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What would you like to know
- Oliver Bäte sees opportunities in the sales of variable annuities.
- Talcott Resolution will provide approximately $ 20 billion in reinsurance and Resolution Life will provide approximately $ 14 billion.
- PIMCO and Allianz Global Investors will continue to be the primary asset managers for reinsured annuities.
Allianz announced on Friday that it has arranged to reinsure more than $ 34 billion in fixed annuities in the United States and that it hopes to reduce the percentage of reserves supporting guaranteed savings and annuity products.
Executives at the Munich-based insurer discussed the measures at an investor event. The event was webcast live and a recording is available here.
Oliver Bäte, CEO of Allianz, told investors the company was happy with the earnings of its Allianz Life Insurance Co, of North America unit, but unhappy with the large amount of capital required to support non-variable indexed annuity guarantees.
“It’s the Allianz business that consumes most of the absolute amount of capital, more than any other, so we knew we had to do something,†Bäte said.
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The reinsurance system
Resolution Life plans to reinsure $ 26 billion in annuities from Allianz Life and transfer responsibility for $ 12 billion in annuities to Talcott Resolution Life Insurance Co., a Sixth Street subsidiary, through the retrocession agreement. .
Talcott expects to end up reinsuring around $ 20 billion in fixed annuities from Allianz Life, through a direct reinsurance deal and the Resolution Life retrocession deal.
A reinsurer provides insurance to an insurer. A retrocessionaire provides insurance for a reinsurer.
Including the Allianz Life deal, Resolution Life will have approximately $ 90 billion in assets under management, and Talcott Resolution and its affiliates will have approximately $ 111 billion in insurance and annuity liabilities and surpluses under management. management, according to Allianz.
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