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On Friday, Hartford Financial Services Group Inc. ( HIG - Analyst Report ) signed a multi-year consultancy and outsourcing agreement with Accenture Plc. ( ACN - Snapshot Report ) . The financial terms of the deal were not disclosed.
Accenture will provide management and technology consultancy services, such as identification of appropriate investments in technology along with finance and accounting business process outsourcing services in Hartford’s finance department.
The aim of the collaboration is to transform the finance department of Hartford through improved product consistency, cost reduction and faster decision making process. Accenture is well-versed in improving the efficiency of the financial and risk management functions of financial companies.
The company’s Accenture Finance and Risk Services, which is a part of the Financial Services operating segment, has substantial experience in the modification of the financial management process. Moreover, Hartford and Accenture have been collaborating professionally since 1995 on systems integration and consulting, apart from other business and technology projects.
Hartford has been employing various cost saving initiatives over the past year. In the recently announced guidance for 2012, the company revealed that it is looking to increase efficiency and reduce costs, thereby generating savings of $300 million in 2012. Moreover, Hartford has also been divesting its non-core businesses to focus its resources on the core businesses of life insurance, property-casualty and retirement products.
Last week, Hartford announced an agreement to sell its subsidiary, Hartford Life Private Placement (HLPP) to Philadelphia Financial Group Inc., while in October 2011, the company sold its unit Trumbull Services LLC to ExlService Holdings, Inc. ( EXLS - Snapshot Report ) . Earlier, in May 2011, the company announced an agreement to sell its subsidiary, Federal Trust Corporation to CenterState Banks, Inc. ( CSFL - Snapshot Report ) .
Moreover, Hartford announced Wellington Management Co. LLP the sole sub-adviser for its mutual funds business last week, in order to boost its wealth management business, which offers high growth and high return on equity. However, despite these efforts the company expects earnings of $3.30–3.60 per share in 2012 and $3.27–3.32 per share in 2011.
Currently, Hartford carries a Zacks #5 Rank (short-term Strong Sell rating), which indicates a downward pressure on the shares over the near term.
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