Goldman Sachs Group Inc. announced an agreement Monday to buy its first insurance business.
It said it would pay about $275 million up-front, plus an estimated $70 million over three years for Allmerica Financial Corp.'s runoff variable life insurance and variable annuity business.
Michael Duvally, a spokesman at Goldman, said the company had previously sold insurance through its reinsurance subsidiary, Goldman Sachs Reinsurance, but this will be its first acquisition of this type. The acquired $11 billion book of business is to be assimilated into the reinsurance group, he said.
"We do see this as a platform for additional opportunities," he added.
Michael F. Buckley, a spokesman at Allmerica, said the deal will let the company focus on its property and casualty business.
Allmerica was a multiline insurance company that began offering life insurance and variable annuities in the early 1990s, he said, but a prolonged market downturn and exposure to market volatility led Allmerica to stop selling the products in 2002.
