AMERUS LIFE HOLDINGS, INC.
418 Sixth Avenue
Des Moines, IA 50309-2407
November 13, 1997
VIA EDGAR
Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: AmerUs Life Holdings, Inc. (File No. 1-12363)
and AmVestors Financial Corporation (File No. 1-11401)
Gentlemen:
On behalf of AmerUs Life Holdings, Inc. ("AmerUs"),
attached for filing via EDGAR pursuant to Rule 14a-6(b) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
are other soliciting materials which are expected to be used in
connection with the solicitation of proxies from certain
shareholders of AmerUs and certain stockholders of AmVestors
Financial Corporation relating to the transactions described in
the Registration Statement on Form S-4 (333-40065) of AmerUs.
Should the Staff have any questions or comments with
respect to the attached materials, please call the undersigned at
515/362-3689 or Donald Toker of Skadden, Arps, Slate, Meagher &
Flom LLP & Affiliates at 202/371-7886.
Very truly yours,
/s/ Joseph Haggerty
Joseph Haggerty
cc: Ms. Shelley E. Parratt
Assistant Director
AmerUs Life Holdings, Inc.
Investment Opportunity
* Proven success in running the business
- Solid operating fundamentals
- Strong balance sheet
* Proven success in growing the business
- Core earnings growth
- Mergers, acquisitions and joint ventures
* Attractive valuation
- ROE target of 15%
Investment Opportunity
* Proven success in running the business
* Proven success ingrowing the business
* Attractive valuation
* We do what we say
Description of table as follows:
A table illustrating Operating Earnings for the years 1992
through 1996 and the nine month period through September of 1997.
Earnings per share for each individual year (x axis of the graph)
are displayed as follows;
1992 - $1.39 ($per share)
1993 - $1.05
1994 - $1.19
1995 - $1.66
1996 - $1.77 ($1.77 per share is broken down into $.40
per share and $1.37 for an aggregate of $1.77.
The $1.37 is labelled on a highlighted column.
1997 (through September only) $1.59 is labelled in a
highlighted block.
Description of table as follows:
A table showing asset growth for the years 1993 through 1996
and the nine months periods through September 1996 and 1997 as
follows (in millions):
1993 - Central Life $ 2.2
1994 - Central Life $ 2.2
American Mutual $ 1.2
-----
$ 3.4
1995 - AmerUs $ 3.9
1996 - AmerUs $ 4.4
1997 (Proforma) AmerUs $ 4.5
Delta $ 2.0
AmVestors $ 3.5
-----
$10.0
Description of chart as follows:
A chart showing the historical trading volume of AmerUs
Common Stock as well as a comparison of the Closing Market Price
(in U.S. dollars) of AmerUs Common Stock versus the Standard and
Poor's 500 Index Price from January 30, 1997 through November 11,
1997. The high Closing Market price shown is $35 1/2 and the low
is $19, with the price of the initial public offering of (IPO)
$16 1/2. The volume ranged as high as approximately 3.35 million
shares on the date of the IPO.
Overview of AmerUs Life Holdings, Inc.
GAAP Basis Pro-Forma for
6/30/97 Acquisitions
Assets $4.5 Bn $10.0 Bn
Equity (include FAS 115) $535 Mn $895 Mn
No. Shares of Stock 23.2 Mn 35.3Mn
Price Per Share $27.88 n/a
No. Shares Publicly Held 6.4 Mn 16.7 Mn
Book Value Per Share $23.10 $25.39
Market Cap $645 Mn Over $1 Bn
P/B 121%
P/E (IBES Mean)13.7X
Proven Success in Running the Business
* Solid operating fundamentals
- Favorable mortality experience
- Persistency higher than industry
- Superior expense control
- Higher investment yields
* Strong balance sheet
- High quality investment portfolio
- Conservative use of leverage
Chart as described below:
A line chart comparing the general insurance expenses/premiums of
AmerUs Life and the industry for the years 1991-1996. The
figures are as follows:
1991 - Industry; 38.5% 1994 -Industry; 32.5%
AmerUs; 35.1% AmerUs; 29.4%
1992 - Industry; 36.5% 1995 -Industry; 33.4%
AmerUs; 31.8% AmerUs; 28.5%
1993 - Industry; 33.6% 1996 -Industry; 31.7%
AmerUs; 29.4% AmerUs; 27.5%
Description of chart as follows:
This chart shows Adjusted Operating Earnings for AmerUs for
the years 1993-1996 and for the nine month periods through
September 1996 and 1997. (x axis). Dollar figures (in millions)
are listed on the y axis. The dollar amounts per year are the
following:
1993 - $24.2 million
1994 - $27.5 million
1995 - $38.5 million
1996 - $40.9 million - broken down into $9.1 million
and $31.8 million
1997 (through September only) - $36.8 million
Operating EPS
Nine Months Ended
September 30
($ in Thousands) 1997 1996
---- ----
Net Income $45,497 62,944
Net Realized Gains (8,712) $40,006
Equity add-on Tax - 4,480
Reorganization costs - 726
Liquidation Reserve 0 3,250
Formation of JV - 361
Operating Earnings $36,785 31,755
Operating EPS $1.59 $1.37
Top Line Growth
* New life operations president
* Agent recruitment
* New product
- Revised term portfolio
- Expanded equity index portfolio
Recent Major Transactions
* Central Life/American Mutual Merger (1994)
* Ameritas Joint Venture (1996)
* Formation of Mutual Holding Company (1996)
* Capital Securities Offering (1997)
* IPO (1997)
* Acquisition of Delta Life Corp. (1997)
* Pending Acquisition of AmVestors Financial Corp. (1997)
Description of chart as follows;
chart reflecting percentages of premiums, revenues and
earnings for the years 1985 through 1995
Annuities as % of Annuities Plus Life Insurance
1985 1986 1987 1988 1989
Premiums 23.80 25.30 25.40 33.70 36.00
Revenues 31.00 33.80 41.20 44.60 47.60
Earnings 4.90 4.40 0.00 13.30 19.30
1990 1991 1992 1993 1994 1995
Premiums 38.00 36.60 36.10 33.40 33.20 33.60
Revenues 49.60 51.50 52.50 52.70 52.40 51.90
Earnings 20.20 31.30 40.10 41.00 45.40 41.20
Disciplined Acquisition Criteria
* Strategic Criteria
- Consolidation/expense savings opportunities
- Expand and diversify distribution
- Enhance product portfolio
- Leverage investment skills
* Financial Criteria
- Disciplined return objectives
- Accretive to EPS
Acquisition Opportunities - Sense of Urgency
* Patient and prudent
* Reviewed many potential transactions
* Knowing when to say no
Strategic Fit
* Significant expansion in rapidly growing asset accumulation
business
* Expansion and diversification of distribution network
* Cross-selling opportunities
* EPS accretion in first year
Description of corporate structure chart as follows:
Corporate structure chart showing percentage of ALHI
ownership in the following entities:
AmerUs Life - 100%
AMAL - 34%
Delta Life Corporation - 100%
Delta Life and Annuity Co. - 100%
Announced: August 14, 1997
Closing: October 23, 1997
Why Delta?
* Fits with AmerUs' strengths
- Annuity scale
- Low cost operator
- Investment skills
- Expands distribution network
- Diversifies product line
* $2 billion inforce annuities
* $200 million premiums in new business per year
* Niche annuity player
Delta Overview
1993 1994 1995 1996 6/30/97
Gross Statutory Premiums $198 $295 $320 $232 $112
GAAP Assets $1.0 $1.5 $1.9 $1.9 $2.0
GAAP Net Income $1.0 $6.2 $5.2 $7.6 $3.4
Distribution System
* 3,400 PPGAs/brokers
* 9 Regional Directors
* The top producing states are Texas, California, Tennessee,
North Carolina, Oklahoma and Arizona
* 90% of distributors are NASD registered representatives
Niche Market
* Unique crediting strategy
* At least 70% of assets backing SPDAs invested in government
and agency-backed securities
* Equity index products include international index
Delta: Going Forward
* Expense Savings
* Improve quality of service
* Improve sales results
* Expense Savings at Delta
* Expense Reduction
By March 31, 1998 $10 million
By December 31, 1998 $12 million
* Accretive to EPS in first year
Steps to Improve Sales/Service
* Eliminate ownership uncertainty
* Name Cody Phillips President of Delta
* Revise bonus targets
* New Products
* Commit to raise service levels
A corporate structure chart showing percentage of ALHI's
100% beneficial ownership in:
AmerUs Life (with its 34%/49% ownership of AMAL),
delta Life Corporation (with its 100% ownership of Delta
Life and Annuity Co.) and
AmVestor's Financial Corporation (with its 100% ownership of
American Investors Life Insurance company and Financial
Benefit Life Insurance Company)
Announced: September 22, 1997
Why AmVestors?
* Excellent strategic fit
* Further expansion and diversification of distribution system
* Administrative expense consolidation
* Accretive to EPS in first year
AmVestors Exchange Ratios
Average AmerUs Stock
Trading Price Ratio
29.76 or higher .6724
29.75 .6723
27.00-29.74 $20.00/Trading Price
Less than $27.00 .7407
AmVestors Overview
* History
- Principal operating subsidiary, American Investors
Life, founded in 1965
- Acquired Financial Benefit Group in April 1996
- Focus on fixed deferred annuities, particularly fixed
SPDAs
* Financial Profile (9/30/97)
- $3.5 billion of GAAP assets
- $235 million of GAAP equity + $65 million of
convertible debt
- $186 million of statutory capital surplus & AVR
Description of production chart as follows:
This AmVestors Annuity Production chart shows Affiliate
Premiums and IMO Premiums combined monetary value for the years
1992 through 1996 and the nine months through September 1996 and
1997 (note: the figure for September 1997 has been annualized).
Total premiums in dollars is on the y axis and the corresponding
year is on the x axis. The figures are as follows:
($in millions) 1992 - $53.9 in Affiliate; $114.8 in IMO for an
aggregate of $168.7
1993 - $81.4 in Affiliate; $140.8 in IMO for an
aggregate of $222.2
1994 - $86.1 in Affiliate; $181.7 in IMO for an
aggregate of $267.8
1995 - $78.1 in Affiliate; $279.6 in IMO for an
aggregate of $357.7
1996 - $102.8 in Affiliate; $323.2 in IMO for an
aggregate of $426.
1997 (through September) $121.6 in Affiliate;
$467.9 in IMO for an aggregate of $589.5
AmVestors Distribution
* Independent Producer Network
- 8,300 independent agents licensed in 47 states
- Contact maintained with 42,000 others
* Wholly Owned Marketing Organizations
- American Sales
- The Insurance Mart (TIM)
* Independent Marketing Organizations
- 75.9% of 1996 premiums
- 78.6% of the premiums through 9/5/97
AmVestors: Going Forward
* Expense Savings
1998 $6-8 million
1999 $11 million
* Accretive to earnings in first year
AmVestors' Key Strengths and Opportunities
* Marketing Momentum
* Strong Distribution
* Pure play in the fixed annuity market
* Substantial customer base offering cross-selling
opportunities
* $3.0 billion of invested assets
Ability to Fund Growth
* Targeted capital structure
* Risk-based capital target
* Ability to issue additional Class A shares
Pro Forma Capital Structure
Historical Pro
Forma
(In $Millions) 6/30/97 % 6/30/97 %
Debt $81.5 11.6 $268.5 21.7
Capital Securities 86.0 12.2 86.0 7.0
Equity 535.0 76.2 882.9 71.3
TOTAL CAPITALIZATION $702.5 100.0% $1,237.4 100.0%
Mix of Life Insurance and Annuities
Annuity Reserves
as Percent of
Annuity + Life
Reserves
(Statutory Basis)
AmerUs Life @ 12/31/96 41%
Industry @ 12/31/95 52%
AmerUs Life + Delta @ 12/31/96 61%
AmerUs + Delta + AmVestors 74%
@ 12/31/96
AMER
LIFE
Delta: Going Forward
* Expense Savings
* Improve quality of service
* Improve sales results
