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The Hartford Financial Services Group says it faces losses of as much as two billion dollars in the third quarter.  But the insurer has struck a deal for a cash injection from a German company.

Shares in the Hartford lost more than 50% of their value last week as the extent of the company’s exposure to the Wall Street chaos became clear.  The Hartford was heavily invested in companies like Washington Mutual, Lehman Brothers and AIG.  The company announced Monday it will sell stock valued at two and a half billion dollars to German Insurer Allianz.  Dr Walter Dolde, a finance professor at UConn’s School of Business says.

“I don’t think The Hartford has the problems that the stand-alone investment banks had, or that some of these big mortgage servicing banks like WaMu or Wachovia had.  It’s two things, one it’s prudent, but secondly, we have a real crisis of confidence right now.  The bond investors are on strike - no-one is willing to lend any money to anybody.  If The Hartford hadn’t done something, the situation would have gotten worse before it got better.”

Investors reacted positively to news of the cash injection, boosting Hartford shares.  The insurer ended the day up almost 13%, despite the massive selloff on Wall Street.