CUNA Mutual Group has agreed to purchase Assurant’s prearranged funeral insurance and final expense business, Global Preneed, in the US and Canada along with related legal entities and assets in a cash deal valued at around $1.3bn.

Through the deal, CUNA aims to better serve the growing middle market. The business to be acquired caters to over two million consumers.

Prearranged funeral insurance, also called preneed, as well as senior lifestyle protection solutions aim to help consumers and their families for planning for the later chapters of life.

Global Preneed will retain its operational independence after takeover, with existing Preneed staff continuing to operate out of their existing locations.  It will have limited integration into CUNA Mutual Group’s other business lines.

Assurant president and CEO Alan Colberg calls the deal a “successful outcome” for employees, clients, partners, policyholders and shareholders.

“The sale of Global Preneed is another important milestone in our transformation of Assurant, sharpening our focus on our market-leading lifestyle and housing businesses, and better positioning our company to capitalise on future growth opportunities emerging around the connected consumer,” Colberg stated.

The deal is anticipated to offer around $1.2bn of net proceeds at completion, 75% of which Assurant plans to return to shareholders through share buy-backs within one year of closing, pending clearance.

This adds to $470m it plans to return through share repurchases and common stock dividends under its existing three-year, $1.35bn capital return plan. This is slated to conclude by this year-end.

The firm will invest the balance proceeds mainly in its connected world businesses, including Connected Living, Global Automotive and Multifamily Housing.

The deal awaits regulatory nod, with completion expected by the end of the third quarter of this year.

The two parties have also agreed on a multiyear extension of the 23-year automobile mechanical repair coverage partnership.

CUNA president and CEO Robert Trunzo said: “This acquisition allows us to expand the ways we reach middle market consumers, helping more people make financial decisions that work for them and their situation.

“We will continue to build, buy and create partnerships to bring additional insurance, investment, and technology solutions into our portfolio to support our strategic priorities, protect even more consumers and augment our resources and financial strength.”

Last September, CUNA became the lead investor in a $10.5m funding round for US-based independent insurance agency Coverance Insurance Solutions.