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August 29, 2013 at 09:20 AM
Fidelity & Guaranty Life, a leading provider of fixed indexed annuities (FIAs), is going public. Yesterday, its parent company, Harbinger Group Inc. (HGI), filed a prospectus for a $100 million IPO.
Neither the share price nor the amount of stock to be sold were revealed in the SEC filing. Proceeds will be used to pay an unspecified dividend to HGI and for general corporate purposes. Credit Suisse was listed as the sole underwriter. Harbinger is not a selling shareholder in the offering. There was no indication as to which stock exchange the shares would be traded.
In 2011, HGI, which lists itself as a publicly traded diversified holding company, acquired Fidelity & Guaranty Life (FGL) for $350 million. A spokesperson for FGL declined to comment further on the IPO filing.
FGL reported operating income in its insurance segment of $78.5 million in the third quarter versus an operating loss of $1.5 billion a year earlier. In Q3, FGL’s annuity sales reached $270.8 million, down from $468 million in the same quarter a year prior.
According to the SEC filing, FIAs generated approximately 95 percent of FGL’s total sales in fiscal year 2012. As of June 31, the Baltimore-based company had roughly 700,000 policyholders. Its annuities are marketed through a network of 200 IMOs that represent some 19,000 independent agents.
Though parent company Harbinger is public, the pending IPO is interesting in light of several recent acquisitions by private equity firms of fixed annuity lines.
