MetLife confirms $19.2bn risk transfer transaction

Written by Michael Griffiths

26/05/2023

MetLife has entered into an agreement with retirement and life insurance company, Global Atlantic Financial Group.

The group will reinsure approximately $19.2bn of US retail universal life, variable universal life, universal life with secondary guarantees, and fixed annuity statutory reserves.

MetLife stated that the combined value of the transaction is expected to be approximately $3.25bn with a ceding commission of $2.25bn and $1bn of capital that will be released.

Furthermore, MetLife’s board of directors has approved a $1bn increase in the company’s share repurchase authorisation. This is incremental to the $3bn authorisation announced earlier in May 2023, and brings MetLife’s total share repurchase authorisation outstanding to roughly $4bn.

The planned reinsurance transaction with Global Atlantic is aligned with MetLife’s disciplined evaluation of risk transfer options within MetLife Holdings, the closed-block businesses of the company’s former US retail segment.

“This transaction is another critical step in creating long-term value for our shareholders and for all our stakeholders,” MetLife president and CEO, Michel Khalaf, said.

“It will reduce enterprise risk and enable us to further invest in responsible growth while also returning capital to our shareholders — underscoring our financial strength and our balanced approach to capital management.”

Related Articles