RGA announces reinsurance transaction with Equitable Holdings
RGA has entered into an agreement with Equitable Holdings to reinsure a diversified block of life insurance products and expand their strategic partnership.
RGA is reinsuring 75% of Equitable’s in-force life insurance liabilities. The block includes approximately $18 billion of general account reserves and $14 billion of separate account reserves. RGA expects to deploy $1.5 billion of capital at closing into this reinsurance transaction, based on expected required capital to support the block.
RGA expects this transaction to contribute approximately $70 million of adjusted operating income before taxes in 2025, based on an assumed mid-year effective date. Adjusted operating income before tax is expected to increase to $160 – $170 million in 2026, and over time to approximately $200 million per annum, with earnings contribution expected to benefit from repositioning a portion of the asset portfolio transferred as part of the transaction to better align to RGA’s asset strategy.
RGA expects to finance the transaction using excess capital, and, subject to market conditions and other factors, proceeds from a potential debt financing.
Equitable will continue to provide direct policyholder administration and support.
The transaction is expected to close in mid-2025, subject to customary closing conditions including regulatory approvals.
“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.” – Ron Herrmann, Executive Vice President, Head of the Americas, RGA.
“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.” – Axel André, Executive Vice President, Chief Financial Officer, RGA.
