Reinsurance Group of America (RGA) has completed its previously announced transaction with Equitable Holdings, under which RGA will reinsure a US$32 billion block of life insurance business.
The agreement covers a diversified portfolio of life insurance products and expands RGA’s relationship with Equitable across several areas, including underwriting, product development, distribution, and investment management.
According to RGA, the deal was priced to generate returns within the company’s target range and is expected to contribute meaningfully to adjusted operating earnings per share.
Tony Cheng, president and CEO of RGA, said the transaction marks a milestone for the company.
“Beyond enhancing our market position, this transaction demonstrates our ability to execute strategic initiatives that align with our Creation Re strategy,” Cheng said.
The structure of the reinsurance arrangement includes approximately US$18 billion in general account reserves and US$14 billion in separate account reserves. RGA will reinsure about 75% of the total block.
As part of the financing arrangement, a US$700 million subordinated debenture has been issued, and the deal is projected to contribute roughly US$200 million in annual pre-tax income.
Elsewhere, market analysts offered differing assessments of the deal’s long-term implications. Morgan maintained an “overweight” rating on RGA shares following the announcement, citing favorable earnings potential. UBS, however, downgraded its stance to “neutral,” pointing to near-term uncertainties.
As of year-end 2024, RGA held US$118.7 billion in total assets and had approximately US$3.9 trillion of life reinsurance in force. The scale of its operations highlights RGA's capacity to support sizable transactions and complex risk transfers across global markets.
The transaction also comes at a time when global dedicated reinsurance capital reached a record US$769 billion in 2024. Growth in retained earnings and higher issuance of catastrophe bonds have contributed to a more capital-abundant environment, which in turn has increased competition and helped improve pricing terms for cedents across several product lines.
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