Principal Financial Group has closed its transaction with Talcott to reinsure the company’s in-force U.S. retail fixed annuity and universal life insurance with secondary guarantee blocks of business.
Under the agreement, the company has reinsured approximately $25bn of in-force statutory reserves, and Talcott has engaged Principal® to manage approximately $4bn in commercial mortgage loans and private credit assets for the lifetime of the assets.
Principal continues to expect deployable proceeds of approximately $800m in 2022 from the closed transaction in combination with additional transactions designed to improve the capital efficiency of its in-force individual life insurance business. The proceeds are included in the company’s planned $2bn-$2.3bn of share repurchases for 2022.
The firm said that the reinsurance transaction advances the company’s long-term strategy to focus on higher growth markets, improve capital efficiency, and will meaningfully enhance the company’s future financial profile.
Reinsurance News covered this deal when it was first announced in January this year.
At the time, Dan Houston, chairman, president, and CEO of Principal commented: “We are focused on improving capital efficiency and strengthening Principal to win, grow, and create long-term shareholder value. We conducted a comprehensive process designed to optimise the value of these blocks, while improving our overall risk profile and reducing the capital requirements of our portfolio.”
He added: “At close, these transactions, along with strong operating performance, enables a significant increase to our share repurchase program, while supporting our ability to invest in growth, serve our customers, and lead in higher growth markets.”
