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The Actuary The magazine of the Institute & Faculty of Actuaries

Hartford Group suffers 50% one-day fall

Hartford Financial Services Group lost 50% of its value in one trading day, following comments from Barclay’s analyst Eric Berg saying that the group had “precious few options” for raising capital to avoid a ratings downgrade.

In September, Moody’s Investor Services warned that Hartford’s losses on mortgage-backed securities and other corporate holdings may lead to a downgrade. In October, Hartford received a $2.5bn capital injection from Allianz SE. However, Hartford CEO Ramani Ayer said he could not rule out further rounds of capital raising.

“Management’s decision to avoid a concrete numerical portrait of capital adequacy has caused investors to sell,” a Citigroup analyst said in an October note.