Reinsurance Group of America (RGA) has announced the establishment of Ruby Reinsurance Company (Ruby Re), a Missouri-based third-party life reinsurance company focusing on the US asset-intensive business.
Ruby Re has successfully completed its initial funding round, securing equity capital commitments from key investors including Golub Capital, Hudson Structured Capital Management Ltd. (operating as HSCM Bermuda in its re/insurance business), and Sammons Financial Group.
Ruby Re’s business model involves reinsuring transactions from RGA without directly engaging with clients. RGA plans to retrocede an existing block of liabilities worth $2.5 billion to Ruby Re. Additionally, Ruby Re is set to receive a quota share of all future qualifying business from RGA, subject to specific conditions such as adherence to underwriting standards and regulatory approvals.
Jefferies served as the financial advisor for this venture, with Oliver Wyman providing actuarial support. Latham & Watkins acted as legal advisors to RGA, while Sidley Austin represented the lead investors.
“As a pioneer in the asset-intensive business, I am excited about the next step in our continuing support for this growing market segment. Ruby Re provides RGA with alternative capital that expands our capacity at attractive terms benefiting our clients, shareholders, and Ruby investors,” RGA president Tony Cheng said.
“This is Golub Capital’s inaugural insurance capital sidecar transaction and is a culmination of a shared investment approach and valuable partnership with RGA since 2010. We are delighted to be able to leverage our financing capabilities to support RGA’s continued growth,” Golub Capital vice chair Gregory Robbins said.
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