iA Financial Group to grow US presence with new deal
iA Financial Group to grow US presence with new deal | Insurance Business Canada
Mergers & Acquisitions
iA Financial Group to grow US presence with new deal
Move will add two businesses operating in the mid-market life insurance space
Mergers & Acquisitions
By
Mika Pangilinan
Canadian insurance and wealth management giant iA Financial Group has entered a deal to acquire Vericity for US$170 million, a bid that will grow its US presence.
Vericity conducts business through two operating subsidiaries in the mid-market life insurance space. Fidelity Life is an Illinois-based insurance carrier founded in 1896, while eFinancial is a direct-to-consumer digital insurance agency.
A press release from iA said funding for the transaction will come from existing cash on hand. The move is projected to reduce the firm’s solvency ratio by around three percentage points.
“With this acquisition, we are adding scale to our already well-established and successful US individual life insurance business and creating value for our shareholders by building on our core insurance and distribution competencies,” said Mike Stickney, executive vice president, chief growth officer US operations, co-head of acquisitions.
According to Stickney, the addition of Fidelity Life will allow iA to pursue “further growth” in the US individual life insurance market. At the same time, the eFinancial digital agency will help diversify its distribution capabilities.
Vericity CEO James Hohmann said the acquisition offers “compelling value for all of our stockholders and reflects the strength of our business.”
“We look forward to accelerating our strategic advancement within iA as we further grow the eFinancial platform, the business overall, and create new opportunities for our people and the franchise,” Hohmann added.
The transaction is expected to close in the first half of 2024, following regulatory approvals in Canada and the US.
Vericity employs over 400 individuals and is majority owned by private investment firm J.C. Flowers & Co.
What are your thoughts on this story? Feel free to comment below.
Related Stories
Keep up with the latest news and events
Join our mailing list, it’s free!
