As The Hartford sells off lines of business this year, CEO Liam E. McGee said Tuesday, company executives have worked to minimize job losses.
Hundreds of employees at the company — Connecticut's largest insurance employer — will at least have an opportunity to continue working in the region when The Hartford sells its retirement services to MassMutual later this year. The deal affects 1,300 workers, including 700 in Greater Hartford.
"I think MassMutual is going to offer jobs to virtually all of those employees," McGee said. "They're really interested in adding the small-, middle-sized retirement business to their portfolio, and it positions them really nicely to be a leader in that business. That's good for our employees. They can continue their career in the space that they love with a winner."
McGee sat down Tuesday with Courant reporters for the first time since The Hartford Financial Services Group announced on March 21 that it would sell off less-profitable lines of business — life insurance, annuities and retirement services — in order to focus on property-casualty, mutual funds and group benefits. The goal is to have a stronger, more profitable company that can use its capital to buy back shares, make acquisitions, and pay off debt rather than fill in losses from under-performing business units.
While The Hartford's executives make a leaner insurance company, however, some workers have wondered what will happen to their jobs.
It's apparent that many of The Hartford's displaced workers have — or will have — job offers that allow them to stay relatively close to home. It's not clear if those workers will still have jobs in the long term if, and when, companies that buy The Hartford's life insurance, retirement, annuity and brokerage businesses look to cut costs and become more efficient.
"My job is to get the best return on the businesses we're selling, but we were very focused on trying to be sure that the buyer, if possible, was a strategic buyer who really valued the capabilities they were getting and the employees they were getting," McGee said.
Since March, The Hartford has announced the sale of three parts: Woodbury Financial Services brokerage to American International Group for $115 million; Retirement Plans to MassMutual for $400 million; and aspects of its Individual Annuity business to Houston-based Forethought for an undisclosed price. The company also is working on a sale of its life insurance business.
MassMutual spokesman Mark Cybulski said it is too early to speculate about how The Hartford's retirement-services workers might blend with MassMutual's operations in Enfield and Springfield, and how many will be needed in the long term. During an acquisition, companies often look at "overlap," or jobs that could be eliminated for efficiency.
"When we close the transaction, The Hartford's retirement-plans employees are going to become part of MassMutual retirement services division," Cybulski said, noting that the acquisition is expected to close late this year. "So, they are going to become MassMutual employees, but what happens after that … it's premature to speculate beyond that."
Once the deal goes through, management from MassMutual and The Hartford Retirement Plans business will create a retirement services business "that builds on the best of both organizations," which will include "determining the optimal organizational structure," Cybulski said.
A much smaller line of business at The Hartford, the individual annuity business, escaped being shut down entirely.
In March, The Hartford initially said it would end new sales of its individual annuity business, meaning that there were no plans to continue the products and about 180 workers throughout the country might have lost their jobs.
However, The Hartford found a buyer — Houston-based Forethought, a financial services firm — for new individual-annuity products and related services. That means about 100 employees, including 40 in Connecticut, will get to keep their jobs and work for Forethought. Others left The Hartford before Forethought extended job offers.
"It would have been easy for us to just shut it down and sever the teammates," McGee said of The Hartford's Individual Annuity business. "We didn't do that. We worked really hard at finding a party that wanted to start this business. And I think, if you talk to those people that went to Forethought, they're pretty excited about being able to continue their career in the industry they love, which is the annuity business."
McGee added that Forethought wants to maintain a presence in Connecticut. In addition to the 40 employees that the business has in the state, 60 will remain with Forethought at offices in Greater Philadelphia and elsewhere in the country.
"Forethought really wants to keep all the people," he said. "They want to keep the people. So, they're going to keep them here. … Those that are in Connecticut are going to stay here. I think they've actually found space for them already in the Greater Hartford area."
The sale of Woodbury Financial, based in Oakdale, Minn., does not significantly affect Connecticut employment. Woodbury employs 200 people in home offices in Minnesota and is a broker-dealer of 1,400 independent representatives across the U.S. who sell life insurance and investment products, including those of The Hartford.
"Woodbury, basically, is going to be left to run as is," McGee said.Copyright © 2015, Los Angeles Times