The Hartford To Examine Its Asbestos Exposure
NU Online News Service, Jan. 28, 2:16 p.m. EST? A day after reporting robust fourth-quarter earnings, The Hartford Financial Services Group Inc. announced it will conduct a comprehensive study of its asbestos exposure.
The Hartford reported a fourth-quarter 2002 net income of $258 million, or $1.01 per diluted share, compared with $144 million, or 58 cents per diluted share, for the same period in 2001.
In today's announcement, The Hartford said findings from its asbestos study should be completed and released in the second or third quarter of this year.
The Hartford's announcement drew an immediate reaction from several rating agencies. Fitch Ratings in New York said it has placed fixed income ratings for The Hartford, as well as its insurer financial strength ratings for the Hartford Fire Intercompany Pool, on its Rating Watch Negative status.
Fitch stated that it anticipates responding to its Rating Watch status when The Hartford releases its study, or possibly sooner if some uncertainties are resolved earlier.
The rating agency predicted that The Hartford is likely to take a reserve charge at the completion of the study. But Fitch noted in its statement that it will consider The Hartford's strong and consistent operating performance.
Standard & Poor's Ratings Services in New York commented that the action taken by the Hartford, Conn.-based insurer would place extra pressure on other carriers to assess their asbestos exposure.
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