The Hartford To Sell London & Edinburgh To Norwich Union

The Hartford says it has reached an agreement to sell its United Kingdom-based London & Edinburgh Insurance Co. subsidiary to Norwich Union, a top UK insurer. The Hartford will receive approximately US $525 million for London & Edinburgh's ongoing operations. The Hartford will retain ownership of Excess Insurance Co. Ltd., London & Edinburgh's property casualty insurance and reinsurance subsidiary, which is in run-off. The transaction should be completed in the fourth quarter, subject to regulatory approval.

London & Edinburgh is the UK's sixth largest general insurance company, ranked by net written premium. It specializes in homeowners, auto, creditor and commercial insurance, and also has a small credit life insurance operation. Revenue in 1997 was US $1.2 billion.

Ramani Ayer, The Hartford's chairman and CEO, said the sale of London & Edinburgh to Norwich Union is a "win" for all three companies. "We will have additional capital to deploy in areas where we have strategic advantage; Norwich Union adds a solid company to its portfolio; and, as a subsidiary of Norwich Union, London & Edinburgh will have the advantage of Norwich Union's strong market position."

The Hartford remains an international competitor, with insurance, financial services and reinsurance operations in the UK, Canada, Europe, Latin America and Asia, said Ayer. "We will continue to allocate capital to markets which have the most potential for growth."

Richard Harvey, Norwich Union's group chief executive, said, "London & Edinburgh represents a rare opportunity to acquire a sizable UK general insurer that will, when merged with our existing general insurance business, bring critical mass in the product areas of creditor and commercial insurance, complementing our existing strong position in the household and motor markets."