The Hartford - Neutered Stag?

nodoodahs · Moderator Joined: 06 May 2005 Posts: 2408

The Hartford Financial Group (HIG), a.k.a. "The Neutered Stag," took one on the ... chin today, hitting a 10-year low.

Chart

Why "The Neutered Stag?" In a fit of political correctness over a decade ago, they trimmed their logo's ... equipment. Apparently someone found it offensive. Oh, bother.

The news flow suggests speculation caused by off-the-cuff comments from Harry Reid. Maybe.

I do know that, of the top 16 U.S. life insurers, The Hartford Financial Group (HIG) had the largest total reported realized losses ($1,220,000,000) as of March 31, 2008. Second on that list was Prudential, followed by Metlife Inc, then Allstate. That was March; this is now. That $1.2 billion included life operations only and also included $650,000,000 in impacts of adopting SFAS 157 plus $208,000,000 losses from asset sales/maturities and "other." Bet you there's a ton of action in the CDS market for HIG tomorrow. Not to mention the other three on the list.

Metlife Inc. and Prudential "lead the league" in derivative losses, according to that 03/31/08 list.

Interestingly, American Financial Group didn't look too bad on that list of U.S. life insurance operations, probably because their problems were elsewhere.

No positions, as I'm trading mechanically and on EOD data, but these guys might present opportunities for the nimble - although I don't know their status re: the "no short" list.
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

nodoodahs · Moderator Joined: 06 May 2005 Posts: 2408

Supposedly their CDS upfronts surged in price yesterday, but Reuters story on CreditSights' position re: life insurers recent CDS spikes is at once both encouraging and discouraging on the insurer.

No economic position. Not much respect for the company either. The life insurers that had much in VA (variable annuities) will be the ones that suffer the most from asset writedowns.
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

rffrydr · Posted: Fri Oct 03, 2008 8:02 am Post subject:

Here's the "news"--a Senator's slip of the tounge:

http://registration.ft.com/registration/barrier?location=http%3A%2F%2Fftalphaville.ft.com%2Fblog%2F2008%2F10%2F03%2F16635%2Fmystery-insurer-on-the-brink%2F
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Today is the Tomorrow you worried about Yesterday!

rffrydr · Posted: Thu Oct 02, 2008 9:35 pm Post subject:

Yeah, no doubt, (was) one of a few real retail level insurance brands. Funny about the Michaelangelo effect. But that's timeless: remember PG's "devil moon"? But it's no Coke, nor GE. And Buffett doesn't mess around at his age. He's legacy building now.

Question is, do you want that kind of "investment" as a shareholder? Worked with GS; not with GE. I don't want my money subordinated to any "brand."
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Today is the Tomorrow you worried about Yesterday!

nodoodahs · Moderator Joined: 06 May 2005 Posts: 2408

Mostly true enough.

What got me thinking about W.E.B. was the distribution model. HIG gets most of the business through affinity marketing and arrangements like that with the AARP, and I haven't looked specifically at GEICO's entire distribution setup, but I do believe they have little in the way of affinity arrangements, so at first blush it seemed complimentary.

The Hartford would argue they have a brand with power. I would argue they have name recognition, which is the majority of "brand" anyways.
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.

rffrydr · Posted: Thu Oct 02, 2008 8:13 pm Post subject:

I doubt it. His current "positions" have nothing to do with weakness. Rule 157 is half the losses and the CDS "adjustments" aren't life or death. I see the opportunity...but throw a stick and you'll hit another ten. He can get some of the assets from his own insurance companies, and no need to go over ground already covered. Can't "cheapen" the brand you know. May need to take his place on the Federal Buying Commission.
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Today is the Tomorrow you worried about Yesterday!

nodoodahs · Moderator Joined: 06 May 2005 Posts: 2408

Question: do you think W.E.B. will capitalize them with a big stake of preferreds and warrants? It IS a name brand and they arguably have a "moat" around their affinity and AARP businesses.
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I haven’t seen a beatin’ like that since somebody stuck a banana in my pants and turned a monkey loose.