Nassau Reinsurance Group Holdings has signed an agreement to acquire traditional insurance business of Universal American (UAM), for around $43m.
The deal includes additional revenues of $13m to $24m to UAM in the form of potential earn-out payments by June 2018.
Nassau will acquire Constitution Life Insurance, The Pyramid Life Insurance, in addition to the traditional insurance business written by American Progressive Life & Health Insurance Company of New York.
UAM’s traditional insurance business includes medicare supplement, long term care, disability, life, and other ancillary insurance products.
Universal American chairman and CEO Richard Barasch said: "Our core strength is our proven ability to partner with providers, especially primary care physicians, to improve health outcomes while reducing cost in the medicare population."
The deal is expected to generate an after-tax loss of around $150m, including the write-off of about $53m in intangible assets, UAM stated.
Nassau Reinsurance Group chairman and CEO Phillip Gass said: "Nassau is excited to acquire UAM’s Traditional Insurance business, providing UAM with a complete solution to exit these business lines."
Subject to customary closing conditions, the deal is expected to be completed by early 2016.
Nassau focuses on purchasing and operating onshore and offshore platforms with long tail liabilities in the life, annuity and long term care sectors.
In September, it signed an agreement to acquire US-based The Phoenix Companies, for around $217m. The deal includes two insurance operating subsidiaries Phoenix Life Insurance and PHL Variable Insurance.
Image: The deal is expected to be closed in 2016. Photo: courtesy of Savit Keawtavee / FreeDigitalPhotos.net.