(Updates with company comment in fourth paragraph.)
Oct. 6 (Bloomberg) -- Hartford Financial Services Group Inc., the seller of life insurance and property-casualty coverage, said market slumps and declines in customer retirement accounts cost the company about $500 million last quarter. The stock fell in New York trading.
The sum includes about $110 million tied to the Japan annuity business, according to a slide presentation today from Hartford, which is based in the Connecticut city of the same name. Hartford said its so-called core earnings were reduced by about $230 million from the costs tied to retirement products. Catastrophe claims cut core earnings by another $130 million.
Chief Executive Officer Liam McGee, hired in 2009, has curtailed the sale of equity-based retirement accounts called variable annuities to protect the company when markets decline. Hartford halted new sales in Japan in 2009 while retaining liabilities tied to annuities sold before the financial crisis. When stocks fall, Hartford’s annuity liabilities may increase.
“While challenges exist, our risks are significantly reduced and manageable,” the insurer said in the presentation.
The Standard & Poor’s 500 Index fell 14 percent in the three months ended Sept. 30, while Japan’s Nikkei 225 Stock Average slid 11 percent.
Hartford dropped 36 cents, or 2.1 percent, to $16.59 at 9:39 a.m. in New York Stock Exchange composite trading, the biggest decline in the 24-company KBW Insurance Index. The company has slumped about 38 percent this year.
--With assistance from Noah Buhayar in New York. Editors: Dan Kraut, David Scheer
To contact the reporter on this story: Andrew Frye in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Dan Kraut at email@example.com