Corebridge Financial, Inc. has entered into an agreement with CS Life Re, a subsidiary of Venerable Holdings, Inc. to reinsure all the variable annuities of its Individual Retirement business, with account value totaling $51 billion as of March 31, 2025.
The transaction is valued at $2.8 billion, consisting of both ceding commission and capital release, and will generate approximately $2.1 billion of net distributable proceeds after-tax for Corebridge.
Kevin Hogan, president and chief executive officer of Corebridge, said, “This is a transformative transaction that repositions the company by exiting Individual Retirement variable annuities. This transaction delivers significant value for Corebridge and its shareholders. We are reaffirming our financial targets while reducing risk and maintaining our diversified business model.
“We expect to use the proceeds to accelerate our capital management objectives, including a substantial majority returned via share repurchases, with the remainder to support organic growth. Our Board of Directors approved a $2 billion increase to our share repurchase authorization in connection with this transaction.
“We are pleased to partner with Venerable on this transaction given their deep expertise and leadership in the variable annuity reinsurance business.”
Transaction Overview
- Corebridge will reinsure its entire Individual Retirement variable annuity in-force book, amounting to $51 billion of total account value as of March 31, 2025, through reinsurance transactions with the Company’s insurance subsidiaries American General Life Insurance Company (AGL) and The United States Life Insurance Company in the City of New York (USL)
- The $51 billion of total account value (“AV”) includes $5 billion of General Account AV (reinsured 100% on a coinsurance basis) and $46 billion of Separate Account AV (reinsured on a modified coinsurance basis)
- New variable annuity contracts written through the Individual Retirement business and issued by AGL will be reinsured through an ongoing flow reinsurance agreement that will begin once the transaction is closed
- The transaction includes the sale of a related investment adviser and manager for portfolios offered in Corebridge variable annuity products (SAAMCo)
- The transaction also includes extensive counterparty protections, including comfort trusts with defined investment guidelines, over-collateralization requirements, and a protective hedging arrangement
- The AGL transaction is expected to close in the third quarter while the USL transaction and the sale of SAAMCo are expected to close in the fourth quarter, subject to customary closing conditions including regulatory approvals
Broad Individual Retirement Product Platform
Corebridge will continue to offer annuity product platforms in the industry, including fixed, index and registered index-linked annuity (RILA) products.
- The Individual Retirement business will continue to manufacture and distribute variable annuity products outside New York state supported by a flow arrangement with Venerable
- Prior to the close of the transaction, USL will cease manufacturing and distributing new Individual Retirement variable annuities in New York state
- Corebridge will continue to administer and service all of its contracts, including those covered by the reinsurance transactions
Corebridge holds more than $400 billion in assets under management and administration (AUA) as of March 31, 2025.
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