Equitable Holdings Reinsures 75% of its Individual Life Block with RGA, Enhancing Focus on Growth in Retirement, Asset Management, and Wealth Management
Equitable Holdings (NYSE: EQH) has announced a strategic reinsurance agreement with RGA Reinsurance Company to reinsure 75% of its in-force individual life insurance block. The transaction will generate over $2 billion in value through a positive ceding commission and capital release.
The company plans to redeploy the capital in two main ways: a $1.8 billion tender offer to increase its ownership stake in AllianceBernstein (AB) and $500 million in incremental share repurchases above their 60-70% payout ratio target. AB will continue managing approximately 70% of the general account assets being reinsured.
The transaction, expected to close in mid-2025, will enhance EQH's focus on Retirement, Asset Management, and Wealth Management. While the company expects a GAAP net loss and reduction in book value at close, the transaction is projected to have impact on Non-GAAP operating earnings and cash generation, and be accretive to Non-GAAP operating earnings per share.
Equitable Holdings (NYSE: EQH) ha annunciato un accordo strategico di riassicurazione con RGA Reinsurance Company per riassicurare il 75% del suo portafoglio di polizze vita individuali in corso. La transazione genererà oltre 2 miliardi di dollari in valore grazie a una commissione di cessione positiva e al rilascio di capitale.
L'azienda prevede di riutilizzare il capitale in due modi principali: un offerta pubblica di acquisto da 1,8 miliardi di dollari per aumentare la sua partecipazione in AllianceBernstein (AB) e 500 milioni di dollari in riacquisti di azioni incrementali oltre il loro obiettivo di rapporto di distribuzione del 60-70%. AB continuerà a gestire circa il 70% degli attivi del conto generale riassicurati.
La transazione, prevista per la chiusura a metà 2025, rafforzerà il focus di EQH su Pensioni, Gestione degli Attivi e Gestione della Ricchezza. Sebbene l'azienda preveda una perdita netta GAAP e una riduzione del valore contabile al momento della chiusura, si prevede che la transazione avrà un impatto sugli utili operativi Non-GAAP e sulla generazione di cassa, e sarà accrescitiva per gli utili per azione Non-GAAP.
Equitable Holdings (NYSE: EQH) ha anunciado un acuerdo estratégico de reaseguro con RGA Reinsurance Company para reasegurar el 75% de su bloque de seguros de vida individuales en vigor. La transacción generará más de 2 mil millones de dólares en valor a través de una comisión de cesión positiva y la liberación de capital.
La compañía planea reinvertir el capital de dos maneras principales: una oferta pública de adquisición de 1.8 mil millones de dólares para aumentar su participación en AllianceBernstein (AB) y 500 millones de dólares en recompra de acciones incrementales por encima de su objetivo de ratio de pago del 60-70%. AB seguirá gestionando aproximadamente el 70% de los activos de la cuenta general que están siendo reasegurados.
Se espera que la transacción, que se cierre a mediados de 2025, mejore el enfoque de EQH en Jubilación, Gestión de Activos y Gestión de Patrimonio. Si bien la compañía espera una pérdida neta GAAP y una reducción en el valor contable al cierre, se proyecta que la transacción tendrá un impacto en las ganancias operativas No-GAAP y en la generación de efectivo, y será accretiva para las ganancias por acción No-GAAP.
Equitable Holdings (NYSE: EQH)는 RGA Reinsurance Company와 전략적 재보험 계약을 체결하여 현재 진행 중인 개인 생명 보험 블록의 75%를 재보험한다고 발표했습니다. 이 거래는 긍정적인 양도 수수료와 자본 해제를 통해 20억 달러 이상의 가치를 창출할 것입니다.
회사는 자본을 두 가지 주요 방법으로 재배치할 계획입니다: 18억 달러 규모의 공개 매수 제안을 통해 AllianceBernstein (AB)에서의 소유 지분을 늘리고, 5억 달러의 추가 주식 매입을 통해 60-70% 배당 비율 목표를 초과할 것입니다. AB는 재보험되는 일반 계정 자산의 약 70%를 계속 관리할 것입니다.
2025년 중반에 마감될 것으로 예상되는 이 거래는 EQH의 은퇴, 자산 관리 및 재산 관리에 대한 집중도를 높일 것입니다. 회사는 마감 시 GAAP 순손실과 장부 가치 감소를 예상하지만, 이 거래는 Non-GAAP 운영 수익 및 현금 생성에 긍정적인 영향을 미치고 Non-GAAP 주당 운영 수익에 기여할 것으로 예상됩니다.
Equitable Holdings (NYSE: EQH) a annoncé un accord stratégique de réassurance avec RGA Reinsurance Company pour réassurer 75 % de son portefeuille d'assurances vie individuelles en cours. La transaction générera plus de 2 milliards de dollars de valeur grâce à une commission de cession positive et à une libération de capital.
La société prévoit de réinvestir le capital de deux manières principales : une offre publique d'achat de 1,8 milliard de dollars pour augmenter sa participation dans AllianceBernstein (AB) et 500 millions de dollars en rachats d'actions supplémentaires au-dessus de leur ratio de distribution cible de 60-70 %. AB continuera de gérer environ 70 % des actifs du compte général réassurés.
La transaction, qui devrait se clôturer à la mi-2025, renforcera l'accent d'EQH sur la retraite, la gestion d'actifs et la gestion de patrimoine. Bien que la société s'attende à une perte nette GAAP et à une réduction de la valeur comptable à la clôture, la transaction devrait avoir un impact sur les bénéfices d'exploitation Non-GAAP et la génération de liquidités, et être accretive pour les bénéfices d'exploitation Non-GAAP par action.
Equitable Holdings (NYSE: EQH) hat eine strategische Rückversicherungsvereinbarung mit der RGA Reinsurance Company bekannt gegeben, um 75% seines bestehenden Portfolios an individuellen Lebensversicherungen rückzuversichern. Die Transaktion wird über 2 Milliarden Dollar an Wert durch eine positive Abtretungsprovision und Kapitalfreisetzung generieren.
Das Unternehmen plant, das Kapital auf zwei Hauptarten wieder einzusetzen: ein Rückkaufangebot über 1,8 Milliarden Dollar, um seinen Anteil an AllianceBernstein (AB) zu erhöhen, und 500 Millionen Dollar in zusätzlichen Aktienrückkäufen über ihre Zielquote von 60-70% hinaus. AB wird weiterhin etwa 70% der rückversicherten allgemeinen Konten verwalten.
Die Transaktion, die voraussichtlich Mitte 2025 abgeschlossen wird, wird EQHs Fokus auf Altersvorsorge, Vermögensverwaltung und Vermögensmanagement stärken. Während das Unternehmen mit einem GAAP-Nettoverlust und einer Reduzierung des Buchwerts bei Abschluss rechnet, wird erwartet, dass die Transaktion Auswirkungen auf die Non-GAAP-Betriebsergebnisse und die Cash-Generierung hat und sich positiv auf die Non-GAAP-Betriebsergebnisse pro Aktie auswirkt.
- Generation of over $2 billion in value through reinsurance transaction
- $500 million incremental share repurchases above target payout ratio
- Retention of 70% of asset management through AllianceBernstein
- Expected accretion to Non-GAAP operating earnings per share
- Expected GAAP net loss at transaction close
- Reduction in book value excluding accumulated other comprehensive income
Insights
This strategic reinsurance transaction marks a pivotal transformation for Equitable Holdings, demonstrating a sophisticated approach to capital optimization and business focus. The deal's structure reveals several key strategic advantages:
Capital Efficiency and Strategic Redeployment: The $2 billion capital release represents approximately
Business Mix Enhancement: The transaction strategically reduces exposure to capital-intensive individual life insurance while increasing focus on higher-ROE businesses. This shift aligns with industry trends favoring fee-based revenues over spread-based earnings, potentially leading to higher valuation multiples.
Synergistic Value Creation: The increased ownership in AllianceBernstein creates multiple benefits: enhanced fee capture from asset management, stronger strategic alignment, and improved operational efficiency. The retention of AB's management over most reinsured assets ensures continuity in investment strategy while reducing balance sheet risk.
Financial Impact Analysis: While the transaction will result in a GAAP net loss and reduced book value initially, the expected accretion to Non-GAAP operating earnings per share suggests long-term value creation. The additional
Market Position Strengthening: This transaction positions Equitable more competitively in the high-growth retirement and wealth management sectors, where scale and integrated service offerings are increasingly critical for success. The timing of the deal, expected to close in mid-2025, allows for careful execution while market conditions remain favorable.
Transaction will free over
Capital will be redeployed for incremental share repurchases and to increase Equitable Holdings’ ownership stake in AllianceBernstein (“AB”)
Increases the percentage of earnings and cash flow from asset and wealth management businesses
Equitable Holdings, Inc. (NYSE: EQH), the leading financial services holding company of Equitable, AllianceBernstein and Equitable Advisors, announced today that certain of its insurance company subsidiaries1 have entered into an agreement with RGA Reinsurance Company (“RGA”) to reinsure
This morning, the Company also announced its intention to increase its ownership stake in AB through a tender offer to purchase up to
“We are very pleased to have reached agreement with RGA on this transaction, which creates compelling strategic and financial value for Equitable, is accretive to our 2027 financial targets, and is a good outcome for our policyholders. The transaction enhances our focus on Retirement, Asset Management, and Wealth Management, which are high return on capital businesses with attractive growth prospects where we have a clear right to win. We’re particularly excited about the opportunity to increase our ownership in AllianceBernstein and capture more of the strong synergies between the two companies as we firmly believe that combining insurance and asset management generates value,” said Mark Pearson, President and Chief Executive Officer of Equitable Holdings.
The transaction has been approved by the Equitable Holdings Board of Directors and is expected to close in mid-2025, subject to customary closing conditions, including receipt of regulatory approvals.
Transaction Highlights
Key Terms:
-
Equitable is reinsuring
75% of its individual life insurance block on a pro-rata basis. -
As part of the transaction, AB is expected to continue managing approximately
70% of the general account assets being reinsured.
Financial Impacts:
-
Will generate over
$2 billion - Based on current markets, we estimate a GAAP net loss at close and a reduction in book value excluding accumulated other comprehensive income.
- Following the redeployment of capital, we expect that the transaction will have limited impact on Non-GAAP operating earnings3 and cash generation and be accretive to Non-GAAP operating earnings per share.
Barclays has served as financial advisor with Willkie Farr & Gallagher LLP acting as legal counsel to Equitable Holdings in connection with this transaction. Oliver Wyman served as actuarial advisor for Equitable.
Conference Call
Equitable Holdings will host a conference call at 8 a.m. ET on Monday, February 24, 2025 to discuss the transaction. The conference call webcast along with a presentation will be accessible on the Company’s Investor Relations website at ir.equitableholdings.com. Please log on to the webcast at least 15 minutes prior to the call to download and install any necessary software.
To register for the conference call, please use the following link: EQH Strategic Update
After registering, you will receive an email confirmation including dial in details and a unique conference call code for entry. Registration is open through the live call. To ensure you are connected for the full call we suggest registering a day in advance or at minimum 15 minutes before the start of the call.
A webcast replay will be made available on the Equitable Holdings Investor Relations website at ir.equitableholdings.com.
About Equitable Holdings
Equitable Holdings, Inc. (NYSE: EQH) is a leading financial services holding company comprised of complementary and well-established businesses, Equitable, AllianceBernstein and Equitable Advisors. Equitable Holdings has
Note Regarding Forward-Looking Statements
This press release contains forward-looking statements. Words such as “expects,” “believes,” “anticipates,” “forecasts,” “intends,” “seeks,” “aims,” “plans,” “assumes,” “estimates,” “projects,” “should,” “would,” “could,” “may,” “will,” “shall” or variations of such words are generally part of forward-looking statements. Forward-looking statements are made based on management’s current expectations and beliefs concerning future developments and their potential effects upon Equitable Holdings, Inc. (“Holdings”) and its consolidated subsidiaries. “We,” “us” and “our” refer to Holdings and its consolidated subsidiaries, unless the context refers only to Holdings as a corporate entity. There can be no assurance that future developments affecting Holdings will be those anticipated by management. Forward-looking statements include, without limitation, all matters that are not historical facts.
These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others: (i) conditions in the financial markets and economy, including the impact of geopolitical conflicts, changes in tariffs and trade barriers, and related economic conditions, equity market declines and volatility, interest rate fluctuations, impacts on our goodwill and changes in liquidity and access to and cost of capital; our ability to satisfy the customary closing conditions in connection with the reinsurance transaction described herein; (ii) operational factors, including reliance on the payment of dividends to Holdings by its subsidiaries, protection of confidential customer information or proprietary business information, operational failures by us or our service providers, potential strategic transactions, changes in accounting standards, and catastrophic events, such as the outbreak of pandemic diseases; (iii) credit, counterparties and investments, including counterparty default on derivative contracts, failure of financial institutions, defaults by third parties and affiliates and economic downturns, defaults and other events adversely affecting our investments; (iv) our reinsurance and hedging programs; (v) our products, structure and product distribution, including variable annuity guaranteed benefits features within certain of our products, variations in statutory capital requirements, financial strength and claims-paying ratings, state insurance laws limiting the ability of our insurance subsidiaries to pay dividends and key product distribution relationships; (vi) estimates, assumptions and valuations, including risk management policies and procedures, potential inadequacy of reserves and experience differing from pricing expectations, amortization of deferred acquisition costs and financial models; (vii) our Asset Management segment, including fluctuations in assets under management and the industry-wide shift from actively-managed investment services to passive services; (viii) recruitment and retention of key employees and experienced and productive financial professionals; (ix) subjectivity of the determination of the amount of allowances and impairments taken on our investments; (x) legal and regulatory risks, including federal and state legislation affecting financial institutions, insurance regulation and tax reform; (xi) risks related to our common stock and (xii) general risks, including strong industry competition, information systems failing or being compromised and protecting our intellectual property. Forward-looking statements should be read in conjunction with the other cautionary statements, risks, uncertainties and other factors identified in Holdings’ Annual Report on Form 10-K for the year ended December 31, 2024 and in Holdings’ subsequent filings with the Securities and Exchange Commission. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law.
Additional Information and Where to Find It
This press release is provided for informational purposes only and does not constitute an offer to purchase or a solicitation of an offer to sell any securities, nor is it a substitute for the tender offer materials that will be filed with the SEC, including among other materials, a tender offer statement on Schedule TO containing an Offer to Purchase, the related Letter of Transmittal and other materials relating to the tender offer. AB Unitholders are urged to read carefully and in their entirety the information in the Offer to Purchase and in the Letter of Transmittal (as they may be amended or supplemented), including the purposes and effects of the tender offer, because they will contain important information that unitholders should consider before making any decision regarding the tender offer. The Offer to Purchase and related Letter of Transmittal will be made available free of charge on the SEC's website at www.sec.gov.
Reference to the 1859 founding applies specifically and exclusively to Equitable Financial Life Insurance Company (NY, NY).
Exhibit 1
Use of Non-GAAP Financial Measures
In addition to our results presented in accordance with
Non-GAAP Operating Earnings
Non-GAAP Operating Earnings is an after-tax Non-GAAP financial measure used to evaluate our financial performance on a consolidated basis that is determined by making certain adjustments to our consolidated after-tax net income attributable to Holdings. The most significant of such adjustments relates to our derivative positions, which protect economic value and statutory capital, and the variable annuity product MRBs. This is a large source of volatility in net income.
Non-GAAP Operating Earnings equals our consolidated after-tax net income attributable to Holdings adjusted to eliminate the impact of the following items:
- Items related to variable annuity product features, which include: (i) changes in the fair value of MRB and purchased MRB, including the related attributed fees and claims, offset by derivatives and other securities used to hedge the MRB which result in residual net income volatility as the change in fair value of certain securities is reflected in OCI and due to our statutory capital hedge program; and (ii) market adjustments to deposit asset or liability accounts arising from reinsurance agreements which do not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk;
- Investment (gains) losses, which includes credit loss impairments of securities/investments, sales or disposals of securities/investments, realized capital gains/losses and valuation allowances;
- Net actuarial (gains) losses, which includes actuarial gains and losses as a result of differences between actual and expected experience on pension plan assets or projected benefit obligation during a given period related to pension, other postretirement benefit obligations, and the one-time impact of the settlement of the defined benefit obligation;
- Other adjustments, which primarily include restructuring costs related to severance and separation, lease write-offs related to non-recurring restructuring activities, COVID-19 related impacts, net derivative gains (losses) on certain Non-GMxB derivatives, net investment income from certain items including consolidated VIE investments, seed capital mark-to-market adjustments, unrealized gain/losses and realized capital gains/losses from sales or disposals of select securities, certain legal accruals; a bespoke deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market, which disposed of the risk of additional COI litigation by that entity related to those UL policies, impact of the annual actuarial assumption updates attributable to LFPB when the majority of the impact relates to the non-core business; and
- Income tax expense (benefit) related to the above items and non-recurring tax items, which includes the effect of uncertain tax positions for a given audit period and changes to the deferred tax valuation allowance.
Because Non-GAAP Operating Earnings excludes items that can be distortive or unpredictable, management believes that this measure enhances the understanding of the Company’s underlying drivers of profitability and trends in our business, thereby allowing management to make decisions that will positively impact our business.
We use the prevailing corporate federal income tax rate of
Non-GAAP Operating EPS
Non-GAAP Operating Earnings per common share is calculated by dividing Non-GAAP Operating Earnings less preferred stock dividends by diluted common shares outstanding.
____________________
1 Equitable Financial Life Insurance Company, Equitable Financial Life Insurance Company of America and Equitable Financial Life and Annuity Company.
2 The Board of Directors authorized an additional
3 This press release includes references to certain Non-GAAP financial measures. Please refer to Exhibit 1 for more information on these measures.
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Investor Relations
Erik Bass
(212) 314-2476
IR@equitable.com
Media Relations
Laura Yagerman
(212) 314-2010
mediarelations@equitable.com
Source: Equitable Holdings, Inc.
FAQ
What is the value of EQH's reinsurance deal with RGA?
How much of EQH's life insurance block is being reinsured?
When will the EQH-RGA reinsurance transaction close?
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What is the impact of the reinsurance deal on EQH's earnings?
