Constellation acquires Columbian Financial Group

Constellation Insurance Holdings has announced plans to acquire Columbian Mutual Life Insurance Company in a deal that will involve the conversion of Columbian to a stock company and the issuance of all of its newly issued stock to Constellation pursuant to a sponsored demutualization.

Constellation, an insurance holding company, is backed by Caisse de dépôt et placement du Québec (CDPQ) and Ontario Teachers’ Pension Plan Board two of North America’s largest institutional investors.

Established in 1882, Columbian offers life insurance protection to consumers in all 50 US states. Its affiliated companies have $1.8 billion in assets and over 750,000 policyholders.

The transaction provides for Constellation to invest up to $100 million to fund cash payments to eligible policyholders and to strengthen the capitalization and financial ratings of Columbian.

“Columbian is an impressive company with significant growth potential. We look forward to partnering with Michael and the management team to significantly accelerate Columbian’s organic and inorganic growth trajectory and firmly position the company as a leader in targeted life insurance market segments,” said Anurag Chandra, Constellation’s founder, Chairman Chief Executive Officer.

“This transaction and the recently announced Ohio National demutualization demonstrate the compelling value proposition Constellation offers to life and P&C insurers who are looking for access to long-term growth capital, enhanced ratings and scale efficiencies, while preserving their independent identity, brand, operations and culture.”

Michael Fosbury, President and CEO at Columbian, also commented: “Constellation’s investment is transformative from a strategic and financial perspective and provides access to long-term capital, improved balance sheet strength, stronger financial ratings and the ability to continue to invest in technology and automation.”

“This investment from Constellation will allow Columbian to build on its longstanding strengths, including our brand, our market position in the life insurance segment, our distribution partnerships, and our culture of customer service, to capitalize on the significant growth opportunities in providing affordable protection products for the senior market. All stakeholders will benefit as this transaction positions the company for long-term success.”

The transaction is anticipated to close in the first half of 2022, following which Columbian will maintain its brand and leadership team, with the company’s offices remaining in Binghamton and Syracuse.

Eversheds Sutherland is serving as legal counsel to Columbian and its Board of Directors. Keefe, Bruyette & Woods (KBW), A Stifel Company is serving as financial advisor to Columbian and its Board of Directors. Milliman is serving as actuarial services provider to Columbian. Debevoise & Plimpton LLP is serving as legal counsel to Constellation.

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