The Canadian-based wealth management, life and health insurance company Great-West Lifeco Inc GWLIF announced Thursday that it reached an agreement to sell substantially all of its Colorado-based individual life insurance and annuity business for CA$1.6 billion ($1.2 billion).
What Happened
Protective Life Insurance Company has agreed to acquire the assets of the Great-West Life & Annuity Insurance Company subsidiary, which include bank-owned and corporate-owned life insurance, single premium life insurance, individual annuities and closed block life insurance and annuities.
The assets contributed CA$120 million to Great-West Lifeco's net earnings for the first three quarters of 2018.
Why It's Important
Great-West Lifeco's divestiture will better position the Canadian company to focus on its retirement and asset management businesses in the U.S., company President and CEO Paul Mahon said in a press release.
The financial impact of the divestiture will better position the company to consider other capital management activities, including a share repurchase program to help offset the earnings impact from the business sale.
Robert Reynolds, the president and CEO of Great-West Lifeco U.S. LLC, said the combined strength of the Great-West and Protective businesses will create new opportunities for customers and distribution partners.
"Our team is committed to ensuring a seamless transition to Protective for our customers," Reynolds said in a statement.
What's Next
The transaction is expected to close in the first half of 2019 and remains subject to regulatory and customary closing conditions.
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