Prosperity Life to Buy Annuity Issuer for $1.9B

An insurer backed by Elliott Investment Management lost out on an effort to acquire one publicly traded U.S. annuity issuer in February, but now it has reached an agreement to acquire another.

The insurer, Prosperity Life Group, has agreed to pay about $1.9 billion in cash for National Western Life Group.

Nicholas von Moltke, the Prosperity Life CEO, said his company hopes to use National Western to expand its insurance business, but he gave no details about what the expansion might look like.

Ross Moody, National Western’s CEO, emphasized that his company’s board “conducted a thorough review of a range of strategic alternatives and possible business opportunities” before saying yes to Prosperity Life.

“The transaction provides clear and immediate value for our stockholders at an attractive premium,” Moody said.

What it means: Many publicly traded companies that back your clients’ life insurance policies and annuities face intense pressure from shareholders to sell to privately held insurers backed by big investment companies.

The players: The seller, National Western, is a Galveston, Texas-based company that was founded in 1956 by Robert Moody Sr., a member of the family that founded another Galveston-based insurer, American National, in 1905.

The company reported $42 million in net income for the first half of the year on $339 million in revenue.