Provident Mutual will give Nationwide more variable life products and additional distribution channels, according to Andy Gold, senior financial analyst at AM Best in Oldwick, N.J. The acquisition will make Nationwide the nations third largest provider of variable life insurance. Provident Mutual also will add 768 financial consultants, 1,100 independent agents and affiliated broker-dealer 1717 Capital Management Co.
Mutual insurance companies opt to "go public" through demutualization so they can have access to the capital markets and acquire other companies with stock. In the demutualization process, ownership shifts from policyholders to shareholders, which can be one and the same.
The companies expect to close the deal in the second quarter of 2002. Each companys board of directors already has approved the transaction.
Nationwide Life Insurance Co., the major operating subsidiary of Nationwide Financial Services, is the nations sixth largest life insurer, based on premiums. Provident Mutual Life, based in Berwyn, Pa., specializes in retirement and investment products to the affluent and business markets.
This story was adapted from a story appearing on Financial Planning Interactive.