02.11.22
MetLife Explores Sale of Variable Annuity Business — Sources
by: David French
MetLife Inc. is reportedly exploring the divestment of its U.S. variable annuity book as it seeks to free up resources to invest in higher-growth parts of its business. The insurer is working with an investment bank on the plan, which is in its early stages, according to people familiar with the matter. MetLife does not disclose the size of its variable annuity business. Its overall annuity book — including both fixed rate and variable policies — stood at $58.23 billion at the end of 2021. A sale would give MetLife only a fraction of whatever book value is divested in terms of proceeds. However, the financial benefit of offloading the policies could still be substantial because of the capital released, tax implications and other financial enhancements, the sources said. U.S. insurers have in recent years been offloading closed books of annuity business, which require significant capital to be put aside and provide limited revenue growth as no new policies are being written. Insurers have found willing buyers in private equity firms and their insurance arms, which can use the cash flow generated from the policies to invest in their suite of credit and other products.
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