The company reported a loss in the quarter of $2.6bn, mainly on $2.2bn on investment losses and $932m in deferred acquisition costs.

Hartford shares dropped as low as $9.05, an all-time low for the stock, and were down 48 per cent to $10.35 after lunchtime on the New York Stock Exchange.

On a conference call with analysts, which at times grew tense, Ramani Ayer, the company’s chairman and chief executive officer, said that the quarter had been the most challenging in the Hartford’s 198-year history.

One analyst quizzed Mr Ayer about his decision in June to accelerate a $500m share buyback.
Mr Ayer’s response on Thursday was blunt. “I honestly missed the degree to which markets have cratered in terms of equity markets, credit spreads widening, all of which happened in an accelerated way in September and October,” he said. “I did not see that.”

In a research note entitled “Poor quarter and even worse conference call”, John Nadel, an analyst at Stern Agee, said that a reversal in Hartford’s fortunes would be somewhat dependent on the conditions of Tarp, the government rescue plan which stands for ”troubled asset relief programme”.

“We see no other way to put this,” he said. “In our view, Hartford Life’s ability to maintain its ratings is almost entirely outside of management’s control at this point.”

Mr Nadel said this ability would depending instead on a hope that equity markets rally, credit markets improve and Tarp is made available by the US Treasury.

Meanwhile, the company has moved to strengthen its balance sheet in the past few weeks, negotiating a $2.5bn cash infusion from Allianz, the German insurer.

The company said it would cut an undisclosed number of jobs in the fourth quarter in an attempt to trim expenses by $250m by the end of 2009. “With revenues down across the company, particularly in the life businesses, we are taking a hard look at our expense base,” said Thomas Marra, president and chief operating officer.

The company said it now expected 2008 earnings to range from $4.30 and $4.50 per share, less than half its estimate in July of $9.20 to $9.50 per share.

Copyright The Financial Times Limited 2008

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