Protective Life Corp. says its Protective Life Insurance Company unit has agreed to acquire United Investors Life Insurance Company from Liberty National Life Insurance Company for about $316 million.
Protective Life, Birmingham, Ala. (NYSE:PL), expects to invest about $260 million in the company, excluding excess capital of about $56 million to be held by United Investors Life at closing. The price includes statutory capital and surplus of about $130 million. Protective Life and Liberty National hope to close on the deal by Dec. 31.
Liberty National is a subsidiary of Torchmark Corp., McKinney, Texas ((NYSE: TMK).
Andrew Kligerman, an analyst with UBS Investment Research, New York, says the agreement carries “minimal integration risk,” noting that Protective Life has a successful record of acquiring closed blocks of business.
Standard & Poor’s, New York, says its AA minus rating on Protective Life Insurance Company and its A minus credit rating on Protective Life Corp. will remain unchanged.
After the deal closes, Protective Life would remain well capitalized, and the company “produces consistently strong adjusted earnings performance,” S&P says.
S&P says Protective Life may find itself challenged to keep earnings at past levels “due to the commodity nature of many of their life insurance and annuity products and the impact of spread compression on their profit margins.”