Posted on Apr 30, 2010 by Sergio Ulloa
Industrial Alliance Insurance and Financial Services (IAG), a Quebec-based insurance and financial services company has reached an agreement on purchasing all outstanding shares in American-Amicable Holding Inc., owner of U.S. life insurer American-Amicable Life Insurance Company of Texas for C$ 145 million (US$ 144 million).
Industrial Alliance is carrying out the acquisition through their wholly-owned subsidiary in the United States, IA American Life Insurance Company, in an effort to make greater inroads to the U.S. middle-income life insurance market. IAG, which is Canada's 4th
largest life insurer, had an equity issuance in February 2010 which earned them C$ 200 million, about half of which will be used to pay for the purchase of American-Amicable alongside C$45 million in excess capital.
The deal has been well received by analysts and the stock market at large, with IAG shares rising 0.9 % to C$35.37 on the Toronto Stock Market where it is listed. The acquisition of American-Amicable opens new life insurance markets for IAG, as American-Amicable is licensed to sell life insurance products in 49 states and territories, including major American markets such as California, Illinois, Texas, Alabama, North Carolina and Puerto Rico. American-Amicable has about C$ 7.1 billion worth of life insurance policies in force with a compound annual growth rate of approximately 13% over the last five years; Industrial Alliance says that the acquisition could add C$ 0.09 to annual earnings per share.
American-Amicable Holding Inc.
American-Amicable Holding Inc. is the holding company of American-Amicable Life Insurance Company of Texas which sells middle-income life insurance policies in the United States. The company was founded in 1910 as the American Life Insurance Company in Waco, Texas. Since then it has grown to sell insurance in 49 states and territories and has a client base of over 211,500.
Industrial Alliance Insurance and Financial Services
Industrial Alliance was established in 1892 and sells a broad range of life and health insurance products, as well as various other financial plans and general insurance policies. IAG is Canada's fourth largest life and health insurance company, with more than C$ 58.4 billion of assets under their management. They have more than 3,400 employees servicing over 3 million Canadians through a network of 16,000 plus agents.