Ameriprise Financial, Inc. has announced a new reinsurance agreement with a subsidiary of Global Atlantic Financial Group that covers approximately $1.7 billion of fixed annuity policies sold through third parties.
The agreement was entered into by Ameriprise Financial’s insurance subsidiary, RiverSource Life Insurance Company, and Commonwealth Annuity and Life Insurance Company, a subsidiary of Global Atlantic.
The transaction is effective as of January 1, 2019 and covers approximately 20% of RiverSource’s in force fixed annuity account balances.
Ameriprise Financial said the deal generated approximately $200 million of deployable capital and is expected to be accretive to the company’s adjusted operating earnings per diluted share in 2019.
The agreement will have no impact to RiverSource policyholder contractual provisions, and RiverSource will retain account administration and servicing of the fixed annuity policies.
The parties also explained that the coinsurance agreement contains investment guidelines and a trust to meet the RiverSource’s enterprise risk management objectives.
Ameriprise Financial added that the transaction represents part of its strategy of shifting its business mix by reducing the level of capital allocated to its more capital-intensive business lines.
Manu Sareen, head of Global Atlantic’s Institutional business, commented: “We are very proud to work with RiverSource, in helping it to achieve its desired financial and capital management objectives.
“We utilized our leading transaction and investment expertise, coupled with our highly integrated risk management capabilities, to deliver a customized and accretive solution in an efficient time frame for our client.”
With this deal, Global Atlantic has reinsured $27 billion of assets since its founding. The company was launched at Goldman Sachs in 2004 and separated as an independent company in 2013.





