material impact on financial leverage or insurance company capitalization as a result of the transaction, which is due to close in early 2013.
Fitch believes the Hartford acquisition makes sense from a strategic point of view. It is expected to bolster the U.S. individual life segment through growth in recurring premium and by providing a stable source of earnings and cash flows. It is also expected to provide a modest improvement in PFI's overall business profile.
Fitch last reviewed and affirmed PFI's ratings on April 19, 2012 and expects to complete an additional full review by the end of the year. The previous affirmation of PFI's ratings reflects Fitch's view that the company's financial performance and balance sheet fundamentals remain consistent with rating expectations.
Re-blogged from: Insurance News