Swiss Re Corporate Solutions to acquire leading employer stop loss underwriter, IHC Risk Solutions, LLC
NEW YORK, 5 January 2016 – Swiss Re Corporate Solutions has signed an agreement with Independence Holding Company (NYSE: IHC) to acquire IHC Risk Solutions, LLC and its direct employer stop loss (ESL) business, for an aggregate of USD 152,500,000 in cash.
The transaction includes IHC Risk Solutions' operations, its team of experts and business portfolio, including in-force, new and renewal business written with IHC subsidiaries, Standard Security Life Insurance Company of New York and Independence American Insurance Company. Upon closing, Swiss Re Corporate Solutions expects the transaction to be accretive to earnings already in 2016.
Through this arrangement, Swiss Re Corporate Solutions broadens its current ESL capabilities in the small- and middle-market self-funded healthcare benefits segment. The transaction enhances the company's underwriting and claims management capabilities, while strengthening its product distribution through IHC Risk Solutions' direct broker and third-party administrator relationships. Under the terms of the agreement, business produced by IHC Risk Solutions will be written through Swiss Re Corporate Solutions' largest US carrier, Westport Insurance Corporation, rated "A+ (Superior)" by A.M. Best and "AA-" by Standard & Poor's.
Bob Petrilli, CEO North America of Swiss Re Corporate Solutions, comments: "We are very pleased to join forces with IHC Risk Solutions, a firm with an excellent reputation and disciplined underwriting. Employers will realise tremendous value from our combined capabilities and expertise as they seek to better manage high-cost healthcare benefits and the financial risks associated with catastrophic medical events."
Mike Kemp, President of IHC Risk Solutions, says: "Since its inception, IHC Risk Solutions has focused on growing a world-class employer stop loss operation. Joining Swiss Re Corporate Solutions allows us to advance toward that objective. Our current and future clients will benefit from the financial strength of Swiss Re Corporate Solutions, while we grow our existing operations and core partnerships."
IHC Risk Solutions has over 100 employees in Arizona, Connecticut, Illinois, Indiana and New Jersey. The transaction is subject to regulatory approval and is expected to close during the first quarter of 2016.
About Swiss Re Corporate Solutions
Swiss Re Corporate Solutions offers innovative, high-quality insurance capacity to mid-sized and large multinational corporations across the globe. Our offerings range from standard risk transfer covers and multi-line programmes, to highly customised solutions tailored to the needs of our clients. Swiss Re Corporate Solutions serves customers from over 50 offices worldwide and is backed by the financial strength of the Swiss Re Group. For more information about Swiss Re Corporate Solutions, please visit www.swissre.com/corporatesolutions or follow us on Twitter @SwissRe_CS.
About Independence Holding Company
Independence Holding Company (NYSE: IHC) is principally engaged in the life and health insurance business, and the acquisition of blocks of policies through its insurance company and its marketing and administrative affiliates. The company furnishes medical stop-loss, group major and limited medical, short-term medical, group long-term and short-term disability, group life and various supplemental insurance products.
Cautionary Note on Forward-looking Statements
Certain statements and illustrations contained herein are forward-looking. These statements (including as to plans, objectives, targets, and trends) and illustrations provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to a historical fact or current fact.
Forward-looking statements typically are identified by words or phrases such as “anticipate”, “assume”, “believe”, “continue”, “estimate”, “expect”, “foresee”, “intend”, “may increase”, “may fluctuate” and similar expressions, or by future or conditional verbs such as “will”, “should”, “would” and “could”. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause Swiss Re’s actual results of operations, financial condition, solvency ratios, liquidity position or prospects to be materially different from any future results of operations, financial condition, solvency ratios, liquidity position or prospects expressed or implied by such statements or cause Swiss Re to not achieve its published targets. Such factors include, among others:
- instability affecting the global financial system and developments related thereto;
- deterioration in global economic conditions;
- Swiss Re’s ability to maintain sufficient liquidity and access to capital markets, including sufficient liquidity to cover potential recapture of reinsurance agreements, early calls of debt or debt-like arrangements and collateral calls due to actual or perceived deterioration of Swiss Re’s financial strength or otherwise;
- the effect of market conditions, including the global equity and credit markets, and the level and volatility of equity prices, interest rates, credit spreads, currency values and other market indices, on Swiss Re’s investment assets;
- changes in Swiss Re’s investment result as a result of changes in its investment policy or the changed composition of its investment assets, and the impact of the timing of any such changes relative to changes in market conditions;
- uncertainties in valuing credit default swaps and other credit-related instruments;
- possible inability to realise amounts on sales of securities on Swiss Re’s balance sheet equivalent to their mark-to-market values recorded for accounting purposes;
- the outcome of tax audits, the ability to realise tax loss carryforwards and the ability to realise deferred tax assets (including by reason of the mix of earnings in a jurisdiction or deemed change of control), which could negatively impact future earnings;
- the possibility that Swiss Re’s hedging arrangements may not be effective;
- the lowering or loss of one of the financial strength or other ratings of one or more Swiss Re companies, and developments adversely affecting Swiss Re’s ability to achieve improved ratings;
- the cyclicality of the reinsurance industry;
- uncertainties in estimating reserves;
- uncertainties in estimating future claims for purposes of financial reporting, particularly with respect to large natural catastrophes, as significant uncertainties may be involved in estimating losses from such events and preliminary estimates may be subject to change as new information becomes available;
- the frequency, severity and development of insured claim events;
- acts of terrorism and acts of war;
- mortality, morbidity and longevity experience;
- policy renewal and lapse rates;
- extraordinary events affecting Swiss Re’s clients and other counterparties, such as bankruptcies, liquidations and other credit-related events;
- current, pending and future legislation and regulation affecting Swiss Re or its ceding companies and the interpretation of legislation or regulations;
- legal actions or regulatory investigations or actions, including those in respect of industry requirements or business conduct rules of general applicability;
- changes in accounting standards;
- significant investments, acquisitions or dispositions, and any delays, unexpected costs or other issues experienced in connection with any such transactions;
- changing levels of competition; and
- operational factors, including the efficacy of risk management and other internal procedures in managing the foregoing risks.
These factors are not exhaustive. Swiss Re operates in a continually changing environment and new risks emerge continually. Readers are cautioned not to place undue reliance on forward-looking statements. Swiss Re undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.
This communication is not intended to be a recommendation to buy, sell or hold securities and does not constitute an offer for the sale of, or the solicitation of an offer to buy, securities in any jurisdiction, including the United States. Any such offer will only be made by means of a prospectus or offering memorandum, and in compliance with applicable securities laws.
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