Moody's Investors Service has placed on review for possible downgrade the "A2″ senior unsecured debt rating of The Hartford Financial Services Group Inc.
The rating action follows The Hartford's announcement of $2.2 billion in expected third-quarter net realized investment losses, as well as a $915 million write-down of deferred acquisition costs and The Hartford's $2.5 billion capital infusion from Allianz SE.
Moody's said it has affirmed the "Aa3″ insurance financial strength (IFS) ratings for The Hartford's lead property-casualty and life insurance operating companies.
The outlook for the life insurance operating subsidiaries remains negative, while the outlook for the p-c insurance operating companies remains stable, Moody's said.
A.M. Best Co. and Standard & Poor's Rating Services also revised their outlooks, as reported yesterday by NU Online. Standard & Poor's revised its outlook on The Hartford to negative from stable but has affirmed the company's "A" counterparty credit rating and the "AA-minus" counterparty credit and financial strength ratings on all of The Hartford's core insurance operating subsidiaries.
Best Co. placed The Hartford's "A-plus" financial strength (FSR) ratings under review with negative implications, and also placed under review with negative implications the "a" issuer credit ratings (ICR) and all debt ratings of The Hartford, and the "aa-minus" ICR of the company's key life and health and property-casualty subsidiaries.
Moody's said it "views the proposed $2.5 billion capital raise favorably given its substantial equity content."
The rating firm also said that the capital raise will "increase the amount of ongoing funding needed by the holding company to meet increased fixed charges over time, which will add incremental pressure to coverage ratios during a time when the life companies' business and financial profile are experiencing challenges."
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