Skandia Insurance Co. is poised to back out of the American market by selling American Skandia, its U.S. variable annuity and mutual fund arm. Jefferson Pilot Financial of Omaha, Neb., is said to be paying $600 million for the Shelton, Conn., insurance company, which, with $23.1 billion in assets, is the 10th largest annuity company in the U.S.
Why would a company with a decidedly global stance divest itself of its American presence?
Skandias American executives believe the parent company has been impeding the firms growth, sources said. In addition, there has allegedly been tension over the U.S. firms exorbitant, multi-million-dollar marketing costs. Skandias parent company recently decided to pull the plug on funding American Skandias marketing expenses, and as a result, the U.S. firm had to take out bank loans to cover those costs, sources said.
Patti Abram, chief marketing officer for American Skandia, said that Skandia has continued to support the companys marketing efforts and has supplied most of the capital to fund new business.