Canadian insurer and wealth manager iA Financial Group has announced the purchase of two insurance blocks from Prosperity Life Group in the US.
Financial terms of the transaction were not disclosed.
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The blocks consist of final expense and term life products, which are part of the offerings from S.USA Life Insurance Company, a Prosperity company.
They include more than 115,000 policies and over $100m in annual premiums.
S.USA, an Arizona-based life insurance company, is licensed to operate in 47 states and the district of Columbia.
The acquisition not only adds to iA Financial’s portfolio but also extends an invitation to Prosperity’s distribution network to sell iA Financial’s products.
This network comprises around 15,000 sales agents contracted through independent marketing organisations (IMOs).
Currently, around two-thirds of these agents and IMOs have existing agreements with American-Amicable Life Insurance Company, a subsidiary of iA Financial, to distribute iA’s products.
The remaining agents will be encouraged to enter similar arrangements.
iA Financial expects this acquisition will be accretive from the first year, enhancing earnings on both a core and reported basis.
However, the company’s solvency ratio is expected to see a decrease of around one percentage point.
iA Financial executive vice-president and chief growth officer of US operations Sean O’Brien said: “This transaction will further increase iA’s strong growth momentum and expand again its presence in the United States. We look forward to welcoming new IMOs and agents and helping them continue to serve their customers well.”
The transaction, which is subject to standard closing conditions, comes on the heels of iA Financial’s acquisition of Vericity.
This $170m deal saw iA Financial’s unit, iA, take over Vericity, a US-based direct-to-consumer life insurance provider.
With a workforce exceeding 400, Vericity aims to offer ‘affordable’ life insurance solutions to the middle market, emphasising digital sales, rapid policy issuance and non-medically underwritten products.
