Transamerica Occidental Life Moves Bulk of Operations to Iowa

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Transamerica Occidental Life Insurance Co. is moving the bulk of its Kansas City operations to Cedar Rapids, Iowa, costing 500 jobs and alarming city officials trying to bring businesses back downtown.

The company’s corporate parent, Netherlands-based Aegon Group, announced the move, saying it wants to consolidate its insurance holdings in Cedar Rapids by the end of the year. About 50 Transamerica employees are expected to remain in Kansas City.

“We recognize the impact this consolidation will have on each of our Kansas City employees, their families and on Kansas City,” said Brenda Clancy, Transamerica’s executive vice president and chief operating officer, in a prepared statement.

Transamerica’s announcement comes just days after Sprint Nextel Corp., the area’s largest private employer, announced it would cut 5,000 jobs by April, although it’s not known how many will come from its Kansas City-area work force.

Current and former city leaders, who heralded the company’s arrival from Los Angeles in 1993 as a cornerstone in their efforts to revitalize downtown, expressed shock and dismay at the news.

Rep. Emanuel Cleaver, R-Mo., who essentially camped out in Los Angeles to persuade Transamerica executives to move to Kansas City when he was the city’s mayor, said he was told by the company’s directors that they valued diversity and a downtown presence when they looked for a new location.

“I haven’t been to Cedar Rapids in about two year, so maybe there’s been an influx of diversity, … but I can tell you I screamed when I heard they were leaving,” Cleaver told The Kansas City Star from his Washington office. “It’s a blow to me and other aggressive mayors who go all out to bring jobs into a community.

Current Mayor Kay Barnes was more upbeat, noting that Kansas City has benefited from other relocations and that the setback was likely temporary. She predicted “the vacant office space created by their departure will be filled with other employers who are anxious to be part of our new downtown.”

Aegon, based in The Hague, Netherlands, is one of the largest insurance, pension and financial services companies in the world. Cedar Rapids holds the majority of its U.S. operations, with five other business units and 3,000 employees already located there.

Executives at Transamerica, which had more than $763 billion in insurance in force in 2005, estimate the move will save between $15 million and $20 million per year.