Torchmark Corporation will acquire Family Heritage Life Insurance Company of America, a privately-held supplemental health insurance provider, for approximately $218.5 million.
The transaction will be funded internally with cash from Torchmark's insurance subsidiaries and is expected to close early in the fourth quarter of the year.
Founded in 1989 and headquartered in Cleveland, Ohio, Family Heritage is a specialty insurer focused primarily on selling individual supplemental health insurance products with a return-of-premium feature. It has approximately 1,200 captive sales agents, 41 sales directors and over 223,000 policies in force.
Statutory admitted assets at December 31, 2011 were approximately $488m, GAAP net income for 2011 was approximately $21m, and direct premiums written in 2011 were $162m.
"We are excited about the addition of Family Heritage to the Torchmark family," said Torchmark co-CEO's Gary Coleman and Larry Hutchison. "This transaction meets the criteria we established when we began looking at possible acquisitions several years ago.
"Family Heritage offers protection-oriented insurance to middle income families through a captive agency force that we believe we can help grow. The company has a track record of solid premium growth and strong underwriting margins with a business plan that incorporates a variable-cost marketing structure, and we expect a seamless transition."
