Lincoln Financial Agrees to Acquire Liberty Mutual Life Unit

The Radnor, Pennsylvania-based company said in a slidedeck describing the deal that it’s hoping the Liberty Life acquisition will help it reach national benefits brokers and large employers, and accelerate growth in sales of products that are paid for by the employees, rather than by the employers.

Lincoln Financial said it will pay some of the deal costs by issuing debt.

Richard Bielen, the president of Birmingham, Alabama-based Protective Life, said his company hopes to provide value for Liberty Life’s individual life and annuity customers.

Protective Life sees acquiring the Liberty Life individual life and annuity block as the foundation for an “opportunity for growth and expansion through these segments in the future.”

Protective Life is now a subsidiary of Dai-ichi Life Holdings Inc. of Tokyo.

The Rating Agency Perspective

Fitch Ratings said in a comment that it has a positive outlook on Lincoln Financial and is neutral about the possible effects of the Liberty Life deal.

The deal should help Lincoln Financial increase its size in the group life and group disability markets, and diversify its sources of revenue, Fitch said. 

Making an acquisition work can be tricky, but Lincoln Financial has been increasing rates for many group benefits customers in the past few years, and the company’s success at repricing the group insurance business may be a sign it can handle an acquisition, Fitch said.

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