The company also outlined additional details on the company's estimated year-end risk-based capital (RBC) ratio for Hartford Life and Accident Insurance Company (HLA) at various S&P 500 levels. An RBC ratio of 325 percent or higher has historically been associated by various rating agencies with AA level ratings.
"The Hartford is financially strong and well capitalized," said Ramani Ayer, The Hartford's chairman and chief executive officer. "The company's RBC ratio, including a number of provisions, is estimated to be above 400 percent at year-end S&P 500 levels of 900. Our capital position is more than sufficient for current market conditions and in the event markets deteriorate further.
"In addition, should market conditions become more severe, we have access to additional sources of capital without tapping public markets or other capital raising options. These sources include capital in the parent company and the property and casualty subsidiaries, a $500 million contingent capital facility and a $1.9 billion bank credit facility. The company's property and casualty subsidiaries will continue to be capitalized at or above the levels historically associated with AA level property and casualty insurers," added Ayer.
Given uncertainties regarding the application of rating agency models and the difficulties of estimating capital margin in an environment of severe capital market volatility, the company intends to present its capital position for its life operations in terms of RBC ratio.
According to the National Association of Insurance Commissioners, the risk-based capital ratio is a measurement of the amount of capital (assets minus liabilities) an insurance company has as a basis of support for the degree of risk associated with its company operations and investments.
About The Hartford
The Hartford, a Fortune 100 company, is one of the nation's largest financial services companies, with 2007 revenues of $25.9 billion.