The speed with which Reinsurance Group of America helped Zurich Insurance Group subsidiary Farmers Farmers New World Life to the recent $2.3 billion annuity reinsurance transaction was key and demonstrates the reinsurers ability, it said today.
Yesterday we reported on the completion of the $2.3 billion annuity reinsurance transaction, which saw Farmers New World Life enter into an agreement with Reinsurance Group of America (RGA) to reinsure a closed block of its U.S. annuity book.
“This is an important transaction with a global partner of RGA,” explained John Laughlin, the reinsurers Executive Vice President, Global Financial Solutions of the deal which the company terms “asset intensive.”
“The short time frame of less than four months from initial RFP to completion demonstrates RGA’s superior ability to execute on behalf of our clients in meeting their capital and risk-management objectives,” he continued.
Farmers New World Life will continue to service and administer the policies and RGA benefits from a roughly $2.3 billion increase in the reinsurers invested asset base.
Laughlin also said; “The transaction is a good fit for our asset-intensive business and advances our strategy of building long-term relationships with clients based upon our expertise, financial strength, and execution capabilities.”
RGA has a particular focus on investing assets profitably and be acquiring this book and its reserves has given its investment portfolio a significant boost. The speed with which the deal was executed will have been attractive to Zurich, which has been looking to de-risk its business and offload legacy liabilities in recent years.
The annuity reinsurance transaction between RGA and Zurich subsidiary Farmers New World Life closed on May 17th 2017, with an effective date of April 1st 2017.