MetLife is eyeing the sale of its US variable annuity business to free up capital for investment in high-growth areas, Reuters reported citing sources.
The US-based insurance firm is working with an investment bank for the divestiture, which is at an early stage and carries no certainty that it will go through.
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As per the insurer’s financial statement, its overall annuity business, which includes both fixed-rate and variable policies had $58.23bn at the end of 2021.
The sources said that the sale will fetch only a small portion of whatever book value is divested as funds for MetLife.
This disposal has a greater financial significance because of the capital freed, tax implications and other financial benefits that could be worth billions.
The policies being considered for sale are held by MetLife’s business MetLife Holdings, which holds products that just need to be managed till maturity.
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By GlobalDataEarlier this month, MetLife CFO John McCallion told analysts that with rising interest rates, it could sell some part of its runoff business.
As the yields which can be earned on investments are increasing, runoff deals of variable annuities are also rising because it is easier to gain profit on such policies.
In October 2021, the American insurance firm unveiled plans to increase its shareholding in the Indian joint venture (JV) PNB MetLife India Insurance Company to 47.325%.
Last month, MetLife allied with Zurich Assurance and Aon on a $3.5bn longevity reinsurance deal for a UK pension scheme.
