Latest news with #variableannuities
Yahoo
10 hours ago
- Business
- Yahoo
Corebridge Exits Variable Annuity Block in $2.8B Reinsurance Deal
Corebridge Financial, Inc. CRBG recently inked a deal with a subsidiary of Venerable Holdings, Inc., CS Life Re, to reinsure the entire block of variable annuities within its Individual Retirement segment. The total value of the transaction stands at $2.8 billion, comprising a combination of ceding commission and capital release, and is expected to yield roughly $2.1 billion in net distributable proceeds after taxes for Corebridge. The reinsurance transaction encompasses the entire in-force book of variable annuity contracts within the Individual Retirement business. As of March 31, 2025, this portfolio held an account value (AV) of $51 billion. This AV includes $5 billion of General Account assets, which will be reinsured on a coinsurance basis, and $46 billion of Separate Account assets, which will be handled via modified coinsurance. Corebridge's insurance subsidiaries, American General Life Insurance Company ('AGL') and The United States Life Insurance Company in the City of New York ('USL'), will facilitate the reinsurance agreements. In addition to the reinsurance of annuity liabilities, the deal includes the divestiture of SAAMCo, an investment adviser and portfolio manager for Corebridge's variable annuity products. Subject to customary regulatory approvals and other closing conditions, the AGL transaction is anticipated to be completed in the third quarter of 2025, while the closing of the USL transaction and the sale of SAAMCo are expected in the fourth quarter. From a financial standpoint, the transaction implies a valuation multiple of approximately nine-10 times Corebridge's expected operating earnings for 2026 and 2027. Although CRBG anticipates a decrease in adjusted after-tax operating income of roughly $300 million in 2026, this impact is expected to decline significantly over the ensuing years. Furthermore, the transaction is projected to improve the company's Life Fleet Risk-Based Capital ratio by more than 50 points, even before accounting for the effects of the share repurchase program. The reinsurance transaction with CS Life Re will enable Corebridge to completely exit a legacy business line known for its historically volatile GAAP earnings and potential tail risk exposure. As a result, CRBG is likely to significantly reshape its portfolio and boost shareholder value with proceeds derived from the transaction while reducing its risk exposure. The majority of the proceeds from the transaction will be returned to shareholders through share repurchases, while the remaining portion will be used to support future organic growth initiatives. In tandem with the reinsurance transaction announcement, the board of directors of Corebridge sanctioned a $2 billion increase to its existing share repurchase authorization. CRBG actively engages in share repurchases and management has authorized increases in share buyback programs over the past few years, evident by a $2 billion increase each in April 2024 and February 2025. As of May 1, 2025, around $2.3 billion remained under its share repurchase authorization. Shares of Corebridge have gained 20.2% in the past year compared with the industry's 10.7% growth. CRBG currently carries a Zacks Rank #3 (Hold). Image Source: Zacks Investment Research Some better-ranked stocks in the insurance space are MGIC Investment Corporation MTG, Old Republic International Corporation ORI and Skyward Specialty Insurance Group, Inc. SKWD. While MGIC Investment sports a Zacks Rank #1 (Strong Buy), Old Republic and Skyward Specialty carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here. MGIC Investment's earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 15.88%. The Zacks Consensus Estimate for MTG's 2025 earnings indicates a 0.3% rise, while the estimate for revenues implies an improvement of 1.3% from the respective prior-year figures. The consensus mark for MTG's earnings has moved 0.7% north in the past seven days. Shares of MGIC Investment have gained 28.2% in the past year. Old Republic's earnings surpassed estimates in each of the last four quarters, the average surprise being 39.61%. The Zacks Consensus Estimate for ORI's 2025 earnings indicates a 5.6% rise, while the estimate for revenues implies an improvement of 7.8% from the respective prior-year figures. The consensus mark for ORI's earnings has moved 0.6% north in the past 60 days. Shares of Old Republic have gained 23.3% in the past year. Skyward Specialty's earnings outpaced estimates in each of the trailing four quarters, the average surprise being 12.86%. The Zacks Consensus Estimate for ORI's 2025 earnings indicates a 15% rise, while the estimate for revenues implies an improvement of 16.3% from the respective prior-year figures. The consensus mark for SKWD's earnings has moved up 2.9% in the past 60 days. Shares of Skyward Specialty have gained 56.8% in the past year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report MGIC Investment Corporation (MTG) : Free Stock Analysis Report Old Republic International Corporation (ORI) : Free Stock Analysis Report Corebridge Financial, Inc. (CRBG) : Free Stock Analysis Report Skyward Specialty Insurance Group, Inc. (SKWD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
18 hours ago
- Business
- Yahoo
Corebridge enters $2.8B reinsurance agreement with CS Life Re
Corebridge (CRBG) Financial earlier announced that it has entered into an agreement with CS Life Re, a subsidiary of Venerable Holdings, to reinsure all the variable annuities of its Individual Retirement business, with account value totaling $51B as of March 31, 2025. The transaction is valued at $2.8B, consisting of both ceding commission and capital release, and will generate approximately $2.1B of net distributable proceeds after-tax for Corebridge. Kevin Hogan, President and CEO 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 $2B increase to our share repurchase authorization in connection with this transaction.' Shares of Corebridge Financial are up nearly 6% to $34.97 in morning trading. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See Insiders' Hot Stocks on TipRanks >> Read More on CRBG: Disclaimer & DisclosureReport an Issue Corebridge Financial Announces Major Reinsurance Transaction Corebridge Financial Elects Directors at Annual Meeting Corebridge participates in a conference call with JPMorgan Corebridge price target raised to $37 from $32 at Morgan Stanley Soros buys JPMorgan, exits Alibaba in Q1
