Two major global reinsurance firms, Reinsurance Group of America and RenaissanceRe, have launched a new start-up named Langhorne Re, which will target in-force life and annuity business and leverage third-party capital as part of its backing.
Langhorne Re will be a global reinsurer targeting large in-force life and annuity blocks, the pair said today.
The venture has secured $780 million of equity capital commitments including investments from the founders RGA and RenaissanceRe. The third-party capital commitments have come from pension funds and other life insurance companies.
Langhorne Re aims to “combine a strong long-term capital base with underwriting and third-party capital management support from RGA and RenaissanceRe to purchase large in-force life and annuity blocks, allowing clients to de-risk and optimize their capital management,” the companies said.
“We are very pleased to announce the launch of Langhorne Re with our strategic partner, RenaissanceRe,” commented Scott Cochran, Executive Vice President, Corporate Development and Acquisitions at RGA. “Powered by the complementary and industry-leading capabilities of RGA and RenaissanceRe, Langhorne Re is uniquely positioned to provide competitive and flexible solutions that expand RGA’s existing client offerings.”
“RenaissanceRe’s experience with managing third party capital and sophisticated risk management combined with RGA’s experience in the life market make this a very attractive partnership,” added Aditya K. Dutt, President, Renaissance Underwriting Managers, Ltd. “As a result, we expect both clients and policyholders will benefit from our long-term approach and track record of capital stewardship.”
RenaissanceRe already operates third-party capitalised reinsurer DaVinciRe and specialises in bringing alternative sources of capital to joint-ventures as well. RGA is a leading underwriter of life and annuity risks.
Hence this pairing makes a great deal of sense and Langhorne Re will be an attractive offering for third-party investors looking to access the returns of reinsurance business.
Barclays acted as financial advisor and Sidley Austin LLP as legal advisor for Langhorne Re.