Broker World

Ohio National Mutual Holdings, Inc. (“ONMH”) and its wholly owned subsidiary Ohio National Financial Services, Inc. (collectively, “Ohio National” or “the Company”), a leading provider of financial services, today announced that the ONMH’s Board of Directors has unanimously approved a strategic transaction with Constellation Insurance Holdings, Inc. (“Constellation”). This includes the conversion of ONMH 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 (“Ontario Teachers’”), two of the world’s largest, premier, long-term institutional investors.

This transaction will strengthen the Company’s financial position, enhance its market position, will facilitate future growth and will augment the capital strength of Ohio National and its insurance company subsidiaries.

The sponsored demutualization, which is subject to various regulatory approvals, including the approval of the Ohio Director of Insurance, and the approval of ONMH’s members, provides for Constellation to fund cash payments or policy benefits, in the aggregate amount of $500 million, to be paid or provided to eligible members in exchange for the extinguishment of their membership interests in ONMH. Additionally, as part of the transaction, Constellation and its investors are providing a commitment to infuse an additional $500 million of capital over a four-year time period following the closing of the transaction, further strengthening Ohio National’s capital position and its ability to fulfill its obligations, as well as to invest in the future of the business.

Barbara A. Turner, president and CEO of Ohio National, stated, “Over the past several years, we have been taking deliberate actions to ensure that our business is well positioned for the future and that our policyholders and associates are part of a stable and growing company. In the midst of a challenging economic environment, historically low-interest rates, increased regulatory costs and pressure for the entire industry, Ohio National is taking this next logical step to fortify the business with additional capital and a more flexible capital structure. This will further unlock our opportunities and enable us to mitigate risk while investing in the future growth of the business.”

Turner continued, “For our associates, network of financial professionals, policyholders and the community, the solidified capital structure and increased flexibility afforded by this transaction enhance the inherent value of our Company. It also expands our ability to seize growth opportunities and respond to varying market conditions, resulting in a stronger, more responsive and innovative company that is well positioned for the future.”

Anurag Chandra, founder, chairman and CEO of Constellation, added, “Ohio National is an impressive company with tremendous potential. We believe this strategic transaction can have a transformative impact on Ohio National’s strategic and financial position, capital access, and financial strength ratings which can help unlock the Company’s latent potential. We look forward to partnering with Barbara and her management team, as well as with Agam, to help accelerate the Company’s organic and inorganic growth trajectory and build Ohio National into a market leader in the life insurance and annuity industries.”

Agam Capital Management, LLC (“Agam”), an insurance solutions provider and strategic partner to Constellation, brings substantial variable annuity risk management and insurance industry expertise, which significantly strengthens Ohio National’s ability to capitalize on inorganic growth opportunities.

Agam’s co-founders, Chak Raghunathan and Avi Katz, said, “This strategic transaction will position Ohio National to capitalize on growth opportunities in the life insurance and annuity industries. We expect to leverage Agam’s industry leading asset liability management and enterprise risk management expertise to empower strategic decision making as the Company looks toward its next phase of growth.”

Upon closing of the transaction, Ohio National will maintain its management team and brand, and will continue to be headquartered in Cincinnati, Ohio.

The transaction is subject to customary conditions, including regulatory approvals and ONMH’s member approval. It is anticipated that the transaction will close in the second half of 2021.

Sidley Austin LLP is serving as legal counsel to Ohio National. Hogan Lovells US LLP is serving as counsel to the Directors of Ohio National. Keefe, Bruyette & Woods, A Stifel Company, is serving as financial advisor to Ohio National and its Board of Directors. Debevoise & Plimpton LLP is serving as legal counsel to Constellation.

Since 1909, Ohio National has been committed to helping individuals, families and businesses protect what matters most. Through our network of financial professionals across 49 states (all except New York), the District of Columbia and Puerto Rico and through affiliated operations in South America, we provide insurance products that help our policyholders achieve financial security and independence. As of December 31, 2020, its affiliated companies had $41.2 billion total assets under management. Products are issued by The Ohio National Life Insurance Company and Ohio National Life Assurance Corporation. Recognized as a Leader in Gender Equity by Queen City Certified.

Constellation is an insurance holding company targeting acquisitions of life and P&C insurers based in North America, with the strategic intent of building a substantial, highly rated and conservatively managed multi-line insurance business backed by long-term institutional capital. Constellation’s founding investors and equal partners, CDPQ and Ontario Teachers’ are two of the largest long-term institutional investors in North America, managing a total of over CA$500 billion in net assets, including over CA$80 billion in private capital investments.

Caisse de dépôt et placement du Québec (CDPQ), invests constructively to generate sustainable returns over the long term. As a global investment group managing funds for public retirement and insurance plans, they work alongside their partners to build enterprises that drive performance and progress. They are active in the major financial markets, private equity, infrastructure, real estate and private debt. As at December 31, 2020, CDPQ’s net assets total CA$365.5 billion. For more information, visit cdpq.com, follow them on Twitter or consult their Facebook or LinkedIn pages.

The Ontario Teachers’ Pension Plan Board (Ontario Teachers’) is the administrator of Canada’s largest single-profession pension plan, with CA$204.7 billion in net assets (all figures at June 30, 2020 unless noted). It holds a diverse global portfolio of assets, approximately 80 percent of which is managed in-house, and has earned an annual total-fund net return of 9.5 percent since the plan’s founding in 1990. Ontario Teachers’ is an independent organization headquartered in Toronto. Its Asia-Pacific regional offices are in Hong Kong and Singapore, and its Europe, Middle East and Africa region office is in London. The defined-benefit plan, which is fully funded as of January 1, 2020, invests and administers the pensions of the province of Ontario’s 329,000 active and retired teachers. For more information, visit otpp.com and follow us on Twitter @OtppInfo.

Agam was founded in 2016 by Avi Katz and Chak Raghunathan, senior executives at Apollo and Aflac, with deep backgrounds in insurance, investments and risk management. Agam is a strategic insurance solutions provider with a differentiated proprietary Asset-Liability Model (“pALM”) powering its analytical process. pALM enables and empowers decision makers by providing a clear and accurate analysis of their balance sheet efficiency and capital usage profile. Agam has a deep team of multi-disciplinary specialists with offices in Teaneck, NJ and Mumbai, India.

Foresters Financial™, the fraternal life insurer quietly disrupting financial services, today announced it has worked with illustrate inc, to launch Foresters Mobile Quote, a secure life insurance quoting app. It is available to Foresters over 75,000 producers across the U.S. through the Apple App Store^® and the Google Play Store.

A powerful sales tool, Foresters Mobile Quote utilizes illustrate inc’s proprietary OPUS Mobile solution, for the convenience and familiarity of a downloadable app, with extensive functionality and features. Customized to Foresters requirements, including multi-channel distribution, Foresters Mobile Quote enables producers to generate quotes across the extensive term, whole life, and universal life product lines. In addition, it is a resource and communication hub, providing access to marketing information, product specifications, push notifications, and other resources. The solution is configurable and highly secure, with built in integration to other Foresters applications.

Matt Berman, president of Foresters Financial’s U.S. business, said, “Foresters is a nearly 150-year-old member-based organization dedicated to the well-being of everyday families, which is quietly disrupting life insurance. Foresters Mobile Quote is the lates evidence of this, as we continue to deliver turnkey-decisioned product offerings supported by state-of-the-art mobile tools.”

Added President of illustrate inc Lyndon Edwards, “OPUS Mobile is targeted towards individual life insurance carriers and delivers a mobile solution that goes beyond the next level. In addition to the core powerful calculation and presentation capabilities, it has been designed to include features and functionality to exponentially expand its value to the user and the sales process. We are proud to continue our long-term partnership with Foresters and the launch of Foresters Mobile Quote is a testament to the level of skill, collaboration and excitement from both of our teams.”

Life Insurance with a Larger Purpose
Bringing a better, new normal to everyday North American families, Foresters offers a suite of unique member benefits, redefining the conventional life insurance model.

Foresters member benefits¹ include opportunities for scholarships, orphan benefits, community volunteer grants, online wills and other legal documents, Lifelong Learning, and more.

Foresters Financial is quietly transforming the life insurance industry across the U.S. and Canada by enriching the lives, communities, and overall well-being of its members. Agents and members alike appreciate the turnkey-decisioned product offerings and end-to-end digitized processes that make it easy to get life insurance without traditional medical exams. State-of-the-art mobile tools help agents deliver tailored plans to prospective and current members. Unique to fraternal life insurers, Foresters offers a suite of member benefits, redefining the conventional life insurance model and bringing improved financial security and overall wellness to everyday North American families. Foresters recently acquired Canada Protection Plan to bolster its leadership in distribution across Canada. Foresters Financial includes The Independent Order of Foresters, the oldest non-denominational fraternal benefit society. For 20 straight years, The Independent Order of Foresters has received an “A” (Excellent) rating from A.M. Best.²

For more information please visit www.foresters.com.

Established in 1989, with offices in Toronto and Kansas City, illustrate inc has been building and delivering powerful and innovative web-based POS software solutions—including quoting, illustrations, and eApps—for the North American life insurance industry, enabling carriers of any size to embark on, extend, or enhance their digital transformation.

To learn more about illustrate inc’s OPUS Mobile solution, visit illustrateinc.com/opus mobile.

™Foresters Financial, Foresters, and Helping Is Who We Are are trade names and/or trademarks of The Independent Order of Foresters (a fraternal benefit society, 789 Don Mills Rd, Toronto, Canada M3C 1T9) and its subsidiaries.

1. Description of member benefits that you may receive assumes you are a Foresters member. Foresters Financial member benefits are non-contractual, subject to benefit specific eligibility requirements, definitions and limitations and may be changed or cancelled without notice or no longer available.
2. The A.M. Best ratings assigned on August 5, 2020, reflect overall strength and claims-paying ability of The Independent Order of Foresters (IOF). An “A” (Excellent) rating is assigned to companies that have a strong ability to meet their ongoing obligations to policyholders and have, on balance, excellent balance sheet strength, operating performance and business profile when compared to the standards established by A.M. Best Company. A.M. Best assigns ratings from A++ to F, A++ and A+ being superior ratings and A and A- being excellent ratings. In assigning the ratings for IOF, A.M. Best stated that the rating outlook is “stable”, which means it is unlikely to change in the near future. See ambest.com for latest ratings.

Despite the efforts of long term care providers to absorb many of the costs associated with COVID-19 as they put their own lives at risk to care for their clients, long term care costs increased substantially this year, particularly for assisted living facilities and in-home care, according to Genworth’s 17th annual Cost of Care Survey.

Over the course of a single year, the cost of care increased as follows:

• Assisted living facility rates increased by 6.15 percent to an annual national median cost of $51,600 per year.
• Homemaker services, which includes assistance with “hands-off” tasks such as cooking, cleaning and running errands, has increased 4.44 percent to an annual median cost of $53,768,1 followed closely by the cost of a home health aide, which includes “hands-on” personal assistance with activities such as bathing, dressing and eating, which has increased 4.35 percent to an annual median cost of $54,912.2
• The national median cost of a semi-private room in a skilled nursing facility rose to $93,075, an increase of 3.24 percent, while the cost of a private room in a nursing home increased 3.57 percent to $105,850.

Why Rates Are On the Rise
In a supplemental study to better understand why costs are rising, Genworth researchers conducted follow-up online discussions with owners and senior administrators of 79 long term care providers across the country. Participants spoke with pride about the selflessness and resiliency of their staffs as they stepped up to meet the challenge of caring for their clients amid the risks posed by COVID-19, and they outlined the market dynamics that are forcing them to increase the cost of care they are providing under these extraordinary circumstances.

“They told us that the same factors responsible for the continuing increase in long term care costs in recent years—a shortage of workers in the face of increasing demand for care, higher mandated minimum wages, higher recruiting and retention costs, and an increase in the cost of doing business, including regulatory, licensing and employee certification costs—were made even worse by the pandemic,” said Gordon Saunders, senior brand marketing manager at Genworth who manages the Cost of Care Survey.

“Providers have been competing with higher-paying, less-demanding jobs for years, but with COVID-19, they told us it has become much more difficult to recruit and retain care professionals because of factors such as concerns about exposure to COVID-19 and parents needing to stay home with school-age children,” Saunders said.

As a result, providers have had to raise wages—in some cases offering hazard pay of up to 50 percent more for workers caring for COVID-19-sickened clients—and increase spending for training on new safety procedures, testing, purchase of personal protective equipment (PPE) and cleaning supplies and benefits, such as free child care to attract and retain staff. Although many providers contacted by Genworth said they were trying to absorb these new costs, more than half (62 percent) predicted that they would eventually be forced to raise rates in the next six months with 43 percent saying those increases would top five percent or more.

Bright Spots For Home Care
In subsequent, separate conversations with CEOs of two national home care companies, the executives acknowledged that while COVID-19 has created serious challenges for the industry, the pandemic has also produced a few bright spots, namely the recognition that home care is an equally valued part of the healthcare delivery system and the acceleration of technology that has made their services better and safer.

“The pandemic has shined a bright spotlight on the value of home care,” said Jeff Huber, CEO of Home Instead Senior Care, based in Omaha. “We can increase the capacity of the healthcare delivery system. The hospital of the future looks a lot like your living room. As a part of a value-based care package, we can reduce costs, admissions, readmissions, and overall usage of the healthcare system. And, we can keep clients safer and improve the quality of life for the whole family by keeping sons and daughters in the workforce while we care for their parents.”

He said the pandemic has also accelerated adoption of technology that allows his company to onboard and train new caregivers and continue to train them remotely. Home Instead Senior Care also is bringing digital capabilities into the home that connect care professionals with their clients and families, which effectively extends the care team and enables the company to quickly attend to any issues that arise in the home.

Seth Sternberg, CEO of Honor, one of the largest owned and operated home care companies in the U.S., has seen average hours of home care increase from 35 to 45 hours per week among his clients during the pandemic, driven by more acute needs, fear of contracting COVID-19 in a communal care setting, and everyday tasks becoming riskier than they used to be, such as shopping for groceries.

He said his company has invested in new infection prevention protocols, as well as technology that allows it to quickly backfill care professionals who may not be able to come to work, mitigating the challenges of reduced availability of care professionals. Honor has built out additional COVID-19 response programs, including investment in PPE, training and additional paid time off for caregivers.

“The COVID-19 pandemic has underscored the need for technology to help enhance safety and reliability in home care,” he said. “This year we added new protocols into our technology platform specifically to meet those needs. Some of the additional features include pre- and post-visit wellness checks, replacement staffing tools and contact tracing. These enhancements added significant upfront costs, but they are worth doing because they have enabled more older adults to live independently at home–and will keep people safer well beyond the end of the pandemic.”

Genworth’s Cost of Care Planning Resources
“COVID-19 has also underscored the need to plan ahead for long term care, considering both where we want to receive care as well as how we will pay for it,” Saunders said. “Our purpose as a company is to help people prepare for the challenges of growing older so that they can continue to live their lives on their own terms. We provide our annual Cost of Care Survey and award-winning interactive website to arm individuals and their families with the education and tools that can empower them to make those important plans well before they need it.”

In addition to the Cost of Care calculator, Genworth’s website contains long term care planning tools, practical information on topics such as understanding Medicare and Medicaid, conversation starters, impairment simulations, options for financing long term care, and videos of real families sharing their long term care stories.

Genworth’s annual Cost of Care Survey, one of the most comprehensive studies of its kind, contacted nearly 60,000 long term care providers nationwide to complete almost 15,000 surveys for nursing homes, assisted living facilities, adult day health facilities and home care providers during July and August, 2020. The survey includes 435 regions based on the Metropolitan Statistical Areas, defined by the Office of Management and Budget. CareScout®, part of the Genworth Financial family of companies, has conducted the survey since 2004. Located in Waltham, Massachusetts, CareScout has specialized in helping families find long term care providers nationwide since 1997.

To explore Cost of Care data by city, state or zip code, find trend charts and access lists of states ranked in order of care costs, visit genworth.com/costofcare.

Genworth Financial, Inc. (NYSE: GNW) is a Fortune 500 insurance holding company committed to helping families achieve the dream of homeownership and address the financial challenges of aging through its leadership positions in mortgage insurance and long term care insurance. Headquartered in Richmond, Virginia, Genworth traces its roots back to 1871 and became a public company in 2004. For more information, visit genworth.com.

From time to time, Genworth releases important information via postings on its corporate website. Accordingly, investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings. Enrollment information is found under the “Investors” section of genworth.com. From time to time, Genworth’s publicly traded subsidiary, Genworth Mortgage Insurance Australia Limited, separately releases financial and other information about their operations. This information can be found at http://www.genworth.com.au.

1. Based on 44 hours per week for 52 weeks.
2. Based on 44 hours per week for 52 weeks.