Magazine article American Banker

Conseco Inc. Acquires Leading Annuities Seller

Magazine article American Banker

Conseco Inc. Acquires Leading Annuities Seller

Article excerpt

Conseco Inc., a financial services firm that owns several life insurance companies, has acquired majority ownership of MDS/bankmark, a leading seller of annuities through banks.

Terms of the deal, which was announced last Thursday, were not disclosed.

Last year, Bankmark was the fifth-largest seller of annuities through banks and thrifts. It posted $621 million in premiums from sales of the tax-deferred investments.

Win-win Situation

The alliance gives Conseco a toehold in the booming business of marketing investment products through banks.

For Bankmark, the arrangement provides an added measure of financial strength. The move may make it easier for Bankmark to expand, and could be an edge in marketing the company's services to financial institutions.

"One of the activities Bankmark does - providing a sales force for very large banks - takes a lot of capital," said Kenneth Kehrer, president of a Princeton, N.J., consulting firm that bears his name.

Banks "often look beyond the immediate strength of a marketing company to see if it has a strong parent," Mr. Kehrer added.

Conseco, an $11.1 billion-asset company that has grown rapidly in recent years by acquiring and streamlining life insurance companies, has made progress in deleveraging itself, Mr. Kehrer said.

In 1987, the company's debt was 5.5 times its equity. Today, debt is just one-fifth of equity, said James W. Rosensteele, vice president for investor relations at the firm, which is based in Carmel, Ind. …

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