United Fire & Casualty Company (UFG), a subsidiary of United Fire Group, has entered into an agreement with Kuvare US Holdings to sell its subsidiary, United Life Insurance Company for $280m.
The cash transaction is expected to close in the first half of 2018, subject to regulatory approvals. The proceeds from the sale will be used by United Fire Group for capital management purposes including share repurchases and future acquisitions.
United Fire Group, through its subsidiaries, is involved in the business of writing property and casualty insurance and life insurance and selling annuities.
It is a licensed property and casualty insurer in 46 states in the US and the District of Columbia, and represented by 1,200 independent agencies. Its subsidiary, United Life Insurance Company, is licensed in 37 states.
UFG president and CEO Randy Ramlo said: “The decision to sell our life subsidiary to Kuvare was made in the best interest of UFG, its shareholders and United Life, from both a business perspective and a personal perspective.
“By selling United Life to Kuvare, we have established a solid future for our life insurance employees, insurance agents and customers, while allowing us to continue to build on the success of our property and casualty operations.”.”
Following the sale, UFG will focus on its property; casualty and surety operations which are its core areas. It will also invest in enterprise analytics and a multi-year technology platform which will help the company in its underwriting decisions.
Ramlo added: “By dedicating all of our resources to our core business segment, we can position ourselves for future growth and profitability, continually strengthening our financial performance and enhancing our value for shareholders."
Kuvare, based in Chicago, provides value-oriented life and annuity products to the middle-market. After the acquisition of United Life Insurance Company, Kuvare will have consolidated assets of over $2.5bn.
Sandler O’Neill + Partners is the exclusive financial advisor and Sidley Austin is acting as legal advisor to United Fire in connection with the transaction.
Image: Kuvare to acquire UFG's life insurance subsidiary. Photo: courtesy of adamr/ FreeDigitalPhotos.net.