RGA reinsures nearly $3bn Horace Mann annuity business block

Reinsurance Group of America (RGA) has completed a $2.9 billion annuity reinsurance transaction with Horace Mann Life Insurance Company, effective April 1, 2019.

Under the agreement, a subsidiary of RGA will reinsure a block of US annuity business and Horace Mann will continue to service and administer the policies.

The block of policy liabilities relates to legacy US individual annuities written in 2002 or earlier. It includes $2.2 billion of fixed annuities that represented approximately 50 percent of Horace Mann’s fixed annuity assets under management at March 31, 2019, and $700 million of variable annuities.

Horace Mann will continue to service and administer approximately 54,000 policies that are being reinsured.

“We are pleased to expand the strong partnership with Horace Mann and to advance RGA’s overarching long-term strategy to grow our asset-intensive business,” said John Laughlin, executive vice president, global financial solutions, RGA. “This transaction is another solid example of RGA’s dedication to working with clients to meet their capital and risk management objectives.”

According to Horace Mann president and CEO Marita Zuraitis: “Reinsuring our legacy annuity business is a win-win for our shareholders and our policyholders. We will continue to service and administer the reinsured annuity policies, so our educators will be able to rely on the customer experience they have always known. And for Horace Mann, the reinsurance agreement reduces our exposure to interest rate fluctuations, releases capital that can be redeployed to provide more solutions for educators and increases long-term earnings for our shareholders."

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