Fortis Spinoff Raises More Than $2 Billion

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Fortis, Brussels, says it raised more than $2 billion earlier this month by selling control over its U.S. financial services units.

The financial services company put 65% of its stake in Fortis Benefits, Fortis Health and other U.S. units on the block through an initial public offering. Fortis Fortis Insurance N.V. subsidiary brought in $1.8 billion by selling 80 million shares to the public, and it brought in more than $200 million more by selling 12 million shares to the underwriters.

A unit of Morgan Stanley Dean Witter & Company Inc., New York, was the managing underwriter.

The units spun off through the IPO now operate as Assurant Inc., a company with headquarters in New York and an official domicile in Delaware. The companys shares trade on the New York Stock Exchange under the symbol AIZ.

The prospectus for the offering shows that the health insurance and employee benefits businesses accounted for $3.4 billion of Assurants 2002 revenue and $232 million of its $517 million in pretax income.

Assurant also has businesses that sell property-casualty insurance, credit insurance, debt protection administration, funeral insurance and other products.

The prospectus suggests that Assurants individual health insurance might be particularly well positioned to benefit from the recent enactment of the federal health savings account law, which makes accounts that resemble the old Archer Medical Savings Accounts available to any taxpayer who buys a high-deductible health insurance policy: 16% of the individual medical policies that the company sold in the first 3 quarters of 2003 included an MSA.


Reproduced from National Underwriter Life & Health/Financial Services Edition, February 13, 2004. Copyright 2004 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.