Guggenheim scoops up insurer to build fixed indexed annuities

Gives firm 10th-place market share, wider distribution

By Darla Mercado

Oct 7, 2011 @ 3:11 pm (Updated 3:55 pm) EST

Guggenheim Partners LLC has bought EquiTrust Life Insurance Co., ramping up its presence in the fixed-indexed-annuity realm.

The deal was announced in a filing with the Securities and Exchange Commission today. Guggenheim bought the insurer from FBL Financial Group Inc. for a preliminary purchase price of $440 million in cash. The firm expects the transaction to close around Dec. 30.

Guggenheim will be stepping up its profile in the fixed-indexed-annuity market through the purchase. It currently owns Security Benefit Life Insurance Co., which sits at 12th place among indexed-annuity sellers, according to AnnuitySpecs.com's Indexed Sales & Market Report for the second quarter of this year.

Meanwhile, EquiTrust sits at 15th place, and a combination of the two will give Guggenheim about a 4.16% share of the indexed-annuity marketplace, equal to being the No. 10 player in the industry.

The new arrangement will give Guggenheim a wider breadth of distribution partners overall.

Security Benefit currently offers an exclusive indexed annuity via an arrangement with field marketing organization Advisors Excel and is a fairly new entrant to that product marketplace. Meanwhile, EquiTrust has been around since 1997 and has a variety of other field marketing organizations that sell its indexed annuities, said Sheryl Moore, president of AnnuitySpecs.

Other indexed-annuity experts noted that from a distribution point of view, EquiTrust's business might be more compatible within Guggenheim's structure compared with where it had fit with FBL, which also sells property/casualty insurance and life coverage.

“FBL's customer base is made of people in the rural markets; it's a very stable product line,” said Judith Alexander, director of sales and marketing at Beacon. “In the independent-agent channel, things are far more competitive. It might have been a better fit with Guggenheim.”

"We're narrowing our focus for FBL more on the Farm Bureau niche," said Nancy Doll, spokeswoman for FBL. The Farm Bureau niche largely offers life insurance products through a career agent force, while EquiTrust had sold its products through independent agents.

Guggenheim spokeman Jeffrey Kelley did not immediately return a call for.

  @IN Wire

Apr 23 03:22PM
RT @BDNEWSGUY: Great data by the team here at IN via @newsfromIN The 10 fastest-growing independent broker-dealers http://t.co/LKLGqewpcZ
Apr 23 03:20PM
The 'old, pale male' problem: InvestmentNews panel digs into ways the advisory business can break its image http://t.co/Qha7XvhxS4

Most Watched Video

7:12The 2 biggest factors driving growth in active ETFs

Ugo W. Egbunike Dir. Of Business Development, ETF.com Greg Crawford Deputy Editor, InvestmentNews

Video Spotlight
1:47People are Living Longer. Good News or Bad News?

Sponsored by Oppenheimer Funds Inc.