Annuities Providers Eyed As Takeover Targets

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

HEARD ON THE STREET: Insurers Prowl for Takeovers Of Annuities Sellers

• Summary: Since the UK's Aviva PLC announced its intention to buy AmerUs Group (AMH) for $2.9 billion earlier this month, a number of midsize insurers have been pegged as possible takeover targets. Conseco Inc. (CNO), Phoenix Cos. (PNX), Principal Financial Group (PFG) and Protective Life Corp. (PL) are attractive to larger insurers right now because they sell annuity products to aging baby boomers. Annuities, which generally offer payments over time in exchange for upfront investments, have tax advantages that have made them more popular recently. Industry consolidation is likely, given the heightened competition and need to lower costs.
• Comment on related stocks/ETFs: The runup in AmerUs stock was further fueled by a short squeeze. As mentioned in the article, the stocks of AmerUs Group peers have not moved much since that acquisition.