United Fire Group will sell its life insurance subsidiary to an Illinois-based insurance holding company, UFG announced Tuesday.
Kuvare US Holdings plans to acquire United Life Insurance Co., the UFG subsidiary, in a deal valued at $280 million. The acquisition is expected to close in the first half of 2018 and is subject to regulatory approval.
Based in downtown Cedar Rapids, UFG sells property-and-casualty insurance, life insurance and annuities. It has about 1,100 employees.
UFG CEO Randy Ramlo said in a statement the decision to sell United Life “was made in the best interest of UFG, its shareholders and United Life, from both a business perspective and a personal perspective.” He also said Kuvare has a “desire to maintain a strong presence in Cedar Rapids.”
“Though this decision does not come without a sense of sadness, it is exceeded by a larger sense of opportunity,” Ramlo said. “We are confident United Life and its staff will thrive under the leadership of Kuvare.”
United Life has 46 employees, most of whom work in Cedar Rapids, UFG spokeswoman Colleen Scholer said.
“As part of the agreement, Kuvare will maintain office space for United Life in the Cedar Rapids area, with offers of employment for staff members and no planned changes in positions or salaries,” she said.
Michael Sheeley, vice president and chief operating officer of United Life, said he plans “to continue with United Life Insurance Co. at this time.”
CEO Dhiran Jhaveri said Kuvare, which started in 2015, is “very excited to be a part of the community.”
“We are excited to continue to grow and build in Iowa, to grow and build in Cedar Rapids,” he said in an interview Tuesday.
Kuvare Chief Operating Officer Carlos Sierra said employees and customers should not see a change with the acquisition.
“All the employees continue to be employees, all the policyholders continue to call the same number, all the policies are still in force, everything continues the way it was,” Sierra said.
The sale of United Life does not affect UFG’s ongoing renovation of The American Building downtown.
UFG reported net income of $49.9 million for 2016, 98 percent of which came from its property-and-casualty division.
Its life insurance division has seen declining profits, filings show. The life insurance division reported net income of $786,000 in 2016, down from $3.8 million in 2015 and $6.8 million in 2014. More than two-thirds of the premiums written by the company’s life insurance division were in Iowa, Minnesota, Illinois, Wisconsin and Nebraska.
ARTICLE CONTINUES BELOW ADVERTISEMENT
UFG’s announcement Tuesday is just the latest acquisition deal related to Cedar Rapids. Earlier this month, United Technologies Corp. announced it plans to buy Rockwell Collins in a deal valued at $30 billion, including debt.
l Comments: (319) 398-8366; firstname.lastname@example.org