RGA Retrocedes Block of U.S. Mortality Business to Pacific Life
ST. LOUIS, December 29, 2014 – Reinsurance Group of America, Incorporated today announced the completion of an agreement under which its primary U.S. operating company, RGA Reinsurance Company (“RGA”), will retrocede a block of U.S. individual life business to the retrocession operations of Pacific Life Insurance Company.
The block of business to be retroceded is comprised of term and permanent individual life policies written by U.S. insurers and assumed by RGA primarily between 1999 and 2004. RGA will retrocede approximately $200 billion of in-force individual life reinsured amount at risk. The effective date of the transaction is October 1, 2014.
“We are pleased to have been able to work with Pacific Life, a long-standing trusted partner, to find an opportunity that provides them with additional mortality risk and also allows us to release capital that can be deployed into other opportunities. This transaction highlights the attractiveness of mortality blocks to entities with complementary risk profiles,” said Anna Manning, Senior Executive Vice President, Global Structured Solutions, RGA.
Added Greig Woodring, President and Chief Executive Officer, "This is a meaningful event for RGA and it demonstrates our commitment to manage capital efficiently and effectively. As part of our broader capital management plans, we expect that the capital freed up from this transaction can be redeployed to achieve a higher return over time. We continue to see good organic growth opportunities, and have selectively used excess capital for in-force blocks, including two recently announced transactions in the U.S. life and annuity sector.”
RGA estimates that the transaction will:
- Result in a release of approximately $200 million of capital;
- Reduce annual premiums in the U.S. Traditional segment by approximately $450 million;
- Be accretive with the redeployment of capital.
Reinsurance Group of America, Incorporated (NYSE: RGA), one of the largest global life reinsurance companies in the world, provides clients with individual life reinsurance, individual living benefits reinsurance, group reinsurance, health reinsurance, financial solutions, facultative underwriting and product development. The company serves clients from operations in Australia, Barbados, Bermuda, Canada, China, France, Germany, Hong Kong, India, Ireland, Italy, Japan, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Singapore, South Africa, South Korea, Spain, Taiwan, Turkey, the United Arab Emirates, the United Kingdom, and the United States. Worldwide, RGA has approximately $2.9 trillion of life reinsurance in force and assets of $42.9 billion.