The Dai-ichi Life Insurance Co. headquarters stands in Tokyo, Japan, on Monday, June 2, 2014. Dai-ichi Life is preparing to buy Protective Life Corp. for an amount that will probably exceed 500 billion yen ($4.9 billion) to expand in the U.S., Nikkei reported. Photographer: Akio Kon/Bloomberg The Dai-ichi Life headquarters building in Tokyo. (Photo: Akio Kon/BB)

A Japanese life insurer is acquiring a Canadian life insurer’s U.S. individual life and annuity business.

Protective Life Corp., a U.S.-based subsidiary of Dai-ichi Life Holdings Inc. of Tokyo, has agreed to acquire most of the U.S. individual life and annuity business of Great-West Lifeco Inc. through a reinsurance arrangement.

The deal has a value of about $1.2 billion, in U.S. dollars, according to Protective Life and Great-West.

(Related: Lincoln Financial Agrees to Acquire Liberty Mutual Life Unit)

Great-West says the businesses being transferred reported $95 million in net earnings during the first three quarters of 2018, meaning that the deal value amounts to about 9.7 times annual earnings.

Protective Life and Great-West hope to complete the deal by June 30.

What Dai-Ichi Is Getting

Dai-ichi Life acquired Protective Life in 2015, and this is the fourth major deal Protective Life has announced since that deal closed.

Protective Life is making the new reinsurance deal with Great-West Lifeco’s Great-West Life & Annuity Insurance Company unit, which is based in Greenwood Village, Colorado.

Great-West Life & Annuity Insurance Company and three affiliates — Great-West Life & Annuity Insurance Company of New York the U.S. branch of The Canada Life Assurance Company and the U.S. branch of The Great-West Life Assurance Company — intend to entrust Protective Life with:

  • A bank-owned life insurance operation.
  • A corporate-owned life insurance operation.
  • An executive benefits operation.
  • A single-premium life insurance operation.
  • An individual annuity business.
  • Portions of closed blocks of life and annuity business.

Protective Life would also administer a block of participating policies that would stay on Great-West Life & Annuity’s books.

Great-West Lifeco would keep:

  • Great-West Life & Annuity’s Empower Retirement unit.
  • Great-West Life & Annuity’s Great-West Investments unit.
  • Great-West Lifeco’s individual life and annuity operations in Canada and in other parts of the world outside of the United States.

The Players’ Reasoning

Paul Mahon, Great-West Lifeco’s president, said in a statement that his company wants to focus on the retirement and asset management markets in the United States.

Richard Bielen, Protective Life’s president, said in a statement of his own that his company made the deal because it wants to get bigger.

“The life and annuity business has been a cornerstone of Protective throughout our history and will continue to be an area of future growth for the company,” Bielen said.

— Read Dai-Ichi’s Protective to Buy Genworth Term Life Insurance Blocks, on ThinkAdvisor.

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