Fortitude Reinsurance (Fortitude Re) has completed a reinsurance transaction with Unum Life Insurance Company of America, a subsidiary of Unum Group, the companies announced.
Under the terms of the agreement, first disclosed in February, Unum will cede to FRL approximately US$3.4 billion in statutory reserves related to its individual long-term care (LTC) business.
In addition, the transaction includes about US$120 million of in-force premium from Unum Group’s multi-life individual disability insurance (IDI) portfolio. The transaction, which is effective as of January 1, 2025, covers 19% of Unum’s LTC block and 20% of its IDI in-force premium.
“[The deal] underscores the deliberate approach we have taken toward growth," Fortitude Re CEO Alon Neches (pictured above) previously said. "When partners like Unum place their trust in us, we ensure the value delivered honours that trust."
The transaction is expected to result in a net capital benefit of approximately US$100 million for Unum. That figure includes a US$200 million capital impact tied to the reinsured LTC block, offset by a US$300 million benefit associated with the reinsured IDI block.
The capital release is part of Unum’s broader financial management strategy aimed at strengthening its balance sheet while reducing long-tail risk exposure. Unum will also retain responsibility for servicing and administering the reinsured policies.
As part of the transaction, Fortitude Re has also entered into a retrocession agreement to transfer 100% of the LTC and IDI insurance risks associated with the block to a highly rated global reinsurance partner. This structure allows FRL to retain only the spread-based risks tied to the investment component of the transaction, consistent with its capital-light risk management approach.
As of Dec. 31, 2024, Fortitude Re reported US$106 billion in total assets under management. The company continues to expand its reinsurance footprint across life and annuity segments.
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