Resolution Life announced the signing of a reinsurance transaction with Protective Life Corporation’s insurance subsidiaries.
Protective is a US-based subsidiary of Tokyo-headquartered Dai-ichi Life Holdings, Inc.
The agreement covers in-force structured settlement annuities and secondary guarantee universal life policies. Under the terms of the transaction, Protective will cede US$9.7 billion in reserves while continuing to manage policy administration.
Following this transaction, Resolution Life’s total portfolio of general account life and annuity reserves will increase to approximately $100 billion, covering more than 4 million in-force policies across its global business.
The reinsurance agreement follows the recently announced acquisition of Resolution Life by Nippon Life, which the company has described as supporting its next stage of growth.
JP Morgan acted as financial advisor to Resolution Life, with Debevoise & Plimpton LLP providing legal counsel. Wells Fargo served as financial advisor to Protective, with legal counsel provided by Willkie Farr & Gallagher LLP.
Warren Balakrishnan (pictured above), CEO of Resolution Life US, said the deal highlights the company's reinsurance capabilities in the US life and annuity sector.
Over the past year, the life reinsurance market in Japan experienced notable developments, reflecting a growing trend toward reinsurance solutions among domestic insurers.
In March 2024, Reinsurance Group of America (RGA) entered into a significant agreement with Japan Post Insurance Company (Kampo) to reinsure approximately JPY700 billion (around US$6.4 billion) of individual life annuities through coinsurance.
In May 2024, Pacific Life Re announced an asset-intensive reinsurance agreement with Tokio Marine & Nichido Life Insurance Co., Ltd. (Anshin Life). Covering in-force whole-of-life policies, this deal aims to reduce long-term interest rate risk and enhance asset-liability management capabilities for Anshin Life.
In August 2024, Talcott Financial Group's subsidiary, Talcott Life Re, entered a flow reinsurance transaction with Dai-ichi Frontier Life Insurance. This inaugural agreement for Talcott in Japan involves reinsuring a new annuity product, with Dai-ichi Frontier Life continuing to administer the policies.
The segment’s growing popularity has been challenged by regulators, notably Japan’s Financial Services Agency. Recently, the FSA announced that it has been more vigilant in overseeing insurers' risk management practices, particularly with regards to offshore reinsurance.
What are your thoughts on this story? Please feel free to share your comments below.
