RGA and Equitable announce $32bn reinsurance transaction

Reinsurance Group of America (RGA) has entered into an agreement with Equitable Holdings, Inc. to reinsure a $32 billion diversified block of life insurance products.

According to RGA, it is reinsuring 75% of Equitable’s in-force life insurance liabilities, which includes approximately $18 billion of general account reserves and $14 billion of separate account reserves.

RGA said it expects to deploy $1.5 billion of capital at closing into this reinsurance transaction, based on the expected required capital to support the block.

The transaction is anticipated to close in mid-2025, subject to customary closing conditions including regulatory approvals.

RGA has suggested that it will finance the transaction using excess capital, and, subject to market conditions and other factors, proceeds from a potential debt financing.

Ron Herrmann, Executive Vice President, Head of the Americas, RGA, commented, “We are very excited about the partnership we have created with Equitable. This transaction affirms our ability to execute on large in-force opportunities and demonstrates RGA’s unique ability to support clients’ new business efforts with product underwriting and biometric expertise.

“This partnership is an example of our capacity to provide creative solutions and technical expertise that support both sides of the balance sheet, and it is a prime example of how the execution of our Creation Re strategy can address our clients’ current and future needs.”

Axel André, Executive Vice President, Chief Financial Officer, RGA, added, “Our strong financial position enables us to capitalize on this opportunity with Equitable, and the transaction is expected to meaningfully contribute to RGA’s earnings per share, with anticipated attractive returns on capital.

“We anticipate raising capital in connection with this transaction through the issuance of long-term debt, and we expect to continue to be in a position to execute on other attractive opportunities in our pipeline, while maintaining prudent capital management.”

Mark Pearson, President and Chief Executive Officer of Equitable Holdings, said, “We are very pleased to have reached agreement with RGA on this transaction, which creates compelling strategic and financial value for Equitable, is accretive to our 2027 financial targets, and is a good outcome for our policyholders.

“The transaction enhances our focus on Retirement, Asset Management, and Wealth Management, which are high return on capital businesses with attractive growth prospects where we have a clear right to win.

“We’re particularly excited about the opportunity to increase our ownership in AllianceBernstein and capture more of the strong synergies between the two companies as we firmly believe that combining insurance and asset management generates value.”

Goldman, Sachs & Co. LLC reportedly served as financial advisor to RGA, and Clifford Chance US LLP served as legal counsel in the transaction.

This website states: The content on this site is sourced from the internet. If there is any infringement, please contact us and we will handle it promptly.