J.P. Morgan Chase & Co. has signed a definitive agreement to sell its life insurance and annuity underwriting business, or Chase Insurance, to Protective Life Corp. for approximately US$1.2 billion ($1.38 billion).
The sale is subject to normal regulatory approvals and is expected to close in the third quarter of 2006. J.P. Morgan Chase anticipates the transaction will have no material impact on earnings.
“With the merger of Chase and Bank One, we reviewed all our businesses and concluded that insurance underwriting does not have the same scale as our core banking businesses,” said Charles Scharf, CEO of Chase’s Retail Financial Services, which includes Chase Insurance. “We will continue to meet our customers’ insurance and annuity needs without underwriting the products.”
The sale includes both the heritage Chase insurance business and the life business that Bank One bought from Zurich Insurance in 2003. In 2005, Chase Insurance posted operating earnings of US$79 million on revenue of US$644 million. Chase will retain its debt-protection business and continue to distribute life and annuity products through its branch network.