Connecticut financial services firm to cut 1,500 jobs, stop insuring insurance companies
Monday, May 12th 2003, 12:00 am
By: News On 6
HARTFORD, Conn. (AP) _ The Hartford Financial Services Group Inc. announced a major restructuring Monday, saying it will cut 1,500 jobs and is getting out of the business of insuring other insurance companies.
The company made its decision after studying its potential exposure to asbestos claims, Ramani Ayer, chairman and chief executive officer, said in a news conference.
Because of concerns over asbestos liability, Ayer said, the company also announced it is boosting its reserves by $3.91 billion to $5.9 billion, and is taking a $1.7 billion charge in the first quarter.
The company has been a ``small player'' in the property-casualty reinsurance business and couldn't justify the capital investment required to continue, Ayer said.
The job cuts translate to 850 people being laid off and an additional 650 vacant positions being eliminated, he said. The company employs 29,000.
Most of the layoffs will be in the property-casualty reinsurance division, Ayer said. Others will come from consolidation of corporate services.
``These reductions are painful, but necessary,'' Ayer said. ``We recognize the impact of these steps on many who have been contributed to our company.''
The Hartford reported a strong increase in earnings for the fourth quarter of 2002 in January, up 79 percent to $258 million from the same period in 2001.