Great-West Lifeco Inc. is selling its U.S. individual life insurance and annuity business to a subsidiary of Protective Life Corp. (Photo by THE CANADIAN PRESS)

Great-West selling U.S. individual life insurance and annuity business for $1.6B

WINNIPEG — Great-West Lifeco Inc. has signed a deal to sell its U.S. individual life insurance and annuity business to a subsidiary of Protective Life Corp. for $1.6 billion, which is below the unit’s value on GWL’s books.

Great-West chief executive Paul Mahon says the deal will allow the company to focus on the retirement and asset management markets in the United States.

The business that Protective Life is acquiring includes bank-owned and corporate-owned life insurance, single premium life insurance, individual annuities, and closed block life insurance and annuities.

Great-West says the business contributed about $120 million to its net earnings for the first three quarters of 2018.

But GWL expects to recognize a closing a book value loss of about $93 million and transaction costs of $76 million.

The transaction is expected to close in the first half of this year, subject to regulatory and customary closing conditions.

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