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October 12, 2016 at 03:00 AM
Coveting new markets and distribution channels, mergers among life insurers are continuing apace.
The latest manifestation of the deal-making is an agreement, announced on October 10, by The Penn Mutual Life Insurance Co. to acquire Vantis Life Insurance Co. Once finalized, Vantis Life will become a wholly-owned affiliate of Penn Mutual, a Horsham, Pa.-based mutual life insurer since 1847.
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Awaiting regulatory approval, the merger will expand Penn Mutual’s footprint by adding to its 6,000-strong advisor network Vantis Life’s direct-to-consumer and bank channels. Vantis Life distributes life insurance and annuities through more than 150 banks and credit unions, including large super-regional and regional banks. The carrier markets its products in 45 states with more than 10,000 branch locations.
While Vantis Life will become a wholly owned affiliate of Penn Mutual, both companies will continue to operate under their current brands and maintain their respective management teams and workforces. Financial terms of the merger were not disclosed.
According to a Penn Mutual spokesperson, Penn Mutual and Vantis Life had as of June 30 surpluses of about $1.9 billion and $82.3 million, respectively. Penn Mutual has $1 billion of life insurance in force.
“The merger will enable Penn Mutual to leverage Vantis Life’s highly skilled team and great track record serving the middle market,” says Penn Mutual Chairman and Chief Executive Officer Eileen McDonnell. “This represents an opportunity to expand our market reach and insure more American families and households.”
The transaction is an outgrowth of a strategy launched by Penn Mutual in 2010, dubbed “Decade of Opportunity,” to boost product sales through both acquisitions and organic growth. In respect to the former, Penn Mutual acquired last year Texas-based annuity provider Longevity Insurance Co, which operates in 45 states.
Since 1982, Penn Mutual has also owned Janney Montgomery Scott, a brokerage firm. Pointing to Janney’s success — the brokerage firm has operated profitably and independently since its acquisition — McDonnell says Vantis Life will enjoy an equal measure of independence, as the wide latitude afforded subsidiaries has served Penn Mutual well.
McDonnell added that Penn Mutual will continue to grow and invest in its advisor network, a field force comprising more than 1,000 career agents and 5,000 independent advisors, many of whom cater to the high net worth market. Among them: insurance and financial service professionals affiliated with the producer groups NFP and Lion Street.
She says Penn Mutual is counting on these initiatives to help propel the Pennsylvania-based carrier to the top tier among mutual insurers.
Related: Genworth prepared for asset sales as market shuns borrowers
Penn Mutual’s purchase of Vantis Life will, says CEO Eileen McDonnell, enable the mutual insurer to achieve economies of scale in a consolidating marketplace. (Photo: Thinkstock)
“Pre-crisis, Penn Mutual ranked 38 in new life insurance sales,” says McDonnell. “Today, we occupy the 17th spot. “We believe that over the next 8 years, we should be able to break through the top 10 mutual insurers and mutual holding companies.
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“Since the financial crisis of 2007-2009, we’ve increased life insurance sales at a CAGR [compounded annual growth rate] of 7 percent,” she adds. “That compares with an industry-wide growth rate that, according to LIMRA, hovers at just 2 percent.”
