Equitable to reinsure 75% of life insurance block with RGA 

Equitable Holdings has signed a reinsurance agreement with RGA to reinsure 75% of its in-force individual life insurance block.  

This move is expected to generate more than $2bn in value for Equitable, including a positive ceding commission and the release of capital. 

The transaction involves RGA reinsuring a diversified mix of life insurance products worth $32bn using excess capital and, depending on market conditions and other factors, proceeds from potential debt financing. 

This includes nearly $18bn of general account reserves and $14bn of separate account reserves.  

RGA will deploy $1.5bn of capital at the transaction’s closing, which is expected to contribute around $70m of adjusted operating income before taxes in 2025, assuming a mid-year effective date. 

The transaction is anticipated to be finalised in mid-2025, contingent on standard closing conditions, including regulatory approvals.  

Barclays and Willkie Farr & Gallagher have provided financial and legal advisory services, respectively, to Equitable Holdings. Oliver Wyman has contributed as the actuarial advisor.  

Goldman Sachs and Clifford Chance US have served as financial and legal advisors to RGA, respectively. 

RGA chief financial officer and executive vice president Axel André said: “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.” 

Equitable president and CEO Mark Pearson stated: “We are very pleased to have reached agreement with RGA on this transaction, which creates compelling strategic and financial value for Equitable, is accretive to our 2027 financial targets, and is a good outcome for our policyholders. The transaction enhances our focus on retirement, asset management, and wealth management, which are high return on capital businesses with attractive growth prospects where we have a clear right to win.”  

Equitable also revealed plans to increase its stake through a $1.8bn tender offer in its subsidiary AllianceBernstein (AB). 

As part of the agreement, AB will continue managing nearly 70% of the general account assets being reinsured. 

RGA’s net income available to shareholders was $148m for the fourth quarter of 2024, down from $158m in the year-ago quarter.  

The full-year income for 2024 decreased to $717m from $902m in 2023.