By Cyril Tuohy
InsuranceNewsNet
Gerber Life would be a good fit for middle income life and
health insurer Torchmark, a company executive said recently.
Gerber Life targets young families on a limited budget
through a captive distribution channel.
“It does have controlled distribution, so I think at least
at this point in time we’d be interested, but to our knowledge no process has
started at this point in time,” said Torchmark co-chairman and CEO Gary Coleman
in a call with analysts.
Gerber's appeal had drawn interest from other corporate
giants as well.
Nestle’s board of directors looked at options for Gerber
Life, including a potential sale, according to news reports, as the
Switzerland-based food and beverage giant alters its product portfolio in
search of higher growth.
Gerber Life, a financially separate affiliate of the
Gerber Products Co., manufacturer of baby foods, sells term and whole life as
well as accident protection products.
The insurer had sales of $908 million last year.
Torchmark, based in McKinney, Texas, is a holding company
specializing in life and supplemental health insurance for the middle market
sold through distribution channels that include direct response, and exclusive
and independent agencies.
Torchmark could borrow more than $600 million to fund any
potential future acquisitions, Torchmark executives said.
Middle income market life insurers with captive
distribution selling similar products to Torchmark tend to generate strong cash
flows, Torchmark executives said.
Torchmark on Wednesday reported first-quarter net income
of $174.6 million.
On a per-share basis the company said it had net income of
$1.49.
The results exceeded Wall Street expectations. The average
estimate of six analysts surveyed by Zacks Investment Research was for earnings
of $1.46 per share.
The life and health insurance company posted revenue of
$1.07 billion in the period.
InsuranceNewsNet Senior Writer Cyril
Tuohy has covered the financial services industry for more than 15 years. Cyril
may be reached at cyril.tuohy@innfeedback.com.
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