Des Moines-based American Enterprise Group Inc. and Homesteaders Life Co. of West Des Moines today announced they have signed a letter of intent for Homesteaders to merge into American Enterprise.

American Enterprise is the parent company of Des Moines-based American Republic Insurance Co. and Omaha-based World Insurance Co., which specialize in health, life and annuity insurance products in the senior and individual health markets. Homesteaders specializes in funeral insurance funding and support. With combined assets of $2.26 billion, the merged company would be the sixth-largest Greater Des Moines-based life insurance company based on assets.

Homesteaders would reorganize to form a mutual insurance holding company, which would merge into American Enterprise Mutual Holding Co. Through the merger transaction, Homesteaders would become a sister company to American Republic and World Insurance.

Following the merger, which is subject to due diligence and regulatory approval, total revenues of American Enterprise would exceed $1.1 billion, an increase of more than 60 percent. The combined company’s statutory assets would increase from $700 million to $2.3 billion.

“This is an exciting diversification opportunity for American Enterprise,” Michael E. Abbott, CEO of American Enterprise, said in a joint press release. “Homesteaders holds a premier leadership position in a significant and very specialized marketplace: pre-need insurance funding. Their commitment to their funeral home owner customers is consistent with our commitment to our customers in our individual health and senior markets.”

Homesteaders Chairman and President Graham Cook said joining with another mutual organization is important because the mutual structure supports a financial commitment to long-term security as opposed to short-term gains.

“American Enterprise shares our vision to support funeral home owners’ efforts to meet their client families’ demand for safe and secure prearranged funeral funding,” Cook said in the release. “As a member of this organization, Homesteaders will have access to resources that will support and amplify our company’s position as the pre-need insurance funding provider of choice.”

Following successful completion of a merger, Homesteaders would operate as a distinct company under its current management led by Cook. No changes in staff are anticipated or planned as a result of the merger, Abbott said.

American Enterprise has approximately 548 employees working in Des Moines, 313 in Omaha, and 83 assigned to other locations. It works with more than 30,000 independent insurance agents. Both World Insurance and American Republic Insurance are rated A- (Excellent) by A.M. Best Co.

Homesteaders Life, rated B++ (Good) by A.M. Best, has 129 employees at its Des Moines home office and 33 field personnel across the United States. It is associated with more than 3,000 funeral homes and 8,000 licensed agents.