(Bloomberg) — Protective Life Corp. is already making good on a pledge to help its new owner, Japan’s Dai-Ichi Life Insurance Co., grow in the U.S.
On Wednesday, the Birmingham, Alabama-based insurer said it agreed to buy blocks of term-lifepolicies from Genworth Financial Inc. for about $661 million through a reinsurance transaction.
The deal is expected to be completed in the first quarter. Dai-Ichi bought Protective earlier this year for $5.5 billion as it looked overseas for growth. Japanese insurers have struggled to expand as a shrinking population at home erodes demand in the domestic market.
“The blocks we are acquiring from Genworth are exactly what we typically look for in an acquisition opportunity,” Protective Chief Executive Officer John D. Johns said in the statement. “We are seeing good acquisition opportunities in the market, and we are confident that our proven, industry-leading acquisition capabilities provide a solid platform for continued strong growth.”
Genworth, which has declined about 46 percent this year, had initially wanted to sell an entire life-insurance business. CEO Tom McInerney said in August that the Richmond, Virginia- based company would abandon that approach because it could hurt credit ratings, earnings and diversification.
Genworth said in a separate statement Wednesday that it will continue to service the blocks of policies, which represent about $108.7 billion of term life insurance in force backed by approximately $2.3 billion of statutory reserves as of June 30. While the Protective Life deal will bolster Genworth’s capital, the company said it expects to post a third-quarter loss on the sale of $275 million to $325 million.