Insurance Firms Will Join Forces

In the first alliance between a major U.S. insurer and a Latino-owned counterpart, Transamerica Occidental Life Insurance Co. and Gulf Atlantic Life Insurance Co. announced a $10-million joint venture Wednesday to market group life insurance products nationally.

The partners, both based in Los Angeles, said they will aim their sales efforts at government, union and private-sector entities that seek to do business with minority-owned firms.

Mayor Tom Bradley and Rebuild L.A. Co-chairman Peter V. Ueberroth attended the announcement at the Transamerica Center downtown. Bradley hailed the alliance as “an example of what ought to be done by many industries in Los Angeles.”

Gulf Atlantic Chairman Frank H. Cruz, a former TV news executive and reporter in Los Angeles, projected that the joint venture will bring in revenue of $20 million to $25 million in its first year.

Cruz, who led a group that bought Gulf Atlantic in 1991, said the deal will double the insurer’s capital and surplus from its current level of $5 million.

It will also more than double the firm’s capacity to write new policies, he said, as Transamerica Occidental--America’s eighth-largest life insurer--stands ready to infuse more capital.

Gulf Atlantic is hiring only three new employees initially, but may expand far beyond that if the venture succeeds, Cruz said.

David R. Carpenter, chairman of Transamerica Occidental, said his company expects to hire 25 to 30 people to support the venture.

Carpenter said Transamerica Occidental has a commitment to plow some of its profit into investments that benefit the community--a commitment that will grow in light of the joint venture. Low-income housing may be another investment target, he said.

Gulf Atlantic has already won contracts under minority business set-aside programs, but Cruz said his new partner’s national profile and sales force of independent agents will enable the joint venture to bid on much larger deals.