Unum Group (UNM - Free Report) has acquired Pramerica ??ycie TUiR SA from a subsidiary of Prudential Financial, Inc. The deal will help the company expand its European presence.
Poland-based Pramerica is a financial protection provider. Addition of the same will help Unum Group leverage its solid agents and brokers’ network to grow its financial protection offering. The acquirer considers Poland to be an attractive market for financial protection benefits and thus, the acquisition seems a strategic fit for the company.
Unum Group boasts a leadership position in disability income protection insurance space in the United States as well as the United Kingdom. The transaction will be neutral to accretive to Unum Group’s 2018 results.
Also, Unum Group stated that the acquisition will not impact its capital management strategy of putting money in growth projects as well as enhancing shareholder value. Also, the company continues to expect operating earnings to grow between 17% and 23% in 2018.
Pramerica will be marketed under Unum Group’s brand name later this year but will remain a separate business. The latter will help the former intensify its focus on making investments in individual and group business segments and help introduce new digital capabilities as well as financial protection products.
Strategic buyouts have helped the company’s business to boom and also emerged as one of its key growth strategies. Thus, this acquisition is in tandem with the company’s goal.
Shares of Unum Group have lost 28.2% against the industry’s increase of 2% year to date. Nonetheless, a sustained operational performance, favorable benefits experience as well as solid top-line growth in the core businesses should help the company’ shares to rebound.
Unum Group carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Insurers Following Suit
In pursuit of the inorganic growth route, ramping up a company’s operational profile seems a well-adopted tactic by insurers since acquisitions set a prominent trend in the insurance domain. Markel Corporation (MKL - Free Report) has agreed to buy a majority stake in Brahmin, a maker of fashion leather handbags. Brown & Brown of Florida, Inc., a unit of Brown & Brown, Inc. (BRO - Free Report) , bought Vandroff Insurance Agency, Inc. to improve its service portfolio. Arthur J. Gallagher & Co. (AJG - Free Report) acquired Rogers & Young Insurance Services, LLC. to consolidate its capabilities for offering better service to customers.
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