Principal Reinsures $25 Billion of Fixed Annuity and Universal Life Business
On January 31, 2022, Principal Financial Group, Inc. (PFG) entered into an agreement with an affiliate of
Sixth Street Partners (SSP) and its insurance platform Talcott Resolution (Talcott), to reinsure a total of $25
billion in policy reserves (and accompanying investments), which relate to fixed annuities and universal life
insurance with secondary guarantees.
Lighthouse Property and Safepoint Insurance Go On Offense
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Allianz Reinsures $35 Billion of Fixed Indexed Annuities
On December 3, 2021, Allianz SE (Allianz) announced that its principal U.S. life insurer, Allianz Life
Insurance Company of North America (ALNA), entered into separate agreements with Talcott Resolution
Life Insurance Company (TRL) and Resolution Life Group Holdings LP (Resolution Life) to reinsure a total
of $35 billion in fixed indexed annuity reserves.
Manulife Agrees to Sell Block of Legacy Variable Annuities
On November 15, 2021, Manulife Financial Corporation (MFC) reached an agreement with Venerable
Holdings Inc. (VH) to reinsure roughly $22 billion (account values) in variable annuity business issued by
MFC’s principal U.S. life insurer John Hancock Life Insurance Company (USA) (JHUSA).
NAIC Updates Risk-Based Capital Bond Factors
In June 2021, the National Association of Insurance Commissioners (NAIC) adopted new factors related to the required capital for bond holdings for the Risk-Based Capital ratios of Life, Property & Casualty, and Health insurance companies. Details on the update are outlined below:
Life Insurance Industry in Transition: 2009 through 2021
In the years since the financial crisis a sizeable number of insurers have executed (or are about to execute) significant changes in their business operations in the U.S. life, annuity, and/or health insurance markets. These have included the following:
FedNat Insurance Group – Exceptional?
Last week, Demotech Inc. issued a release affirming its Financial Stability Ratings (FSR) of A for the three insurance subsidiaries of publicly traded FedNat Holding Company: FedNat Insurance Company (FIC), Maison Insurance Company, and Monarch National Insurance Company. It read as follows:
Privately-Owned Insurer’s Exposure to Less Liquid Bonds
Life insurers have long held a mix of assets with various liquidity profiles, from the very liquid to the
nearly illiquid. Investments with the highest liquidity include investment grade bonds (especially
government bonds), securities with a short remaining duration, and cash and cash equivalents. Less liquid securities include mortgage loans, below investment grade bonds, and alternative investments.
Prudential to Change Strategic Direction in Individual Life Insurance and Annuities
Prudential Financial Inc. (PRU) announced yesterday (September 15, 2021) that it intends to sell a large
portion of its existing variable annuity business to Fortitude Group Holdings LLC (FGH), a Bermuda based
holding company. FGH is the parent company of Fortitude Re (FRE), one of Bermuda’s largest multi-line
reinsurers.
Crusader Insurance Company Downgraded 2 Additional Pegs to B
Crusader Insurance Company (CIC), a property & casualty subsidiary of publicly-traded Unico American Corporation, was downgraded 2 pegs today by A.M. Best, from B++ (5th highest) to B (7th highest). This comes after a critical downgrade below A- two years ago (January 2019).