Ayer stepping down from The Hartford

The Hartford Financial Services Group CEO and chairman Ramani Ayer, who recently took criticism from an angry investor at a shareholders meeting, will retire from the company by the end of this year, company officials announced this morning.

Ayer, 62, recently informed the Board of Directors of his plans to retire as chairman and chief executive officer by the end of 2009 and the Board will begin an immediate, external search for Ayer's replacement.

"We have recently made a series of important decisions about The Hartford's path forward, setting the company on a new strategic course to build value for our shareholders," Ayer said in a recent statement. "We will continue to leverage the venerable Hartford brand, moving ahead with our strong property and casualty and life franchises. With this clarity in place, it is the right time for me to make my plans for retirement and for the Board to begin the search for my successor. In the meantime, I am fully committed to leading this organization during this period and to ensuring a smooth leadership transition as the company enters its third century. For nearly 36 years, I have been honored to call The Hartford my home and I am proud of the culture of integrity, trust and customer service that is woven into the fabric of this outstanding organization."

Ayer has served as chairman and chief executive officer of The Hartford since February 1997 and spent his entire career serving the company. He joined the company after graduating from Drexel University in 1973 and within six years was named staff assistant to the chief executive officer. He served in a variety of senior executive level positions within the property and casualty organization before being named president and chief operating officer of The Hartford's property and casualty operations in 1991.

The Hartford has experienced tremendous strain over the last year due to heavy investment losses and an ailing variable annuity business.

Ayer will be sixth high-ranking executive to leave the company in the last two years. Thomas Marra, The Hartford's president and chief operating officer, announced his retirement in February, effective July 3.

The property and casualty and life insurer posted a $1.2 billion loss for the first quarter of 2009, and a $2.7 billion loss for all of 2008.

As a result of those huge losses, the future of The Hartford has been in limbo over the past year, with rumors abound about a possible sale of different parts of its businesses. The company was also forced to ask the government for a helping hand and has received preliminary approval for $3.4 billion in bailout funds.

Late last year the 199-year-old insurer accepted a $2.5 billion investment from German insurer Allianz.

Life insurance companies have come under deep criticism for putting too much risk into their variable annuity products, which allows investors to put money into a mutual fund-like portfolio with the expectation of receiving annual payments for life.

In order to compete for market share in recent years, however, life insurers added aggressively priced minimum-return guarantees on those products, which promise a minimum repayment to the investor no matter how the stock market performs.

The Hartford became a top underwriter of those products and reaped major profits when the market performed well. With the market's recent nosedive however, many equity portfolios held by annuity customers underperformed the guarantees, draining capital from life insurance companies.

Hartford Life reported a net loss of $1.4 billion in the first quarter of 2009, and a net loss of $2.4 billion in 2008.

A longtime shareholder of The Hartford Financial Services Group expressed deep frustration at the company's annual shareholder meeting last week, asking Ayer if he would step down from his leadership position as a result of the company's poor financial performance over the last year.

"You've destroyed the image, the reputation and the name of The Hartford," said Justin Winthrop, who said he has been a shareholder with the company since the 1940s. "When can we expect your resignation?"