Hartford to Sell Japanese Insurance Unit

TOKYO-- Hartford Financial Services Group said that the financial conglomerate Orix Corp. has agreed to buy its Japanese unit, Hartford Life Insurance K.K., in a deal worth around $895 million.

Orix said it plans to merge the Hartford unit with its Orix Life Insurance.

Started in 2000, Hartford's Japanese unit found growth in offering guaranteed-principal variable annuities. It stopped selling them in 2009 as the market turmoil resulting from the global financial crisis drove up the cost of maintaining the guarantees.

While earnings have since recovered, the U.S. group has decided to pull out of Japan, which it sees as a noncore market.

Other foreign insurers are rethinking their presence in Japan. Prudential PLC decided last year to sell a Japanese life-insurance subsidiary to SBI Holdings Inc. The German insurer Allianz SE stopped selling new policies here in 2012.

By selling its entire stake in its Japan unit, Hartford Group will permanently eliminate risk related to variable annuities in Japan, the U.S. insurer said.

Orix is a financial-services provider with interests in investment banking, venture capital, life insurance, and real-estate development.

Write to Atsuko Fukase at [e-mail]

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