Connecticut Insurance

Massachusetts Mutual Life Insurance Company and Connecticut Mutual Life Insurance Company, former competitors, whose office is home to less than 30 kilometers, said yesterday they are merging.

A deal would be one of 10 nations largest life insurance. The discussions come at a time when many industry analysts expect many more combinations for insurance companies. Through economies of mergers of companies can help build financial strength, and combinations of companies can help small companies compete in areas where they previously in a disadvantage. Connecticut Mutual, for example, has only $ 4 billion of goods to their family of mutual funds and benefit from a combination of Massachusetts Mutual, the owner of the Management Corporation Oppenheimer, with $ 35 billion in its funds.

A concentration of Massachusetts Mutual, which is based in Springfield, Connecticut and Mutual, which is based in Hartford, it would be much larger than any mergers, which are in the final year of at least 19 insurers life have been merged or acquired by another 14.

“The increase in the concentration of activity we saw during the last year among stock companies seems to be, for the spread of reciprocity,” said Martha M. Butler, an analyst at Duff & Phelps, rating company in Chicago. While some companies fear May mutual social problems, dismissals and collaborators who are in mergers, she said mutual could still benefit from cost-cutting measures and increased capital requirements of force can not lead to mergers.

A merger of mutual companies, which are in possession of the theory of insurance, it is necessary that the consent of the insured and regulators of State. As none of the two companies, inventory, utilities act, the value of the merger can not be measured by business market.

The leaders of the two companies said yesterday that it assumes that would be a combination of significant cost savings, cut duplication in their neighbours, desk and widely dispersed SalesForces. They are available from six to eight weeks of study on the assessment of potential savings and determine whether it corresponds to a merger. For fear in their places of origin, they said that the new entity would be a “strong presence” of Hartford and Springfield.

Discussions between the two companies began in spring this year, after a series of meetings over coffee and lunch between Thomas B. Wheeler, 59 years, Chief Executive of Massachusetts Mutual, and David E. Sams, 52 years, Chief Executive mutual in Connecticut. Mr Saturday joined Connecticut Mutual about two years, expenditure incurred after 27 years of a shareholder of a subsidiary, Providian Corporation Louisville, Ky. He says Wheeler was one of the first men he met, as he tried another meeting with the leaders of mutual societies.

While both companies have a better offer than many of his colleagues in controlling expenditure, the leaders said they must do more to control spending for insurance costs competitive with bids from banks, funds investment and investment firms. Analyses emphasize that a merger of the two most likely reductions in spending that $ 80 million annual savings resulting from the merger in 1991 by Phoenix on reciprocity and mutual understanding Home, Phoenix Home Mutual.

Savings amounting to $ 100 million, or larger loom on the two companies. Massachusetts Mutual, a $ 35 billion in assets and approximately $ 2.5 billion of capital, deserves only $ 93.1 million the previous year. Recognition Connecticut, with about $ 11.7 billion in assets and $ 910 million capital deserves only $ 6.7 million.

The good chemistry between the two executives was happy, because Massachusetts and Connecticut Mutual reciprocal long competition with a violence that comes from familiarity. The two companies have a customer base, largely upper middle class, and sell their products on their own distribution network of sales offices: 4000, Massachusetts Mutual and about 2000 in Connecticut each other.

“We are also as two companies,” said Sam “, with similar cultures and the same customers.