The Hartford Financial Group announced on Tuesday that it will sell its third party claims administrators to Sedgwick Claims Management Services for $278 million in cash in order to focus on its core protection and wealth management businesses.
Specialty Risk Services, a wholly-owned subsidiary of The Hartford, provides self-insured, insured, and alternative market clients with customized claims services. The sale of SRS to Sedgwick CMS is expected to close during the first quarter of 2011, subject to regulatory approval and other required consents. The Hartford expects to realize a capital gain of approximately $150 million, after-tax, upon closing of the transaction. Sedgwick CMS plans to extend comparable employment offers to all direct SRS employees, as of closing.
Credit Suisse served as the financial advisor to The Hartford.
“The sale of SRS is consistent with our strategy to focus The Hartford on core protection and wealth management businesses,” said Liam E. McGee, The Hartford's chairman, president and chief executive officer, in a statement. “This transaction accomplishes the goal of creating shareholder value without impacting the earnings power of the company.”