Continental General Insurance Company, a subsidiary of HC2 Holdings Inc., today completed a major long-term care insurance (LTCI) deal with Humana Inc. — and Continental managers are out looking for more LTCI risk transfer deals.
Continental General paid $10,000 in cash to Humana Inc., for the shares of KMG America Corp., the parent company of Kanawha Insurance Company.
In exchange, Continental General received Kanawha’s assets, $195 million in extra cash from Humana, and responsibility for about 29,300 LTCI policies written by Kanawha.
(Related: Humana Finds New Home for LTCI Unit)
Continental General will emerge from the deal with about $3.8 billion in cash and invested assets, up from $1.5 billion before the close of the transaction.
Philip Falcone, HC2′s chief executive officer, said completing the deal marks a significant milestone in Continental General’s growth.
“We believe this transaction validates our platform and positions us as the counterparty of choice for future [LTCI] transactions,” Falcone said.
Falcone said Wednesday, during a conference call with securities analysts, that Continental General managers believe that completing such a large, high-quality, complicated transaction will help Continental General grow more quickly.
“I think getting the regulatory approval from a number of states we had to was a big, big step for us and gives us a lot of credibility,” Falcone said.
HC2 and Continental General
HC2 is a publicly traded New York-based company that buys and runs other companies.
It hired James Corcoran, a former New York state insurance superintendent, to run, and expand, its insurance business in 2015. One goal has been for the company to get into the business of buying unwanted blocks of LTCI business from insurers.
HC2 agreed to acquire United Teacher Associates Insurance Company and Continental General Insurance Company from American Financial Group Inc. in April 2015.
Thanks to the American Financial deal, Continent General is already administering about 58,000 LTCI policies. The company is also administering about 35,000 life policies and annuity contracts.