Insurance giant Assurant has announced it will exit the health insurance market by the end of 2016, and it will "begin to wind down its major medical operations" immediately.
Assurant began exploring the sale of its employee benefits and health insurance business in April. At that time, the company said it was looking to sell its health insurance division to narrow its focus and generate higher returns. Even without a buyer, the insurer has decided to still leave the insurance market.
"Our decision to exit the health insurance market enables us to sharpen our focus on the housing and lifestyle markets, where we see the greatest opportunity for profitable growth," said Assurant President and CEO Alan B. Colberg.
Assurant estimates exiting the health insurance market will cost the company between $175 million and $250 million. The costs include premium deficiency reserves, severance and retention, contract and lease terminations, and other transaction costs.
Assurant also announced it will sell it supplemental and small group self-funded product lines and certain other assets including a proprietary small group sales channel to National General Holding Corp., a specialty personal lines insurance holding company. That transaction is subject to regulatory approval.