Prosperity Life to Buy Annuity Issuer for $1.9B
Paul Singer's Elliott Management owns a majority stake in National Western Life's buyer.
An insurer backed by Elliott Investment Management lost out on an effort to acquire one publicly traded U.S. annuity issuer in February, but now it has reached an agreement to acquire another.
The insurer, Prosperity Life Group, has agreed to pay about $1.9 billion in cash for National Western Life Group.
Nicholas von Moltke, the Prosperity Life CEO, said his company hopes to use National Western to expand its insurance business, but he gave no details about what the expansion might look like.
Ross Moody, National Western’s CEO, emphasized that his company’s board “conducted a thorough review of a range of strategic alternatives and possible business opportunities” before saying yes to Prosperity Life.
“The transaction provides clear and immediate value for our stockholders at an attractive premium,” Moody said.
What it means: Many publicly traded companies that back your clients’ life insurance policies and annuities face intense pressure from shareholders to sell to privately held insurers backed by big investment companies.
The players: The seller, National Western, is a Galveston, Texas-based company that was founded in 1956 by Robert Moody Sr., a member of the family that founded another Galveston-based insurer, American National, in 1905.
The company reported $42 million in net income for the first half of the year on $339 million in revenue.
The company had 94,343 annuity contracts in force at the end of June. Non-variable annuities accounted for $4.9 billion of its $5.8 billion in annuity reserves.
The buyer, Prosperity Life, already owns SBLI USA Life, S.USA Life and Shenandoah Life.
Elliott Management, an investment firm founded by Paul Singer in 1977, acquired control over Prosperity Life in 2019.
In 2022, Prosperity Life tried to acquire American Equity Investment Life, but that company ended up spurning Prosperity Life and agreeing to accept a $4.3 billion offer from Brookfield Re.
In 2021, the board of American National, which at the time was a public company controlled by members of the Moody family, agreed to accept a $5.1 billion acquisition offer from Brookfield Re.
Elliott Management and other active investors have been aggressive about pushing some public life and annuity issuers to sell or change in the past few years.
In 2021, Elliott Management succeeded at persuading Principal Financial to narrow the scope of its operations.
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