RGA's Strategic Reinsurance Transaction with Equitable Holdings

Reinsurance Group of America (RGA), a leading global life and health reinsurer, has recently announced a significant reinsurance transaction with Equitable Holdings, Inc. (NYSE: EQH). This strategic partnership, valued at $32 billion, involves RGA reinsuring 75% of Equitable's in-force life insurance liabilities, comprising $18 billion in general account reserves and $14 billion in separate account reserves. The transaction is expected to close in mid-2025, subject to customary closing conditions including regulatory approvals.

Key Transaction Details
RGA expects to deploy $1.5 billion of capital at closing into this reinsurance transaction, based on expected required capital to support the block. The transaction is expected to contribute approximately $70 million of adjusted operating income before taxes in 2025, based on an assumed mid-year effective date. Adjusted operating income before tax is expected to increase to $160 - $170 million in 2026, and over time to approximately $200 million per annum, with earnings contribution expected to benefit from repositioning a portion of the asset portfolio transferred as part of the transaction to better align to RGA’s asset strategy.

RGA expects to finance the transaction using excess capital, and, subject to market conditions and other factors, proceeds from a potential debt financing. Equitable will continue to provide direct policyholder administration and support.

Expanding Strategic Partnership
The transaction not only strengthens RGA's market position but also expands the strategic partnership between RGA and Equitable across underwriting, product development, distribution, and investment management. This multi-faceted collaboration model positions RGA to capture additional value streams and strengthen its market position, while Equitable gains access to RGA's expertise and resources in these areas.



Implications for RGA's Risk Exposure and Capital Deployment
The 75% quota share structure in the transaction between RGA and Equitable represents a significant risk exposure for RGA, but it also presents an opportunity for capital deployment and earnings growth. The transaction's structure and RGA's prudent risk management approach indicate that the company has carefully considered the implications for its risk exposure and capital deployment.

RGA's legacy of diligent risk management and world-class underwriting and biometric expertise has positioned the company to deliver sophisticated risk solutions. The transaction is well aligned to RGA’s existing asset and liability enterprise risk profile, indicating that the company has carefully considered the risks and rewards associated with this deal.

In conclusion, RGA's strategic reinsurance transaction with Equitable Holdings is a testament to the company's ability to execute on large in-force opportunities and demonstrate its unique ability to support clients' new business efforts with product underwriting and biometric expertise. This partnership is an example of RGA's capacity to provide creative solutions and technical expertise that support both sides of the balance sheet, and it is a prime example of how the execution of RGA's Creation Re strategy can address clients' current and future needs.