Who are Pan American Life Insurance Company and Encova Life Insurance Company?
Encova Mutual Insurance Group and Pan American Life Insurance Group have made a joint announcement that Encova Life Insurance Company (Encova Insurance), an affiliate of the Encova Mutual Insurance Group, will be acquired by and merged into Pan American Life Insurance Company (PALIC).
Encova Insurance is a super-regional carrier, ranked in the top twenty mutual insurance companies in the United States. The company is rated A (excellent) by AM Best.
The Encova Group markets insurance solutions through more than 2,000 independent agencies in the Midwest, Northeast and South.
Pan American Life Insurance Group is a leading provider of life, accident, and health insurance. PALIG operates in forty-nine states, the District of Columbia (DC), Puerto Rico, the U.S. Virgin Island and throughout Latin America and the Caribbean.
How will this merger benefit PALIC’s U.S. life insurance business?
Both Encova and PALIC benefit from the transaction. It enables Encova to focus on its P&C businesses, while it strengthens Pan-American Life Insurance Group’s position as a premier life, accident, and health insurance provider in the Americas.
In terms of PALIC’s investment portfolio, this acquisition and merger adds approximately $60 million in revenues, $600 million in total assets, and $38 million in insurance premiums.
The 82,000 covered lives will help with PALIC’s U.S. life insurance business, in terms of having a better scale and reach.
José S. Suquet, the Chairman of the Board and CEO of PALIG said that the acquisition is aligned with their U.S. growth strategy and demonstrates their commitment to the U.S. market and to their whole life business.
The addition of Encova Life’s business moreover complements and strengthens PALIC’s Mutual Trust Life Solutions (MTLS) division, further solidifying PALIC’s market leadership position with increased scale, greater financial strength, a sterling ratings profile, and enhanced growth opportunities.
TJ Obrokta Jr, the Encova Insurance President and CEO said that they remain committed to their agency partners and will help to ensure that the transition to PALIC is a smooth process for their life agents and policyholders.
What are the next steps for the merger of Encova Life into PALIC?
The transaction was unanimously approved by Encova Insurance and PALIC’s Boards of Directors. It is likely to close at the end of 2023.
This will immediately be followed by the merger of Encova Life into PALIC, subject to certain customary closing conditions, including approval by relevant insurance regulatory authorities.
Following the merger, PALIC will assume all Encova Life policies. There will be no changes to product terms or features for current policyholders.