Full exit of Individual Retirement variable annuities
Significant value upside for shareholders with $2.8 billion transaction value
Acceleration of Corebridge's capital return strategy with $2.1 billion in net distributable proceeds, substantial majority of which will be returned via share repurchases
Reaffirming attractive financial targets while reducing risk
Board of Directors authorizes $2 billion increase to share repurchase program
Corebridge Financial, Inc. ("Corebridge" or the "Company") (NYSE:CRBG) today announced that it has entered into an agreement with CS Life Re, a subsidiary of Venerable Holdings, Inc. ("Venerable") 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.
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
Financial Overview
- Attractive earnings multiple of approximately 9–10x 2026E and 2027E operating earnings
- Exits a portfolio with historically volatile GAAP earnings and tail risk exposure
- AATOI expected to decrease by approximately $300 million in 2026 and the impact is expected to decrease materially over the next few years
- Increases the Life Fleet RBC ratio by over 50 points before any share repurchases