Standard Insurance Company, Portland, Ore., has agreed to buy the group disability and group life insurance business of Teachers Insurance and Annuity Association, New York for $75 million.
Standard is the primary insurance subsidiary of StanCorp Financial Group Inc., Portland, Ore. StanCorp anticipates the transaction will add $0.15 to $0.20 per share to earnings in 2003.
The purchase will be made through a reinsurance transaction so that Standard will not have to re-write all the policies, says Standard spokeswoman Tiana Tozer.
Standard was invited by Teachers Insurance and Annuity Association-College Retirement Equities Fund to be part of a limited auction process, she says.
The company cited its reason for the acquisition. Rather than being “all things to all people, we have areas of concentration,” Tozer says. “Weve chosen to grow our business in niche markets where we have expertise, including group disability and group life.”
Bertram L. Scott, executive vice president, TIAA, says “we entered the group insurance business in the early 1950s in order to meet customer needs not filled by any other company.”
Of the decision, Scott says, “we believe we are doing what is best for both the company and our customers.”
The business being acquired includes about 1,800 group insurance contracts representing 650,000 insureds and last year generated about $180 million in premiums, according to StanCorp.
Reproduced from National Underwriter Life & Health/Financial Services Edition, June 3, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.