Voya Financial Inc., the U.S. insurer formerly owned by ING Groep NV, agreed to sell $90 billion of life policies to Reinsurance Group of America Inc. to help free up capital.
The 155,000 policies are backed by about $1.4 billion in reserves, New York-based Voya said Thursday in a statement. Voya said the transaction will create an immediate pretax loss of at least $100 million.
Voya Chief Executive Officer Rodney Martin has been focusing on retirement products and asset management. His strategy is to cut dependence on term-life insurance contracts, which must be supported by large amounts of capital because the policies can be in force for decades.
“The transaction aligns with our focus on executing on growth, margin and – as in this example – capital initiatives,” Martin said in the statement. He said the deal will help free up more than $230 million in capital.
RGA, the reinsurer that was spun off from MetLife Inc., struck an agreement last year to take on about $100 billion of life policies from Voya.
The latest deal allows RGA to “leverage our deep expertise and understanding of the U.S. mortality market,” Anna Manning, senior executive vice president of global structured solutions, said in a separate statement. “Voya is a long-standing partner with whom we have built a strong alliance.”
Voya’s banker on the deal was Citigroup Inc., and the insurer got legal advice from Sutherland Asbill & Brennan.