Life insurer MetLife has announced it has completed a $19 billion risk transfer transaction with Global Atlantic Financial Group, a retirement and life insurance company.
The deal sees Global Atlantic reinsuring a diversified portfolio of MetLife’s US retail annuity and life insurance business, reinforcing Global Atlantic’s position as a leading reinsurer in the annuity and life insurance marketplace, according to the Group.
Under the terms of the agreement, MetLife transferred general account assets for the block to Global Atlantic subsidiaries First Allmerica Financial Life Insurance Company and Commonwealth Annuity and Life Insurance Company.
Global Atlantic and MetLife announced the signing of this reinsurance agreement back in May 2023.
According to the announcement, MetLife transferred $14 billion of US retail life insurance reserves, consisting of universal life, variable universal life, and universal life with secondary guarantees, along with $5.2 billion of fixed annuity reserves to Global Atlantic.
At the time of signing, Global Atlantic’s general account assets under management supporting the transaction were approximately $13 billion.
“We are pleased to have closed this transaction, which illustrates MetLife’s capacity to execute as well as our commitment to reduce enterprise risk and deploy capital to its highest and best use,” said MetLife President and CEO Michel Khalaf.
The combined value of the reinsurance agreement is estimated to be approximately $3.25 billion, with MetLife receiving a ceding commission of $2.25 billion and $1 billion of released capital.
Moreover, as part of its commitment to enhancing shareholder value, MetLife’s Board of Directors has authorised an additional $1 billion for share repurchases, bringing the total outstanding share repurchase authorisation to approximately $4 billion.
MetLife stated that it will remain as administrator and service provider for the policies to be reinsured. Additionally, MetLife Investment Management will also manage a significant amount of the assets under a five-year investment management agreement.
Manu Sareen, Co-President and Head of Institutional Markets for Global Atlantic, has highlighted the collaborative effort between the two companies in understanding MetLife’s financial objectives and risk transfer needs.
