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Insurance industry

A.M. Best Places American Heritage Life Insurance Ratings Under Review Following Allstate Acquisition

Strategic Insights

— 2 min read

A.M. Best Co., a leading insurance rating agency, has placed the ratings of American Heritage Life Insurance Co. and its operating affiliates under review with developing implications. This action follows the announcement of Allstate Corp.'s definitive agreement to acquire American Heritage Life Investment Corp. for approximately $1.1 billion. The acquisition will provide Allstate with a strong presence in the life and health insurance market and opportunities for cross-selling and product expansion.

Key Takeaways:

  • American Heritage Life Insurance Co. and its operating affiliates have their ratings placed under review with developing implications by A.M. Best Co.
  • The review is a result of the acquisition agreement between Allstate Corp. and American Heritage Life Investment Corp., worth approximately $1.1 billion.
  • American Heritage Life is a wholly owned subsidiary of American Heritage Life Investment Corp. and is the third-largest distributor of life, disability, and health insurance products in the work-site market.
  • The company has relationships with over 15,000 active employers and markets group life and health products to small and mid-size employers.
  • A.M. Best Co. will review the post-acquisition organization, pro-forma financial information, and plans for integrating operations and developing cross-marketing opportunities.
  • The rating will remain under review pending discussions with management regarding ongoing operations and the close of the transaction, which is expected by the end of the year.
  • The transaction is subject to regulatory and shareholder approval.
  • A.M. Best views the transaction favorably, allowing for product expansion and additional cross-selling opportunities.
  • The existing management of American Heritage Life will continue to run the business under its current brand name, and the company's headquarters will remain in Jacksonville, Fla.
  • American Heritage Life, Florida, is currently rated A+ (Superior), with its life and health insurance affiliates receiving the following ratings: Columbia Universal Life Insurance Co., A- (Excellent); Concord Heritage Life Insurance Co., B++ (Very Good); and, Keystone State Life Insurance Co., B+ (Very Good).

Statistics:

  • The consideration for the deal is approximately $1.1 billion in stock and cash, with Allstate assuming AHLIC's obligations under its outstanding mandatorily redeemable preferred securities.
  • American Heritage Life is a wholly owned subsidiary of American Heritage Life Investment Corp. and the third-largest distributor in the nation of life, disability, and health insurance products in the work-site market.
  • The company has over 15,000 active employer relationships and markets group life and health products to small and mid-size employers.

Sources:

  • BUSINESS WIRE, "A.M. Best Places American Heritage Life Insurance Ratings Under Review Following Allstate Acquisition" (July 12, 1999)
  • A.M. Best Co. website, www.ambest.com.

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