Pan-American Life acquires Encova’s life insurance affiliate

New Orleans-based Pan-American Life Insurance Group, which was recently named one of the best-run companies by Deloitte Private and the Wall Street Journal, said it has acquired the life insurance arm of Encova Mutual Insurance Group of Columbus, Ohio.

“PALIC and Encova Life have been in discussions for several months,” said Jose Suque, Chairman and CEO of Pan American Life Insurance Group. “Encova was looking to refocus on its P&C business and we knew the addition of the Encova Life business would complement and strengthen the Mutual Trust Solutions (MTLS) division of PALIC.”

“The acquisition will add approximately $60 million in revenue, $600 million in total assets, $38 million in premiums and $82,000 life covers to PALIC’s life insurance business in the United States, further strengthening PALIC’s scale,” Socke said. American, Access and Investment Portfolio,” adding: “At closing, Pan-American Life Insurance Group (PALIG), the parent company of PALIC, will have more than $1.8 billion in proceeds, assets of $6.9 billion and approximately $1.55 billion in life insurance premiums.

Pan-American has been a provider of life, casualty, and health insurance for 110 years, operating in 49 states, the District of Columbia, Puerto Rico, the US Virgin Islands, and throughout Latin America and the Caribbean. It employs more than 2,100 people and covers more than 7 million policyholders.

Company executives said the purchase of Encova was consistent with its business strategy.

Acquisition compatible with “USA”. growth strategy


“This acquisition is in line with our US growth strategy and demonstrates our commitment to the US market and our business for life,” said Jose Suque, Chairman and CEO of Pan-American.

The deal was approved unanimously by the boards of directors of both companies last week and is expected to close by the end of the year.

“We’ve had strong success in our property and loss operations as evidenced by the recent upgrade of AM Best, and we want to focus exclusively on building on recent P&C success.” Encova Insurance President and CEO TJ Obrokta Jr. said: “We remain committed to our agency partners, and will help ensure that this transition to Pan-American Life is a smooth process for our life agents and policyholders.”

Although all Encova Life policies will be assumed by Pan-American, the company said existing policyholders should not notice any changes to the product’s terms or features.

Encova is a super-regional carrier ranked in the Top 20 Mutual Insurance Companies in the US, employing more than 1,100 associates writing in 28 states and Washington, D.C., gross premiums of more than $1 billion, surplus of more than $1.96 billion and assets of more than 4.8 billion. dollar. The group markets insurance solutions through more than 2,000 independent agencies in the Midwest, Northeast, and South.

The acquisition can lead to the direction of the industry


Some analysts say the acquisition/merger could spark an industry trend. After a record-breaking 2021, transaction volumes collapsed, down 27% in 2022 from a year earlier, and values down 69%, according to a Deloitte analysis.

Continued economic uncertainty, accelerating inflation, and rising costs of capital have put many insurance company merger plans on the back burner. But as the Federal Reserve reverses its aggressive rate hikes, the pendulum may swing, Deloitte said.

“When prices stabilize, we expect to see companies begin deploying capital for acquisitions,” Deloitte’s latest report said. “M&A activity will occur, but at a reduced pace and at lower rates compared to higher valuations in 2021.”

The report said it expects insurance brokerage to be the first sector to recover, given its large deal volume and attractiveness to private equity investors.

“The fact that private equity interest fell slightly last year suggests that financial buyers view the brokerage positively despite higher interest rates and believe that long-term growth will offset any increase in transaction cost,” Deloitte said. “Meanwhile, brokerages appear to be affected by the softness of insurance mergers and acquisitions in general.”

However, Deloitte expects the insurance M&A market to fully recover this year or early next year.

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