Kaufman and Broad saw its life insurance operations as a synergistic partner to its building business, which was highly susceptible to the vicissitudes of the financial markets. Three months later, Kaufman and Broad completed its acquisition of the company, bringing the price to $23 million. In February 1978, the company purchased 79 percent of the Coastal States Corporation, which owned the Coastal States Life Insurance Company, based in Atlanta, for $17.9 million. Sun abandoned its offer to take over Colonial, which specialized in policies for low-income families, after the company's six-month profit dropped from $1.8 million to $277,000, indicating that the business was in a severe slump.ĭespite this setback, however, Kaufman and Broad persevered in its attempt to diversify more fully into the financial services industry in the late 1970s. In August of that year, as Kaufman and Broad's building operations struggled to regain profitability, Sun Life pulled out from a $38 million bid to buy the Colonial Life Insurance Company from the Chubb Corporation.
He returned, however, in 1975, after the crash of the housing market in the previous year threatened the survival of the company. In 1973, two years after Kaufman and Broad purchased Sun Life, Eli Broad left the company. In addition to its life insurance operations, Kaufman and Broad also operated its own financial services company, which provided funds for mortgages for buyers of Kaufman and Broad homes. Kaufman and Broad prospered during the 1960s boom years in the housing market, and by the end of the decade, the company was looking for ways to diversify its operations and protect itself from downswings in the volatile housing market.
Kaufman and Broad had been started in 1957 by Eli Broad, who joined with Detroit-area builder Donald Kaufman to form a housing construction firm. This company started on the path that led to the formation of SunAmerica on November 19, 1971, when it was purchased by the Kaufman and Broad Building Company. The earliest incarnation of SunAmerica was the Sun Life Insurance Company of America, which was founded in 1890 in Baltimore. In the late 1980s, the company was separated from the home building business, and it grew rapidly as a purely financial business. Over time, SunAmerica evolved from a general life insurance provider to a specialist in retirement planning. SunAmerica began as a subsidiary of a house building company that sought to diversify its activities and cushion the impact of cyclical financial trends on its business. SunAmerica Inc., among the nation's largest life insurers, is also a financial services company, offering retirement planning and savings products as well as retirement annuities.
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