Transaction will add approximately 90,000 medical members
Readers are referred to the cautionary note regarding Forward-Looking
Information at the end of this release.
WINNIPEG, April 9, 2007 /CNW/ - Great-West Lifeco Inc. today announced that its U.S. subsidiary, Great-West Life & Annuity Insurance Company, has entered into an agreement to acquire an 80% majority interest in Benefit Management Corp., whose principal subsidiary is Allegiance Benefit Plan Management, Inc., a Montana-based third-party administrator of employee health plans. The existing majority shareholder will retain a 20% interest in Benefit Management Corp.
Lifeco expects the transaction will be accretive to earnings in 2007 and subsequent years.
The transaction will add nearly 90,000 medical members to Lifeco's Great-West Healthcare division. It includes Allegiance's physicians and hospitals network, as well as Benefit Management Corp.'s other subsidiaries. These include a new company that was created to sell fully-insured health plans in Montana, and a company that provides medical management services, primarily in Montana.
Allegiance is the leading medical administrator for large employer groups in Montana and has the second largest overall market share among health plans in the state.
"The transaction includes an attractive provider network, which will further enhance Great-West Healthcare's strong provider network position within Montana and its surrounding states. This is also an excellent growth opportunity within the fully insured marketplace," said Raymond L. McFeetors, President and Chief Executive Officer of Great-West Lifeco Inc.
The Allegiance companies will retain their names and operate as subsidiaries of Great-West Life & Annuity, with management and service staff remaining in place.
"We look forward to working with Allegiance to continue improving on what is already a strong position in Montana, and expanding the products and solutions we bring to employers throughout the state," said Rick Rivers, Executive Vice-President, Great-West Healthcare.
The acquisition of Benefit Management Corp.'s insurance company subsidiaries is subject to regulatory approval. The transaction is expected to close in the second quarter of 2007.
Great-West Healthcare, a division of Great-West Life & Annuity, is a national employee benefits provider with expertise in self-funding and health care management solutions. Nationally, the division operates a health care network that includes 4,275 hospitals and 578,000 providers and provides health care services to 2.2 million people.
Great-West Life & Annuity Insurance Company, headquartered in metro-Denver, serves its customers through a full range of health care plans, life and disability insurance, annuities, and retirement savings products and services. It is an indirect, wholly owned subsidiary of Great-West Lifeco Inc. Great-West Life & Annuity Insurance Company is not licensed to do business in New York. Products are sold in New York by its subsidiary, First Great-West Life & Annuity Insurance Company, White Plains, N.Y.
Great-West Lifeco Inc. (TSX:GWO) is a financial services holding company with interests in the life insurance, health insurance, retirement savings, and reinsurance businesses. Lifeco has operations in Canada, the United States and Europe through The Great-West Life Assurance Company, Great-West Life & Annuity Insurance Company, London Life Insurance Company and The Canada Life Assurance Company. Lifeco and its companies have more than $210 billion in assets under administration. Great-West Lifeco is a member of the Power Financial Corporation group of companies.
Caution Regarding Forward-Looking Information
This release contains forward-looking statements about the Company, including its business operations, strategy and expected financial performance and condition. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates" or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future financial performance (including revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future Company action, including statements made in this release by the Company in regards to the expected closing of the transaction with Benefit Management Corp., and the expectation that the transaction will be accretive to earnings in 2007 and subsequent years, are also forward-looking statements. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company, economic factors and the insurance industry generally. They are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward-looking statements made by the Company due to, but not limited to, important factors such as sales levels, premium income, fee income, expense levels, mortality experience, morbidity experience, policy lapse rates and taxes, as well as general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, catastrophic events, and the Company's ability to complete strategic transactions and integrate acquisitions. The reader is cautioned that the foregoing list of important factors is not exhaustive, and there may be other factors listed in other filings with securities regulators, including factors set out under "Risk Management and Control Practices" in the Company's Management Discussion and Analysis, which, along with other filings, is available for review at www.sedar.com. The reader is also cautioned to consider these and other factors carefully and to not place undue reliance on forward-looking statements. Other than as specifically required by applicable law, the Company has no intention to update any forward-looking statements whether as a result of new information, future events or otherwise.