MassMutual buys Great American Life Insurance for $3.5bn in cash

US-based Massachusetts Mutual Life Insurance Company (MassMutual) has entered into a definitive agreement with American Financial Group (AFG) to acquire its annuity business for $3.5 billion in cash.

The deal will see MassMutual purchase Great American Life Insurance Company (GALIC) and its two insurance subsidiaries, Annuity Investors Life Insurance Company and Manhattan National Life Insurance Company, which primarily offer traditional fixed and fixed indexed annuity products.

The transaction will expand MassMutual’s presence in the retail annuity market by broadening and diversifying its product and distribution capabilities. At the same time, it will result in AFG’s exit from the fixed and indexed annuity market.

Following the completion of the deal, which is expected in the second quarter of 2021, Great American Life will operate as an independent subsidiary of MassMutual from its current headquarters in Cincinnati.

“This acquisition is an excellent strategic fit for MassMutual that will broaden our product offerings, expand our distribution, and generate additional earnings, allowing us to build a true lifetime income franchise and deliver ongoing value to our policyowners and customers,” said Roger Crandall, chairman, president and CEO of MassMutual.

S. Craig Lindner, AFG’s co-chief executive officer, said: “This transaction presents an excellent opportunity for Great American Life and MassMutual to be one of the leading providers of traditional fixed and indexed annuities in major distribution channels and markets. In fact, MassMutual has among the highest insurance financial strength ratings, which we believe will result in enhanced distributor recruitment and policyholder retention.”

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