Great-West Lifeco Inc., Canada's second-largest insurance company, is investigating the sale of a collection of insurance contacts that could raise $ 2 billion, three people familiar with the Wednesday issue.
The deal would be one of the biggest divestments of such insurance books in recent times. Insurance companies have written off such blocks, consisting of policies in areas where no new company is subscribed, to free up cash to invest in profitable parts of their activities.
The sources have been asked not to be identified because the issue is confidential. A spokesperson for Greater West said: "as a matter of policy, we do not respond to speculation or rumors".
Goldman Sachs Group Inc. regulates the sales process, according to the sources. A Goldman spokesman declined to comment.
The portfolio of run-off insurance activities marketed by Great-West includes structured settlements, paid annuities and life insurance policies for companies or banks (COLI / BOLI), according to the sources. Some group benefits policies are also part of the sale, one of them said.
The management of the Winnipeg-based insurer held meetings in mid-August with potential bidders who, according to one source, had passed the first bidding round.
Among the parties that have shown interest in the policy are other insurance companies and financial companies, said a second source.
Private equity firms and specialized investment firms such as Athens Holding and Wilton Re are important customers of retail insurance policies because they believe they can waste the profits of managing such policies by saving costs.
Today's largest such transactions include the sale of Hartford Financial Services Group's life insurance and annuities handling business to a group of investors, and the $ 14 billion deal from Wilton Re regarding the pay-out annuities and COLI from Aegon NV / BOLI companies in the United States.
Like Canada, Great-West Lifeco and its subsidiaries have offices in the United States and Europe and have more than $ 1.4 trillion consolidated assets under management on June 30, according to public documents from majority shareholder Power Financial Corp.