Reinsurance Group of America (RGA - Free Report) will divest its Dutch life insurance company, Leidsche Verzekering Maatschappij N.V. (Leidsche) to De Goudse N.V. (De Goudse) for an undisclosed amount. The transaction is subject to approval of the Competition Authority, De Nederlandsche Bank and the Bermuda Monetary Authority, in addition to the completion of the advice procedure with the works council of De Goudse.
Reinsurance Group noted that the move will be in the best interest of Leidsche and will enable the latter to execute its long-term growth strategy in the protection market. Reinsurance Group also stated that the divestment of Leidsche will help it serve its clients in its reinsurance business in the Netherlands better. Leidsche exited 2019 with $0.5 billion liabilities.
Reinsurance Group boasts a leadership position in the Canada as well as U.S. and Latin American traditional market, along with value embedded in-force business generating predictable long-term earnings. The life reinsurer remains focused on strengthening its position in target markets and business lines.
Leidsche holds a strong position in term life and annuities market. Thus, the addition of Leidsche and integrating it to De Goudse’s business will help the acquirer consolidate its life insurance business as well as execute on its ‘New-life’ strategy (focus on new product development and production apart from acquiring portfolios and companies that fit in with the strategy). The acquisition of a portfolio from BNP Cardif in 2019 by De Goudse was in line with its growth strategy.
Shares of Reinsurance Group have plunged 59.2% year to date compared with the industry’s decline of 21.8%. The stock carries a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Some better-ranked companies in the insurance industry are Old Republic International Corporation (ORI - Free Report) , Fidelity National Financial, Inc. (FNF - Free Report) and Horace Mann Educators Corporation (HMN - Free Report) ,
Old Republic engages in the insurance underwriting and related services business, primarily in the United States and Canada. The company delivered average four-quarter positive surprise of 31.72%. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here
Fidelity National provides various insurance products in the United States. The company delivered average four-quarter positive surprise of 10.93%. It sports a Zacks Rank #1.
Horace Mann operates as a multiline insurance company in the United States. The company delivered average four-quarter positive surprise of 11.03%. It carries a Zacks Rank #2 (Buy).
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