Finance, Preneed

Great Western Insurance Company to be Acquired

Foundation Partners why I partnered

In an article from the Think Advisor which you can read here it was reported that Ogden, Utah based pre-need life insurer Great Western Life Insurance is going to be acquired by American Republic Insurance of Des Moines, Iowa.

Great Western is a privately held life insurance company, specializing in Pre-Need funeral insurance started by a funeral industry family in 1983 – the founder, John Lindquist, still serves as CEO and Chairman of the Board.  It is reported that the company has 121 employees and is licensed to do business in 46 states and the District of Columbia.  It is believed that the company does about $200 million in annual premium billings and has assets of about $1.2 billion.

American Republic Insurance is an arm of American Enterprise Mutual Holding Company.  That conglomerate is known to provide insurance needs in the life insurance, hospital insurance, indemnity insurance, and other lines of insurance.  According to their CEO Tom Swank, “The Great Western deal will make American Enterprise Group more diversified and better positioned for the future.”

Funeral Director Daily take:  From what we have seen, Great Western has always been a well run company and, because of their heritage, a sense of pride in the funeral industry.  Our funeral home has served many families pre-financed by Great Western.

We don’t, however, see this sale as a surprise.  As we have said many times nothing is changing the death care industry more than the high percentage of cremations – and in particular direct cremations.  That fact is causing revenue per case to drop in at-need calls and it makes sense that the revenues in pre-arrangement sales per case will drop also.  That would lead to, in a commission based industry, more policies that need to be written for agents to make the same compensation.

It is our opinion that as this trend continues pre-need insurance companies will be no different than individual funeral homes and casket companies.  They will consolidate to be able to better handle fixed operating costs in their respective home offices.  The Great Western sale may just be one of the first to happen.

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