Reinsurance Group of America (RGA) has solidified its strategic partnership with Equitable Holdings through a new agreement to reinsure a substantial block of life insurance products. This deal, announced on February 25, 2025, will see RGA take on $32 billion in life insurance liabilities, which includes $18 billion in general account reserves and $14 billion in separate account reserves.
To support the transaction, RGA anticipates deploying $1.5 billion in capital upon closing. The structure of the agreement is designed to fit RGA’s existing risk profile, and the company expects a positive impact on its adjusted operating earnings per share.
RGA projects that the transaction will generate about $70 million in adjusted operating income before taxes in 2025, assuming the deal closes in mid-year. That figure is expected to rise to between $160 million and $170 million in 2026 and eventually stabilize at approximately $200 million annually.
RGA plans to fund the transaction through its excess capital reserves and potentially through debt financing, depending on market conditions. Equitable, in this agreement, will maintain responsibility for policyholder administration and support, meaning they retain the relationship with their customers. The deal is expected to be finalized in mid-2025, contingent on regulatory approvals and the fulfillment of other standard closing conditions.
This transaction marks RGA’s second significant deal in recent months. The reinsurer previously announced a reinsurance agreement with John Hancock, a Manulife subsidiary, covering approximately $4.1 billion in liabilities.
Equitable is set to benefit from the transaction, as it seeks to increase its stake in AllianceBernstein. The deal is expected to free up over $2 billion in capital, which Equitable plans to use in a tender offer to acquire up to 46 million units of AllianceBernstein, valued at about $1.8 billion. If successful, Equitable’s ownership in AllianceBernstein would increase from roughly 62% to 77.5%, according to Reuters.
In addition, the reinsurance transaction will facilitate $500 million in share repurchases for Equitable, aligning with its strategic goals to concentrate on the retirement, wealth management, and asset management sectors.
In 2021, Equitable completed the sale of Corporate Solutions Life Reinsurance Company (CS Life Re) to Venerable Holdings Inc. This sale involved the reinsurance of a legacy variable annuity block previously held by Equitable Financial Life Insurance Company, representing $36.5 billion in underlying account value and general account assets.
