Connecticut Insurance

The offices of the Metropolitan Life Insurance Company and New England Mutual Life Insurance Company agreed yesterday to merge, the thickness of the financial situation Met Life in New England’s rich mutual customers.

With the merger of the assets of Met Life, the nation’s second insurance company, grow to $ 146.9 billion - not enough to remove the Prudential Insurance Company of America, has $ 167.3 billion in assets the first place. New England, headquartered in Boston, is the place No. 27

Given that both Met Life, headquartered in New York and New England are mutual companies, owned by their policyholders, the merger would not be in cash, or an issue of new shares as the merger of ‘acquired by the shareholder. Instead, New England’s 560000 insured own, a company $ 1 billion of capital would own a portion enlarged MetLife $ 8.3 billion of capital and 40 million customers, including the group of Employers sponsored.

The merger, subject to the approval of two insurance companies.

The turnover at the top of the market have been much faster than turnover middle-income households are the main resource in Met Life. However, New England’s Ratings have declined in recent years because property losses and merger is anticipated that the financial strength of the company and further hearing is expected to help expand its turnover. All new and existing New England policy is supported by Met Life.

Among the conditions that both companies would also continue selling insurance in his own name, but its finances were the strongest Met Life umbrella.

The insurance industry, including a large number of giant companies on reciprocity in possession of their policyholders in the river. Light gains in conjunction with the sale of the inadequacy of traditional networks of agents and the loss of business to other facilities such as investment funds have inspired many companies to change by the sale are not necessarily companies, merger and reduce costs.

Another major announcement of the merger of mutual insurance companies is expected in mid September, if the directors of Massachusetts Mutual Springfield, Massachusetts, Connecticut and reciprocity, which is based in Hartford, it is expected that they approve the merger, one of the countries 10 largest insurers. Leaders in both companies previously announced they have control of concentrations and interviews said they were expecting a merger would strengthen the financial capacity of Connecticut Mutual and reduce costs by eliminating a lot of duplication .

“The assurance of the economy as a whole is facing major challenges to reduce costs and increase their turnover, and Met Life and New England Mutual merger just raises a certain higher threshold for d other companies, “said Larry Mayewski, head of life insurance analyst at AM Best Company A Oldwick, New Jersey, company assessments. The greatest growth opportunity for insurers, he said, is a niche market serving New England - high-income individuals within 45 to 59 years, need advice on pensions and fortune planning.

“Customer preferences have changed, with less interest for insurance protection against misfortune and more emphasis on insurance as products for retirement,” said Mayeweski. This means that companies need, like Met Life better trained sales agents to sell the products can be complex, not just the usual products on the past.

“I assume that mergers and, in general much more common,” said Robert W. Stein, head of insurance group at Ernst & Young, the auditing firm. “Many companies can not not have the stomach for it, because inertia and tribes in the management, “he said,” but most mutual companies, we need more capital to grow. ”

An essential means to acquire more capital, “said Stein, is a store that mergers to develop business from one insurer to the attractiveness of markets, as in the case of Met Life and New England, or by reducing costs by eliminating duplicate jobs.