The Hartford's President, Thomas Marra, Will Retire
February 26, 2009
Thomas M. Marra, president and chief operating officer of The Hartford and widely seen as an heir apparent to the CEO, will retire July 3 — the fifth high-ranking executive to leave the company in less than two years.
Marra, 50, has also resigned from the company's board of directors, effective immediately, The Hartford Financial Services Group said Wednesday.
His departure from The Hartford after 29 years comes as it struggles with investment losses and trouble in its variable annuity business, which is part of the life operations he had overseen for many years.
The company called Marra's early retirement a "mutually agreed separation" but wouldn't elaborate and said there are no plans to name a new president.
Marra didn't return a phone call but told employees in a letter Wednesday, "From a business perspective, I think the timing is right. At both the life and property and casualty companies, the management teams have been enhanced over the past few years, and the new reporting structure ... will allow for a more streamlined and decisive management structure."
The heads of the life and property-casualty businesses, who reported to Marra, will now report directly to Ramani Ayer, chairman and chief executive, effective immediately.
Marra's exit didn't surprise everyone. Jeffrey Schuman, an analyst at Keefe, Bruyette & Woods, said he considered it possible because of how market turmoil is affecting the life and annuity business.
"Those market conditions have put tremendous pressure on The Hartford's variable annuity business and, as a result, have put a lot of pressure on The Hartford," Schuman said. "It's not surprising that perhaps Ramani Ayer and the board would want to make some changes."
Schuman noted that Marra and the previous head of life operations, Lon A. Smith, built the annuity business.
Volatile securities markets have slowed sales of variable annuities and mean The Hartford and other insurers that made various guarantees on annuities they sold will have to pay out more than expected.
"It's unfortunate The Hartford has to part with someone who has built a pretty good franchise in many ways," Schuman said.
Ayer credited Marra with producing growth in the life operations, which helped diversify The Hartford and achieve "key leadership roles in significant markets."
The Hartford, stressed by devalued investments, replaced its chief investment officer in October and announced a $2.5 billion capital infusion from German insurer Allianz, which got the right to acquire about a 24 percent stake in the company.
Marra's exit and the departure of three other "lieutenants" to Ayer raise questions of management succession and "certainly leaves the bench thinner at those top levels," Schuman said.
The company is looking for a replacement for Neal Wolin, the head of property-casualty operations, who left recently for a White House job advising President Barack Obama. The Hartford also lost Chief Financial Officer David M. Johnson last year and David Zwiener, head of property-casualty, in September 2007.
Reprinted with permission of the Hartford Courant.
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