Safeco To Sell Life, Brokerage Units For $1.44 Billion

David Foy, White Mountains chief financial officer, says his firm thinks the Safeco Life acquisition looks like a “good economic deal.”

The fact that the White Mountains group has no existing life business of its own should minimize disruption for producers, customers and Safeco Lifes 1,500 employees, Safeco executives say.

“Were going to have the same people, the same products and the same service,” says Jim Pirak, Safeco Lifes vice president of marketing.

Safeco Life generated $196 million in operating income in 2003 on $868 million in premiums and other revenue by selling structured settlements, bank-owned life insurance, stop-loss insurance, annuities and asset-management services.

The units distribution network includes 5,000 insurance agencies, 100 financial institutions and 350 benefits administrators. Safeco Life would continue to sell through Safecos p-c agent network after the deal closes, but it would open up to non-Safeco p-c agents, executives say.

The Safeco Life units deal price is just 81% of the units $1.77 billion in adjusted book value. Sellers have had trouble getting good prices for life insurers in recent months, analysts say.

Susanne Sclafane is managing editor of NUs Property & Casualty edition.

Reproduced from National Underwriter Life & Health/Financial Services Edition, March 19, 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.