Life insurance giant poised for a growth spurt?

Rumours are swirling that Nasdaq-traded Assurant is in talks to sell its employee benefits division to Canada’s third largest life insurance company

Assurant’s stock popped 3% Tuesday on news the employee benefits provider is in takeover discussions with Sun Life who look to broaden their U.S. footprint with the acquisition.
The New York-based company has hired Barclays PLC to find buyers for the division that sells various types of insurance, including life insurance, through employers.
The addition of Assurant’s employee benefits business, which generated $1.1 billion in net earned premiums in 2014, would bring it together with two other recent Sun Life acquisitions in the U.S.: Prime Advisors and Bentall Kennedy Group.
The combination provides Sun Life with a more formidable business south of the border. While discussions are still ongoing those close to the sale suggest Sun Life could pay more than $1.2 billion for the division.
Perhaps with this acquisition the $38 million Sun Life spent in 2010 to acquire the naming rights for the Miami Dolphins football stadium will prove to be a good investment after all.
As recently as a week ago, Assurant’s stock was trading at a 52-week high but has since declined by 10% due to the global market correction hitting stocks. Sun Life, too, has seen a hit to its stock price sitting down more than 12% year-to-date.
The completion of this deal could be the tonic Sun Life’s shareholders are looking for although it appears that will come at a big price.