AmeriLife focuses on ‘organic growth’ in next step

By John Hilton

With a key December hire in a newly created position, AmeriLife took the next step in its plan to grow annuity sales organically.

Matthew Coleman brings nearly 30 years of industry experience to AmeriLife, where he is the company’s first vice president of annuity and life product innovation.

Headquartered in Clearwater, Fla., but doing business nationally, AmeriLife sees opportunity in the annuity space, said Patrick Fleming, executive vice president of product innovation and corporate actuary for the company.

“A big part of AmeriLife’s growth strategy is expanding its presence in the annuities and fully underwritten life space,” Fleming explained.

“As part of our organic growth efforts, AmeriLife is continuing to develop and work through proprietary product opportunities within those aforementioned product lines. Matthew brings in-depth actuarial experience, which will help accelerate this process and help us stay in front of evolving trends in the annuity market.”

Heretofore, AmeriLife primarily concentrated on expansion through acquisitions of existing producers. It continues to thrive with these efforts as well.

In early November, AmeriLife shocked the industry with a blockbuster deal for TruChoice Financial Group. Headquartered in Minneapolis, TruChoice is one of the largest field marketing organizations in the industry.

The AmeriLife-TruChoice impact was felt at Integrity Marketing Group offices in Dallas, Texas and in New Jersey, where Simplicity Group is headquartered, as well as a few other places.

Independent marketing and distribution is big business in a country where 10,000 Americans retire each day. Competition favors scale and the voracious growth of these IMOs is changing the industry, said Sheryl Moore, president and CEO of Moore Market Intelligence and Wink Inc. Small- to mid-sized IMOs and FMOs are being gobbled up so quickly, it is forcing many to reconsider their plan, she said.

“It is hard to compete against an Integrity, Simplicity, or AmeriLife in terms of sales, and therefore annuity commission payouts,” she said. “For this reason, I’ve seen friends talking to these firms, when they previously wouldn’t have considered selling so soon. It just seems like for those who had planned to retire in five-to-seven years, I am seeing more of them entertain discussions with these three firms than I would have anticipated.”

Small beginnings

AmeriLife was founded in 1971 in Holiday, Fla., a small community just north of Clearwater, and sold life and health policies to people nearing retirement age. Over the next two decades, the company grew steadily as more and more pre-retirees flocked to Florida.

Along the way, “it became clear that there was a significant unmet need among this target [demographic], and the decision was made to expand the business nationally by building a network of independent insurance agents,” AmeriLife says in its official history.

The company began offering fixed and indexed annuities at a time when the product was expanding greatly beyond simple offerings. Medicare supplement products followed. AmeriLife made a giant leap forward when it began acquiring life, health and annuity brokerages.

In 1987, AmeriLife moved beyond its Florida borders by opening an office in North Carolina.

As the 21^st century progressed it was a heady time to be in the retirement business. Baby boomers rapidly aged and life insurance products evolved to meet versatile needs.

“AmeriLife’s strategy of serving (pre)retirees was truly an inspired one,” its company history states. “Not only is AmeriLife’s target group rapidly expanding in size, but this segment is less likely to be impacted by economic ups and downs and is very focused on ensuring their future physical and financial well-being.”

In recent years, AmeriLife continued to push through growth barriers under the leadership of CEO Scott Perry, brought aboard in 2016.

“One of the things that we first and foremost look for his talent. Second is strategic capabilities,” Perry said during a recent industry conference. “You’ve got to have people and you’ve got to have a capability that meets what we're trying to deliver … and that's to be a platform that serves the life and retirement needs, and those nearing retirement, really address those things that people are worried about.”

Inorganic growth

Under Perry, AmeriLife earnings have more than doubled, and the company has ambitious plans to double it again in the next three to five years. That accelerated growth is being fueled by supersized acquisitions.

In 2019, AmeriLife acquired a majority interest in Brookstone Capital Management, a deal that created a combined organization with more than $3.5 billion in annual life, health and annuity premiums and $2.7 billion in assets under management.

In 2021, the company struck a deal for Saybrus Partners, a life insurance and annuity distribution company. A little over a year later, AmeriLife then added TruChoice in a huge deal. The deal included Inforce Solutions. An affiliate of TruChoice, Inforce is a national brokerage general agency focused in the life insurance market.

While it appears from the outside to be an arms race, with Integrity, AmeriLife and others completing competing acquisitions, Perry said it isn’t that way at all.

The acquisitions “helped us accelerate some of our processes [and] it's helped us add talent, helped us add capabilities faster than if we would have built it organically. So, it's been a part of our strategy, but it is not the strategy,” Perry said.

AmeriLife entered 2023 claiming to be “the largest Insurance Marketing Organization (IMO) in the US dedicated to offering insurance and retirement solutions.”

Today, AmeriLife operates nationwide, employs more than 2,000 full-time employees, oversees $9 billion in annual premiums, has $8 billion in assets under management and generates $500 million in annual revenues. Fifty-five percent of its business is focused on health, 35% on annuities and 10% on life insurance.

The AmeriLife network includes more than 300,000 independent agents and advisors, and more than 200 carrier partners.

Voracious IMOs are disrupting traditional delivery of life insurance and annuities. But Perry sees AmeriLife’s venerable carrier partners, such as Transamerica and Nationwide, as crucial to their business model.

“I know what carriers do really well,” said Perry, former executive at CNO Financial and Bankers Life. “They price risk and they manage assets. I know what we can do really well, which is distribute products and drive efficiency across that value chain. Hopefully, we make their lives easier and make them more efficient at what they do.”

Future growth

That doesn’t mean AmeriLife isn’t interested in proprietary life and annuity products of its own. That’s where Coleman comes in.

Most recently a director at Willis Towers Watson, Coleman led business and product development, actuarial support and distribution strategy for the fixed, indexed and variable annuity markets. He previously co-founded the Ideal Producers Group, where he spearheaded the actuarial department and led product innovation, design and marketing.

“At a time of increased distribution aggregation in the life and annuity markets, the integration of product development and distribution is a key business accelerator,” Coleman said in a news release. “Quality and insightful product development turns insurer relationships into long-lasting partnerships and maximizes the value delivered up and down the vertical.”

That kind of return on investment is necessary for AmeriLife now that it is in the hands of private equity firms. Reservoir Capital Group and Black Diamond Capital Partners acquired AmeriLife in 2007, and sold it in 2015 to J.C. Flowers for less than $500 million, Barrons reported.

A third PE firm, Thomas H. Lee Partners, acquired AmeriLife in 2020 in a reported deal that exceeded $1 billion. In June, AmeriLife announced an investment from Genstar Capital, a leading private equity firm focused on investments in targeted segments of the financial services, healthcare, industrials and software industries.

“Genstar’s investment will accelerate our growth and help us continue to build out our platform to provide superior support to our carrier partners, our affiliates and our agents,” Perry said at the time.

Conjecture remains afloat that one or more of the aggressive IMOs will go public at some point. Perry doesn’t rule it out but said that isn’t the plan right now.

“We don't think about the exit. We think about running the business and building a great company,” he said. “There are a number of paths that we could go. Now is not the time, but we'll make the determination of what's the best way to maximize value for shareholders. Absolutely.”

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.