Protective Life Acquires United Investors for $316 Million

Copyright 2010 A.M. Best Company, Inc.All Rights Reserved BestWire

September 14, 2010 Tuesday 04:13 PM EST

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Protective Life Acquires United Investors for $316 Million

Sean P Carr

BIRMINGHAM, Ala.

Protective Life Insurance Co. will purchase United Investors Life Insurance Co. from Liberty National Life Insurance Co. in a $316 million deal expected to close by the end of the year.

The deal will eventually merge United Investors into Protective Life, officials of parent corporation Protective Life Corp. said in a conference call. Protective Life will pay $260 million after accounting for excess capital of approximately $56 million held by United Investors Life Insurance Co. at closing. The deal does not include any outside financing, Protective Life Chairman, President and Chief Executive Officer John D. Johns said during the call. Liberty National is a subsidiary of Torchmark Corp.

"We think the integration here is fairly straightforward," he said.

Protective Life will take on approximately 135,000 in-force policies, mostly whole life, Johns said. The portfolio includes "straightforward life and annuity products," Protective Life Vice Chairman and CFO Rich Bielen said. "We're picking up a high-quality investment portfolio."

Protective Life Insurance Co. has a Best's Financial Strength Rating of A+ (Superior). United Investors Life Insurance Co. has a Best's Financial Strength Rating of A (Excellent).

Shares of Protective Life Corp. (NYSE: PL) were trading at $21.20 a share the afternoon of Sept. 14, up 0.57% from the previous close. Shares of Torchmark Corp. (NYSE: TMK) were trading at $54.70 a share, up 1.81% from the previous close.

In June, A.M. Best Co. revised the outlook to stable from negative and affirmed the financial strength rating of A+ (Superior) and issuer credit ratings of "aa-" of the major life/health subsidiaries of Torchmark Corp. A.M. Best also revised the outlook to stable from negative and affirmed the FSR of A (Excellent) and ICR of "a" of Torchmark's stand-alone rated subsidiary, United Investors Life Insurance Company. Concurrently, A.M. Best has revised the outlook to stable from negative and affirmed the ICR of "a-"and all existing debt ratings of Torchmark (BestWire, June 15, 2010).

(By Sean P. Carr, Washington Correspondent: [email protected])

September 15, 2010

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