iA Financial Group acquires insurance blocks from Prosperity Life Group in the US

Canadian insurer and wealth manager iA Financial Group has made a significant move in the US market with the acquisition of two insurance blocks from Prosperity Life Group. The financial terms of the transaction have not been disclosed, but the blocks consist of final expense and term life products from S.USA Life insurance Company, a Prosperity company. These blocks include over 115,000 policies and more than $100 million in annual premiums.

S.USA Life insurance Company, based in Arizona, is licensed to operate in 47 states and the district of Columbia. This acquisition not only adds to iA Financial’s portfolio but also extends an invitation to Prosperity’s distribution network to sell iA Financial’s products. This network comprises approximately 15,000 sales agents contracted through independent marketing organizations (IMOs).

Currently, around two-thirds of these agents and IMOs have existing agreements with American-Amicable Life insurance Company, a subsidiary of iA Financial, to distribute iA’s products. The remaining agents will be encouraged to enter similar arrangements. iA Financial expects this acquisition to be accretive from the first year, enhancing earnings on both a core and reported basis. However, the company’s solvency ratio is expected to see a decrease of around one percentage point.

Sean O’Brien, iA Financial’s executive vice-president and chief growth officer of US operations, expressed excitement about the transaction, stating, “This transaction will further increase iA’s strong growth momentum and expand again its presence in the United States. We look forward to welcoming new IMOs and agents and helping them continue to serve their customers well.”

The transaction is subject to standard closing conditions and comes shortly after iA Financial’s acquisition of Vericity. In a $170 million deal, iA Financial’s unit, iA, took over Vericity, a US-based direct-to-consumer Life insurance provider. Vericity, with a workforce exceeding 400, aims to offer ‘affordable’ Life insurance solutions to the middle market, emphasizing digital sales, rapid policy issuance, and non-medically underwritten products.

Overall, these strategic moves by iA Financial Group demonstrate its commitment to expanding its presence in the US market and enhancing its product offerings. The acquisition of insurance blocks from Prosperity Life Group and the recent acquisition of Vericity position iA Financial for continued growth and success in the competitive insurance industry.