The Hartford CEO seeks acquisition targets

The Hartford CEO Chris Swift is looking for bolt-on acquisitions in commercial lines and specialty while reinsurance business would not be a driver for a potential transaction.

“From a strategic perspective, we believe acquisitions can help build greater competitive advantages and accelerate earnings growth,” Swift said during the insurer’s first quarter results conference call.

“The Aetna acquisition is an example of that, and we’re really pleased with its performance,” he added.

In October 2017, The Hartford entered into a definitive agreement to acquire Aetna’s US group life and disability business for cash consideration of $1.45 billion. The acquisition deepens and enhances The Hartford’s Group Benefits distribution capabilities and accelerates the company’s technology strategy, according to a company statement.

Now Swift is looking for acquisitions in the commercial lines business where The Hartford is currently building broader risk and underwriting expertise organically. “We will consider financially accretive acquisitions that accelerate these goals. And to-date the deals that we have done in commercial lines have been smaller bolt-on transactions,” Swift noted.

Past commercial acquisitions include the takeover of Northern Homelands Company, the holding company of Maxum Specialty Insurance Group, for $170 million in cash unveiled in March 2016.

Maxum was a very strategic opportunity for The Hartford, said president Doug Elliot. “We didn't have E&S [excess and surplus] talent in this organization, we didn't have relationships on the distribution side. And we clearly wanted to challenge ourselves with a product breadth opportunity in the small commercial and middle market arena,” Elliott explained.

Swift added: “We are focusing on the bolt-on category.”

“As the specific areas of interest, we are particularly focused on specialty lines and industry verticals,” Swift said, noting that he is not particularly interested in acquiring reinsurance activities which The Hartford does not currently view as strategic.

“That should not imply we would never buy a company that has a minor or small reinsurance portfolio, but it does mean that the majority of the business would need to align with or complement our commercial lines strategies,” Swift said.

For the first quarter of 2018, The Hartford reported after-tax income from continuing operations, of $428 million compared with $303 million in first quarter 2017. The $125 million increase was due to higher commercial lines and personal lines P&C underwriting results, including lower catastrophe losses, the company noted. The P&C combined ratio improved 4.3 points from first quarter 2017 to 93.1 percent.

Make sure you are GDPR compliant and  confirm your email address to keep getting our daily emails

More of today's news

Tokio Marine Kiln appoints new group chief operating officer

Insurtech LeaseLock secures $10m in funding

Willis Re appoints MD of EMEA Life & Health from Guy Carpenter

Don't miss our insurtech email newsletter - sign up today