Mergers and Acquisitions

  • My question revolves around the notion that it seems as if we talk about the life insurance company as acquiring other services which it will offer in some basket of services.
    • But when we talk about the financial services industry and the life insurance  business, the reality is that the other financial services industries are miles ahead of us in their flexibility of systems, their sales compensation and a host of other things, and they are really acquiring us. 

--   J. Ross Hanson

1982 - SOA - The Financial Services Industry And Its Responses To Inflation And Deregulation, Society of Actuaries - 36p 

  • I will start by discussing the expansion and consolidation of the U.S. life insurance industry.
    • Table 1 shows the development, in five-year intervals, of the number of companies in the U.S. since the end of World War II.
    • At the end of World War II, we had 473 life insurance companies in the U.S. (a relatively modest number) of which only one-third were mutual companies, or roughly 160.
    • There was rapid expansion and the number of companies quintupled from 470 in 1945 to 2,300 in 1988 before we began a severe consolidation.
  • Why were so many new companies added in this postwar period?
    • First of all, banks, finance companies and auto dealers formed life insurance companies that were basically credit life and health insurers.
    • A number of reinsurance companies were formed in Arizona, and a number of limited surplus companies were formed in Texas.
    • Both these states have small surplus requirements, which enabled companies to get into the business with very modest capital contribution.

--  Frederick S. Townsend, Jr.

1995 - SOA - International Consolidation of the Life Insurance Industry, Society of Actuaries - 20p

 

  • 1982-2, NAIC Proceedings - Re: Revised Memorandum on Issues and Problems Surrounding the NAIC Model, Insurance Holding Company Act - ATTACHMENT FIVE-A
    • To: Members of NAIC, Securities and Insurance, Regulation (EX) Task Force, From: Scott Shaffer, Date: March 26, 1982
    • Summary
      • In the decade of the 1960's, insurance companies reacted to economic factors such as inflation and the corresponding shift in the allocation of peoples' savings dollars from life insurance to equity based investments by diversifying through the formation of upstream, parent holding companies.
      • This memorandum pinpoints problem areas of the Model Act which have arisen as a result of recent court decisions declaring similar provisions of state corporate takeover and state insurance holding company acts to be unconstitutional.
  • 1979 - SOA - Actuarial Appraisal Valuations of Life Insurance Companies, by Samuel H. Turner, Society of Actuaries - 30p
  • 1982 - SOA - Diversification of Life Insurance Companies, Society of Actuaries - 20p
  • 1995 - SOA - International Consolidation of the Life Insurance Industry, Society of Actuaries - 20p
  • 1999 - SOA - Industry Convergence—Bank Participation, Society of Actuaries - 18p
  • EF Hutton
  • Farmers Insurance / BATUS (British American Tobacco US)
    • British parent, BAT Industries PLC
  • First Capital - 1991/NOLGHA
  • Life of California
  • Tenneco to Conseco
  • 1977 - LR - The Impact of Increased State Regulation of Insurance Mergers and Acquisitions on on Federal Antimerger Regulation, by Ronald A. Jacks - 14p
  • - LR - Insurance Mergers and the Clayton Act, 
  • 1980 - LR - The Federal Trade Commission and Insurance Mergers, by Stephanie Kanwit,  Insurance Law Journal - 

  • 2003 - SOA - Merger of the Actuarial Education and Research Fund and The Actuarial Foundation - [link]

    • Within the next few weeks, the Actuarial Education and Research Fund (AERF) and The Actuarial Foundation will be merging. The named of the merged organizations will be The Actuarial Foundation (TAF).

  • Woodall Group and ACLI
  • More than 150 life insurers now own brokerage or investment firms, according to the National Association of Securities Dealers.
  • ''The franchise value of a major securities firm is something that is clearly established,'' said George L. Ball, chairman of Prudential-Bache Securities. ''Insurance is a steady parent for the more volatile investment arm, making a very nice link.''

1986 1227 - NYT - Why Insurers Covet Brokers, New York Times - [link]

  • The big transaction in this year to date was my parent company's sale of Travelers Life and Annuity to MetLife for $11.5 billion.

--  Steve Fromm with Citigroup Investment Banking

2005 - SOA - Where Did All the Mergers and Acquisitions Go?, Society of Actuaries - 21p