BB&T to Purchase Crump Group’s Life and P/C Divisions

BB&T Corp. is planning to expand their insurance operations by purchasing the life and property/casualty insurance divisions of a Roseland, N.J.-based broker, the company said in a statement. BB&T will acquire Crump Life Insurance Services and Crump Property/Casualty Insurance Services for $570 million.

The transaction is expected to add about $300 million in annual revenue to BB&T Insurance, the company said.

The transaction, which needs to be approved by regulators, is expected to close in the first quarter, BB&T said. The deal does not include Crump's retirement services business, Ascensus.

"As the largest independent wholesale life insurance distributor in the country, the Crump acquisition significantly expands and strengthens our insurance operations," said Kelly S. King, BB&T's chairman and chief executive officer. "The deal is a great strategic fit for BB&T, immediately increasing and diversifying our fee income while driving stronger revenues."

The acquisition of Crump's life insurance division catapults BB&T into the high net worth client realm. U.S. life insurers have been turning in recent years to brokerage general agencies, like Crump, as a way to effectively sell policies to the wealthy (Best's News Service, Jan. 10, 2011).

Currently, BB&T's wholesale insurance operations include property/casualty broker CRC Insurance Services, managing general agent Southern Cross TAPCO Underwriters and managing general underwriter AmRisc LLP. BB&T Insurance Services Inc. is the seventh-largest insurance broker in the world with 2010 total revenues of $1.161 billion, according to Best's Review. Shares of BB&T (NYSE: BBT) on the morning of Feb. 3 were trading at $28.99, up 3.46% from the previous close.

With 23 offices throughout the country, Crump Life Insurance Services supports the sale of life, long-term care, disability and annuity products, and life settlements. Crump Property and Casualty Insurance Services offers standard coverage to excess and surplus lines. Crump's managing general agents offer underwriting in transportation, workers' compensation, professional liability, personal accident and other lines of business.

John Howard, president and chief executive officer of Crump Group, will join BB&T Insurance operations in a senior leadership position reporting to Wade Reece, BB&T Insurance chairman and chief executive officer.

(By Michael Buck, senior associate editor, BestWeek: Michael.Buck@ambest.com)