Involving a closed-book block of ’seasoned disability’ business
December 17, 2020 — NEW YORK–(BUSINESS WIRE)–Global Atlantic Financial Group Limited (“Global Atlantic”), a leading U.S.-focused retirement, life insurance and reinsurance company, today announced the signing of a reinsurance transaction with Unum Group (“Unum”) involving a closed block of seasoned individual disability income business backed by $8.5 billion in assets.
The transaction will close in two phases, with approximately $7 billion in assets closing concurrent with signing and the remaining $1.5 billion expected to close in the first quarter of 2021, pending receipt of any required approvals and consents. This is the third block reinsurance deal for Global Atlantic in 2020, totaling over $16 billion of assets.
Over 95% of the block is comprised of spread-based claim reserves that pay a steady income stream to the policyholder, similar to fixed payout annuities. The balance of the block is active life policies not on claim. Additionally, Unum will provide a volatility cover on these active lives, thereby reducing any material disability risk for Global Atlantic on this business. Unum will continue to administer the business and retain all policyholder servicing and operations functions.
A ’Seasoned Run-Off’ Block of Business
“We are pleased to provide a long-term solution that meets Unum’s capital objectives and strategic goals for its legacy closed block of individual disability income business,” said Manu Sareen, President of Global Atlantic’s Institutional business. “This is a seasoned run-off block of business with a rich history of data and stability of cash flows that are very attractive to Global Atlantic.”
“Global Atlantic’s experience in executing block deals like these made them an ideal partner for us,” said Unum Group’s President & CEO Richard P. McKenney. “The team’s collaborative approach resulted in a custom solution tailored specifically to meet our financial objectives.”
The previously announced Ivy co-investment vehicle will invest alongside Global Atlantic’s subsidiaries. Business ceded to Ivy will be managed using Global Atlantic’s leading risk and investment management capabilities. In total following this transaction, Ivy will have deployed approximately 60% of its capital commitments.
With this deal, Global Atlantic further advances its position as a leading reinsurance franchise in the U.S. life and annuity marketplace, having reinsured approximately $50 billion of assets since its inception in 2004.
In July 2020, Global Atlantic agreed to be acquired by a subsidiary of KKR & Co. Inc. The transaction, which is expected to close in early 2021, is subject to required regulatory approvals and certain other customary closing conditions.
About Global Financial Group
Global Atlantic Financial Group, through its subsidiaries, offers a broad range of retirement, life and reinsurance products designed to help our clients address financial challenges with confidence. Global Atlantic offers custom solutions and responsive service for the capital, risk and legacy-business management of life and annuity insurance companies around the world.
Global Atlantic was founded at Goldman Sachs in 2004 and separated as an independent company in 2013. Global Atlantic’s success is driven by a unique heritage that combines deep product and distribution knowledge with leading investment and risk management, alongside a strong financial foundation of more than $90 billion in assets, as of June 30, 2020.
Global Atlantic Financial Group (Global Atlantic) is the marketing name for Global Atlantic Financial Group Limited and its subsidiaries.
Reinsurance transactions are entered into by Global Atlantic Re Limited, 19 Par-La-Ville Rd Second Floor, Hamilton, Bermuda, Commonwealth Annuity and Life Insurance Company or one of their affiliates. Reinsurance is placed, where required by applicable law, by Global Atlantic Risk Advisors, L.P., a licensed reinsurance intermediary and subsidiary of Global Atlantic Financial Group Limited.