Insurance Companies Join Industry Mashup to Get TARP Capital

November 20, 2008

Four large insurance companies are buzzing the Treasury Department’s honey pot, otherwise known as the Capital Purchase Program facilitated by the Troubled Asset Relief Program (TARP). Hartford Financial Services Group Inc., Genworth Financial Inc., Lincoln National Corp., and Aegon NV (via its US subsidiary, Transamerica) all cut deals to purchase thrift institutions with help from the OTS. The insurers concluded the fastest route to Treasury’s capital injection program was to become a thrift holding company. Buying a thrift was the obvious next step.

Does this mashup strategy make sense for insurers? Will these four deals be meaningful? What will be the long term impact on the thrift industry?

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