A Midwestern insurer is buying a group benefits business.
Fort Dearborn Life Insurance Company, a unit of Health Care Service Corp., Chicago, has agreed to acquire the group life and group disability business of Highmark Life Insurance Company, a unit of Highmark Inc., Pittsburgh.
Fort Dearborn Life is not saying how much it is paying for Highmark Life, which generates about $125 million in premium revenue per year, but the companies say they hope to complete the deal in the next few months.
Fort Dearborn Life is making the deal to expand its group insurance business, and Highmark Life is selling to get capital to invest in its medical stop-loss operations and in benefits product development efforts, company executives say.
Both Fort Dearborn Life and Highmark Life have strong ties to the world of Blue Cross and Blue Shield health carriers.
Health Care Service is the parent of Blue Cross and Blue Shield of Illinois, and Highmark is the parent of a large Pennsylvania Blue Cross and Blue Shield carrier.
The deal includes an agreement that would call for Highmark Life national sales offices to sell Fort Dearborn Life products and for Fort Dearborn Life to refer stop-loss clients to Highmark Life.