Reinsurance Group of America, Incorporated (NYSE: RGA), a
leading global life and health reinsurer, today announced it has
entered into an agreement with Equitable Holdings, Inc. (NYSE: EQH,
”Equitable”) to reinsure a diversified block of life insurance
products and expand their strategic partnership.
- RGA to reinsure $32 billion of a diversified mix of life
insurance products
- RGA expects to deploy $1.5 billion of capital at closing into
this reinsurance transaction
- Priced with attractive returns within RGA’s target range
- Expected to meaningfully contribute to adjusted operating
EPS
- Broadens RGA’s relationship with Equitable across underwriting,
product development, distribution, and investment management
“We are very excited about the partnership we have created with
Equitable,” said Ron Herrmann, Executive Vice President, Head of
the Americas, RGA. “This transaction affirms our ability to execute
on large in-force opportunities and demonstrates RGA’s unique
ability to support clients’ new business efforts with product
underwriting and biometric expertise. This partnership is an
example of our capacity to provide creative solutions and technical
expertise that support both sides of the balance sheet, and it is a
prime example of how the execution of our Creation Re strategy can
address our clients' current and future needs.”
RGA’s legacy of diligent risk management and world-class
underwriting and biometric expertise has positioned the company to
deliver sophisticated risk solutions. The transaction is well
aligned to RGA’s existing asset and liability enterprise risk
profile.
“Our strong financial position enables us to capitalize on this
opportunity with Equitable, and the transaction is expected to
meaningfully contribute to RGA’s earnings per share, with
anticipated attractive returns on capital,” said Axel André,
Executive Vice President, Chief Financial Officer, RGA. “We
anticipate raising capital in connection with this transaction
through the issuance of long-term debt, and we expect to continue
to be in a position to execute on other attractive opportunities in
our pipeline, while maintaining prudent capital management.”
Key Transaction Details
RGA is reinsuring 75% of Equitable’s in-force life insurance
liabilities. The block includes approximately $18 billion of
general account reserves and $14 billion of separate account
reserves. RGA expects to deploy $1.5 billion of capital at closing
into this reinsurance transaction, based on expected required
capital to support the block.
RGA expects this transaction to contribute approximately $70
million of adjusted operating income before taxes in 2025, based on
an assumed mid-year effective date. Adjusted operating income
before tax is expected to increase to $160 - $170 million in 2026,
and over time to approximately $200 million per annum, with
earnings contribution expected to benefit from repositioning a
portion of the asset portfolio transferred as part of the
transaction to better align to RGA’s asset strategy.
RGA expects to finance the transaction using excess capital,
and, subject to market conditions and other factors, proceeds from
a potential debt financing.
Equitable will continue to provide direct policyholder
administration and support.
The transaction is expected to close in mid-2025, subject to
customary closing conditions including regulatory approvals.
Goldman, Sachs & Co. LLC served as financial advisor to RGA,
and Clifford Chance US LLP served as legal counsel in the
transaction.
Conference Call Information
RGA will host a conference call to discuss the transaction
beginning at 9 a.m. Eastern Time on Monday, February 24. Interested
parties may access the call by dialing 1-844-481-2753 (412-317-0669
international) and asking to be joined into the Reinsurance Group
of America, Incorporated (RGA) call. Participants are asked to call
the assigned number approximately 15 minutes before the conference
call begins. A live audio webcast of the conference call will be
available on the Investors page of RGA’s website, www.rgare.com. A
replay of the conference call will be available at the same address
for 90 days following the conference call.
Reinsurance Transaction Presentation
The presentation to be used during the conference call will be
available on the “Investors” page of RGA’s website,
www.rgare.com.
About RGA
Reinsurance Group of America, Incorporated (NYSE: RGA) is a
global industry leader specializing in life and health reinsurance
and financial solutions that help clients effectively manage risk
and optimize capital. Founded in 1973, RGA is today one of the
world’s largest and most respected reinsurers and remains guided by
a powerful purpose: to make financial protection accessible to all.
As a global capabilities and solutions leader, RGA empowers
partners through bold innovation, relentless execution, and
dedicated client focus – all directed toward creating sustainable
long-term value. RGA has approximately $3.9 trillion of life
reinsurance in force and assets of $118.7 billion as of December
31, 2024.
Non-GAAP Financial Measures
RGA is unable to provide a reconciliation of the expected impact
of the reinsurance transaction on adjusted operating income before
taxes in 2025 and in future years, a forward-looking non-GAAP
financial measure, due to, among other things, that these
expectations are a composite of RGA’s goals for future results, the
inherent difficulty in forecasting generally, and the difficulty of
quantifying accurate forecasts of the numerous components
comprising these calculations that would be necessary to provide
any such reconciliations. These expectations are subject to
significant business, economic, regulatory and competitive
uncertainties and contingencies, many of which are beyond the
control of RGA, and are based upon various assumptions, which are
subject to change. Actual results will vary, and those variations
may be material. For a discussion of some of the important factors
that could cause these variations, please review the risk factors
set forth in “Risk Factors” in Part I, Item 1A of RGA’s Annual
Report on Form 10-K for the year ended December 31, 2024. Nothing
in this press release should be regarded as a representation by any
person that these expectations will be achieved, and RGA undertakes
no duty to update any such expectations.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any security of RGA, nor shall
there be any sale any security in any state or jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state or jurisdiction.
Cautionary Note Regarding Forward-Looking Statements
This document contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 and
federal securities laws including, among others, statements
relating to expectations with respect to the anticipated financial
impact of the reinsurance transaction, as well as statements
related to the anticipated financing of the reinsurance
transaction. Forward-looking statements often contain words and
phrases such as “anticipate,” “assume,” “believe,” “continue,”
“could,” “estimate,” “expect,” “if,” “intend,” “likely,” “may,”
“plan,” “potential,” “pro forma,” “project,” “should,” “will,”
“would,” and other words and terms of similar meaning or that are
otherwise tied to future periods or future performance, in each
case in all derivative forms. Forward-looking statements are based
on management’s current expectations and beliefs concerning future
developments and their potential effects on the Company.
Forward-looking statements are not a guarantee of future
performance and are subject to risks and uncertainties, some of
which cannot be predicted or quantified. Future events and actual
results, performance, and achievements could differ materially from
those set forth in, contemplated by, or underlying the
forward-looking statements.
Factors that could also cause results or events to differ,
possibly materially, from those expressed or implied by
forward-looking statements, include, among others: (1) adverse
changes in mortality (whether related to COVID-19 or otherwise),
morbidity, lapsation, or claims experience, (2) inadequate risk
analysis and underwriting, (3) adverse capital and credit market
conditions and their impact on the Company’s liquidity, access to
capital, and cost of capital, (4) changes in the Company’s
financial strength and credit ratings and the effect of such
changes on the Company’s future results of operations and financial
condition, (5) the availability and cost of collateral necessary
for regulatory reserves and capital, (6) requirements to post
collateral or make payments due to declines in the market value of
assets subject to the Company’s collateral arrangements, (7) action
by regulators who have authority over the Company’s reinsurance
operations in the jurisdictions in which it operates, (8) the
effect of the Company parent’s status as an insurance holding
company and regulatory restrictions on its ability to pay principal
of and interest on its debt obligations, (9) general economic
conditions or a prolonged economic downturn affecting the demand
for insurance and reinsurance in the Company’s current and planned
markets, (10) the impairment of other financial institutions and
its effect on the Company’s business, (11) fluctuations in U.S. or
foreign currency exchange rates, interest rates, or securities and
real estate markets, (12) market or economic conditions that
adversely affect the value of the Company’s investment securities
or result in the impairment of all or a portion of the value of
certain of the Company’s investment securities that in turn could
affect regulatory capital, (13) market or economic conditions that
adversely affect the Company’s ability to make timely sales of
investment securities, (14) risks inherent in the Company’s risk
management and investment strategy, including changes in investment
portfolio yields due to interest rate or credit quality changes,
(15) the fact that the determination of allowances and impairments
taken on the Company’s investments is highly subjective, (16) the
stability of and actions by governments and economies in the
markets in which the Company operates, including ongoing
uncertainties regarding the amount of U.S. sovereign debt and the
credit ratings thereof, (17) the Company’s dependence on third
parties, including those insurance companies and reinsurers to
which the Company cedes some reinsurance, third-party investment
managers, and others, (18) financial performance of the Company’s
clients, (19) the threat of natural disasters, catastrophes,
terrorist attacks, pandemics, epidemics, or other major public
health issues anywhere in the world where the Company or its
clients do business, (20) competitive factors and competitors’
responses to the Company’s initiatives, (21) development and
introduction of new products and distribution opportunities, (22)
execution of the Company’s entry into new markets, (23) integration
of acquired blocks of business and entities, (24) interruption or
failure of the Company’s telecommunication, information technology,
or other operational systems, or the Company’s failure to maintain
adequate security to protect the confidentiality or privacy of
personal or sensitive data and intellectual property stored on such
systems, (25) adverse developments with respect to litigation,
arbitration, or regulatory investigations or actions, (26) the
adequacy of reserves, resources, and accurate information relating
to settlements, awards, and terminated and discontinued lines of
business, (27) changes in laws, regulations, and accounting
standards applicable to the Company or its business, including
Long-Duration Targeted Improvement accounting changes, (28) our
ability to complete the reinsurance transaction discussed in this
press release on a timely basis or at all, including as a result of
the failure to satisfy any closing conditions, including those
related to regulatory approvals, or, if the reinsurance transaction
is completed, to achieve the expected financial and other benefits
of such reinsurance transaction, and (29) other risks and
uncertainties described in the Company’s other filings with the
Securities and Exchange Commission (“SEC”).
Forward-looking statements should be evaluated together with the
many risks and uncertainties that affect the Company’s business,
including those mentioned in this press release and described in
the Company’s filings with the SEC. These forward-looking
statements speak only as of the date on which they are made. The
Company does not undertake any obligation to update these
forward-looking statements, even though the Company’s situation may
change in the future, except as required under applicable
securities law. For a discussion of the risks and uncertainties
that could cause actual results to differ materially from those
contained in the forward-looking statements, you are advised to see
“Risk Factors” in Part I, Item 1A of the Company's Annual Report on
Form 10-K for the year ended December 31, 2024 and in our other
periodic and current reports filed with the SEC.
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version on businesswire.com: https://www.businesswire.com/news/home/20250224564600/en/
FOR MORE INFORMATION: Jeff Hopson Senior Vice President,
Investor Relations 636-736-2068 jhopson@rgare.com
Lynn Phillips Vice President, Corporate Communications
636-736-2351 lphillips@rgare.com
Lizzie Curry Executive Director, Public Relations 636-736-8521
lizzie.curry@rgare.com
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