Munich Re has announced an agreement under which its subsidiary, Munich Re New Ventures (MNRV) will acquire Group Health Group Holdings, Inc. (GroupHEALTH), one of Canada’s largest third-party group insurance administrators.
Following the closing of the transaction, GroupHEALTH will be fully owned by MRNV, which previously held only a 40% interest in the company.
The acquisition, subject to regulatory approval under the Competition Act (Canada), is seen to hold special promise for Munich Re group life clients looking for transformational enablers of growth.
“At the core of this acquisition is GroupHEALTH’s agile approach to addressing insurer growth and profitability,” said Marc Costantini, president & CEO, Corporate Development, Strategy & Digital Solutions at Munich Re North America Life and Health. “GroupHEALTH’s state-of-the-art sales and administration capabilities provide insurers efficient access to new markets, with an advanced customer interface.”
Following its establishment of MRNV four years ago, Munich Re identified two significant paths to growth:
- The development of a comprehensive direct-to-consumer platform, which ultimately was brought to market as Parachute Digital Solutions in 2017; and
- A strategic investment in the group insurance distribution and administration network, specifically in a TPA that could offer modern, flexible, and scalable technology to potentially bring continuous innovation and value to clients
“Munich Re’s planned acquisition of GroupHEALTH is in line with our innovation strategy,” said MRNV President and CEO Richard Letarte. “Our strategy is to build a structure that allows us to easily and quickly bring new ideas and products to market that will help our clients improve market reach, customer experiences and operations.”
Matt Houghton, GroupHEALTH’s CEO, and his executive team will continue to lead GroupHEALTH. No changes are expected to the TPA’s operating model, personnel, service model, or standards as a result of the transaction.
“MRNV has been a great partner in assisting insurers to deliver innovative products and services to meet our clients evolving needs to date,” Houghton said. “We could not be more excited about this next chapter working together to further enhance the value proposition for all stakeholders.”