Massachusetts Mutual Life Insurance Co. has doubled down on its retail annuities business with the latest acquisition of a major annuity provider. Last Wednesday, MassMutual announced that they would purchase Cincinnati-based Great American Life Insurance Company for $3.5 billion.
Great American, which is owned by American Financial Group, provides fixed and fixed indexed annuities. Over the first three quarters of 2020, the company ranked 13th in fixed annuity sales, at about $2.4 billion, according to a recent article from InvestmentNews. Over the same time period, MassMutual was the fourth-leading fixed annuities seller, at about $5.9 billion, and the ninth-biggest annuities seller overall. The sale is expected to close during the second quarter.
“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,” MassMutual CEO Roger Crandall wrote in the announcement.
“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,” said Craig Lindner, American Financial Group co-CEO.
While sales of fixed indexed annuities fell about 30% in 2020, when compared to 2019 sales, demand for traditional fixed deferred annuities actually increased during the fourth quarter, bringing full-year sales ahead of 2019.
Written by Rachel Summit