When Jackson National Life wraps up its acquisition of a California thrift this quarter, it will join the growing ranks of insurance companies with a foothold in thrift territory.
At the end of January, Lansing, Mich.-based Jackson National said it would acquire San Bernardino, Calif.-based First Federal Savings and Loan Association for $6.1 million.
While the acquisition of the $103 million-asset thrift marks the insurance company's first foray into banking, Jackson National is following a strategy already mapped out by other insurers seeking distribution through bank channels.
"I think the point is they are trying to bring themselves closer to the consumer and to have better control of distribution of products," said David Shapiro, president of Shapiro Consulting Group, Los Gatos, Calif. "Five years ago, insurance companies outsourced their distribution, and they found they could be held hostage by the distributor."
"More and more insurance companies are trying to bring this in-house and that is probably what is driving this" deal, Mr. Shapiro added.
Thomas J. Meyer, vice president and general counsel for Jackson National, would not comment on the specifics of the deal, other than to say the insurer is "looking at the range of alternatives available."
In September, Washington Mutual Inc., the nation's largest thrift, sold its life insurance subsidiary, WM Life Insurance Co., to Safeco Corp. of Redmond, Wash., for $140 million.
An important provision of the sale called for Washington Mutual to distribute Safeco's own annuities through the thrift's branch network in six western states and in Florida.
Jackson National is a significant presence in the insurance business, with $5 billion in sales last year. It is also a large underwriter of life insurance policies and annuities sold by banks. Bank sales of insurance products accounted for nearly one-fifth of Jackson's total sales last year.
"They are also looking at the California market and see it as a great opportunity," Mr. Shapiro said. Last year, 20% of Jackson National's insurance sales were in California, Mr. Meyer said.
Several insurers are seeking thrift charters from the Office of Thrift Supervision.
The OTS has granted thrift charters to three insurance companies: Reliastar Financial Corp., Principal Mutual Insurance Co., and Travelers Group.
