GREENSBORO, N.C. - Jefferson Pilot Corporation today announced that it has agreed to acquire the U.S. group life, disability and dental business of The Canada Life Assurance Company, an indirect subsidiary of Great-West Lifeco Inc. The reinsurance transaction is expected to close during the first quarter of 2004, following regulatory approvals. Jefferson Pilot will be making a commitment of approximately $200 million to the business, and the transaction is expected to provide Jefferson Pilot modest earnings accretion over the next 12 months after financing and transition costs, and to be more accretive in following years.
The Atlanta-based business will become part of Jefferson Pilot's Benefit Partners group insurance operation, which is based in Omaha, Neb. As a result of the transaction, on a pro forma basis the combined operations would rank seventh in new sales of group life insurance, sixth in long-term disability insurance sales and fifth in short-term disability insurance sales, based on third quarter 2003 LIMRA rankings. Following the acquisition, Jefferson Pilot will be positioned with approximately $1 billion of group life, disability and dental insurance premium, one-third of which is from the acquisition.
Jefferson Pilot Financial President Dennis R. Glass said, "This acquisition achieves our near-term objectives of increasing distribution breadth and manufacturing scale to continue generating strong and profitable organic growth in the group insurance business."
William T. McCallum, co-President and Chief Executive Officer of Great- West Lifeco and President and Chief Executive Officer of Denver, Colo.-based Great-West Life & Annuity Insurance Company, said, "We are pleased that Canada Life's U.S. group customers will be moving to Jefferson Pilot, a company with strong financial ratings and a commitment to the group life, disability and dental market. This sale will allow Great-West Life & Annuity to continue to focus on its core healthcare and retirement services businesses, and to redirect freed up capital back into these businesses."
Robert D. Bates, President of Jefferson Pilot Benefit Partners, will lead the integration of Canada Life's U.S. Group Insurance Division with Jefferson Pilot Benefit Partners.
"Both Canada Life and Jefferson Pilot Benefit Partners are committed to working together to assure a smooth and efficient transition to Jefferson Pilot for Canada Life's current group customers, distribution systems and home office employees," Bates said. "Canada Life's business strategy and market position is very consistent with Jefferson Pilot's rapidly growing employee benefits business, and its distribution network will blend nicely with Jefferson Pilot Benefit Partners and will accelerate our planned expansion. This combination will enable us to further leverage our unique business model and technology platform which provides online, real-time services to our customers, and will further enhance the fixed expense advantage we have in this business."
Source: Jefferson Pilot Corp.
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