US-based speciality insurer Assurant has divested its prearranged funeral insurance and final expense business, Global Preneed, to CUNA Mutual Group for $1.35bn in cash.
With the acquisition of Global Preneed, which caters to over two million consumers, CUNA Mutual aims to better serve the growing middle-market.
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Global Preneed will have limited integration into CUNA Mutual Group’s other business lines and continue its operations independently, with its employees remaining at their current locations.
The net proceeds from the sale will amount to approximately $1.2bn and Assurant plans to return approximately $900m of it to shareholders through share repurchases within one year of closing.
This is in addition to returning $470m in 2021 through share repurchases and common stock dividends under Assurant’s existing three-year, $1.35bn capital return plan, which is expected to be completed by the end of the year.
Assurant will use the remainder of proceeds to strengthen its position by investing in its connected world businesses comprised of Connected Living, Global Automotive and Multifamily Housing.
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By GlobalDataAssurant CEO Alan Colberg said: “This sale marks an important milestone in the transformation of Assurant, sharpening our focus on our market-leading lifestyle and housing businesses, and better positioning our company to capitalize on future growth opportunities emerging around the connected consumer.
“I want to thank all Global Preneed employees for their dedication to serving their two million policyholders and for building a business that will be a great strategic fit as a part of CUNA Mutual Group.”
At the time of the announcement of the deal in March 2021, both the firms also agreed on a multi-year extension of the 23-year automobile mechanical repair coverage partnership.
