Ares expands insurance platform with Aspida launch and Michigan M&A

Global alternative asset manager Ares Management Corporation (Ares) will expand its existing insurance platform, Ares Insurance Solutions, through the launch of Aspida Financial (Aspida) as an indirect subsidiary of Ares.

As part of the expansion plans, Aspida has agreed the $75 million cash purchase of Michigan-based Pavonia Life Insurance Company (Pavonia) with about $1.1 billion assets and around $76 million statutory capital and surplus as of March 31, 2019.

The Michigan firm offers life insurance, annuities and reinsurance products and services and is currently licensed in 49 states and has operated in multi-channel distribution networks with relationships covering more than 4,700 agents and subgroups.

The acquisition deal is expected to close before the end of 2019, subject to regulatory approval and other closing conditions, then the firm will operate under the Aspida brand.

Ares’s strategy for Aspida is to capitalise on retirement market trends and increasing demand for insurance products. It said Aspida will pursue a “three-pronged growth strategy of underwriting new business, executing reinsurance transactions and pursuing opportunistic acquisitions”.

Michael Arougheti, chief executive and president of Ares, said: “The launch of Aspida Financial and its plan for growth is the next evolution of Ares’ existing insurance platform, Ares Insurance Solutions, which now has over 100 insurance investors with $15 billion in assets invested across our products."

David Reilly, partner and head of Ares Insurance Solutions, added: “The expansion of our insurance platform reflects our fundamental belief in the long-term growth prospects of protection, savings and retirement income products for individuals and institutions.

“We believe that success in this market is directly tied to prudent and differentiated asset management and we look forward to using our experienced team to drive value. We see tremendous growth potential for Aspida in primary fixed and fixed indexed annuity distribution, opportunistic reinsurance transactions and inorganic growth via acquisitions in the insurance sector.”

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