Michael Gorzynski Now Controls a Long-Term Care Insurer
Gorzynski's MG Capital Management bought Continent Insurance from HC2 for $65 million in cash.
HC2 Holdings — a conglomerate that owns a wide range of companies — has succeeded at selling a long-term care insurance (LTCI) business.
The firm announced Wednesday that it sold the business, Continental Insurance Group Ltd., to MG Capital Management Ltd. for $65 million in cash and about $25 million in Continental Insurance assets.
The MG Capital-Continental deal includes two Continental Insurance Group subsidiaries, Continental Insurance Company and Continental LTC Inc., as well as Continental Insurance Group.
The History
Continental first entered the LTCI business by acquiring two LTCI issuers from Great American Financial Resources in 2015. The company is best known for acquiring Kanawha Insurance Company, a longtime LTCI issuer, from Humana in 2018.
Michael Gorzynski, the managing member of MG Capital, started out about a year ago as a dissident HC2 investor. He argued that HC2 had too much debt, had a haphazard corporate strategy and lacked directors with insurance expertise.
Gorzynski went on to win a seat on the Continental board and became Continental’s chairman and president in October 2020. He owns 6.6% of HC2′s stock.
Continental Insurance
Continental Insurance has offices in Austin, Texas, and says it’s administering insurance policies and annuity contracts for about 125,000 LTCI, life, annuity and supplemental health insurance customers.
The main insurance company subsidiary is a stock life insurance operation that’s regulated by Texas officials and is licensed to do business in 49 states, the District of Columbia and the U.S. Virgin Islands.
The company has open job listings for a systems analyst, an accounts payable analyst, a claims examiner, and two claims call center representatives.
The Future
Continental Insurance has focused on administering closed blocks of LTCI business but has hinted in the past that it might write new business.
Gorzynski said in a statement about his plans for Continental Insurance that, “We look forward to continuing to build a best-in-class organization that prioritizes policyholders.”
What the Deal Means
LTCI issuers have a reputation for being difficult to sell. MG Capital’s acquisition of Continental Insurance, for cash, could break the ice and lead to other LTCI issuer deals.
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