Protective and Resolution Life Enter $9.7B Strategic Reinsurance Agreement
Protective Life Corporation (“Protective”), a U.S. subsidiary of Dai-ichi Life Holdings, Inc. (TSE:8750), has announced the signing of a major strategic reinsurance agreement with Resolution Life, a global insurance group known for its expertise in managing life insurance and annuity portfolios. Under this agreement, Protective Life Insurance Company and West Coast Life Insurance Company, both operating subsidiaries of Protective, will cede select blocks of structured settlement annuities and secondary guaranteed universal life (SGUL) policies currently in runoff to Resolution Life. The transaction is valued at approximately $9.7 billion in reserves.
Through this partnership, Protective aims to optimize its capital structure, reduce exposure to market risk, and unlock capital for reinvestment in core business areas. The agreement aligns with Protective’s broader strategy to enhance financial flexibility while continuing to deliver value to policyholders and distribution partners. Notably, Protective will maintain administrative responsibilities for the ceded policies, ensuring that policyholders experience no disruption in service.
Strategic Rationale Behind the Agreement
The reinsurance transaction reflects Protective’s ongoing commitment to prudent capital management, growth, and operational efficiency. By transferring liabilities associated with legacy structured settlement annuities and SGUL policies, Protective strengthens its financial position and gains additional capacity to invest in business expansion. The agreement enables the company to focus on key growth areas, including its core Protection, Retirement, Asset Protection, and Employee Benefits businesses. Additionally, the transaction supports Protective’s efforts to enhance risk management by mitigating exposure to interest rate fluctuations and other financial uncertainties associated with the runoff policies.
Commenting on the agreement, Protective’s President and CEO, Rich Bielen, stated:
“At Protective, we are thrilled to announce this strategic reinsurance agreement with Resolution Life. This transaction represents an important milestone, allowing us to generate capital that can be invested for continued growth. We remain committed to growing life insurance sales through our valued distribution partners and look forward to continuing to provide exceptional service to our customers. We are excited about the opportunities it brings for Protective, our customers, and our partners.”
Resolution Life’s Perspective
Resolution Life, a leading global insurer specializing in acquiring and managing life insurance and annuity businesses, brings significant financial strength and expertise to the agreement. With a track record of successfully managing large-scale insurance portfolios, Resolution Life provides a reliable, long-term partnership for Protective and its policyholders.
Warren Balakrishnan, CEO of Resolution Life’s U.S. division, remarked:
“This strategic transaction with Protective showcases our ability to manage complex life and annuity products at scale. Our substantial capital strength and proven execution record provide a strong, long-term partner for Protective Life and its policyholders. This transaction is a great example of our reinsurance offering to the U.S. life and annuity market.”
By assuming responsibility for the in-scope insurance blocks, Resolution Life expands its footprint in the U.S. market and reinforces its role as a trusted reinsurer for legacy insurance policies. The company’s business model is built on acquiring and managing life insurance portfolios efficiently, ensuring stability and long-term value for all stakeholders involved.
Key Benefits of the Transaction
The Protective-Resolution Life agreement presents multiple advantages for both organizations and their policyholders:
- Enhanced Capital Efficiency: By ceding $9.7 billion in reserves, Protective gains additional financial flexibility to reinvest in strategic growth initiatives and new business opportunities.
- Reduced Market Risk: The transaction enables Protective to mitigate exposure to economic volatility and interest rate risk associated with the runoff insurance blocks.
- Uninterrupted Customer Service: Protective retains policy administration responsibilities, ensuring that policyholders continue to receive seamless service without any changes to their existing policies.
- Strengthened Business Focus: Protective can allocate resources more effectively toward its core Protection, Retirement, Asset Protection, and Employee Benefits segments.
- Expansion of Resolution Life’s Portfolio: Resolution Life strengthens its presence in the U.S. insurance and annuity sector, reinforcing its position as a leading provider of reinsurance solutions for complex insurance liabilities.
Transaction Timeline and Regulatory Approval
The completion of this strategic reinsurance agreement is expected in 2025, pending regulatory approvals and customary closing conditions. Given the complexity and scale of the transaction, both companies are committed to working closely with regulators to ensure a smooth transition.
Advisors and Legal Counsel
Several financial and legal advisors played a key role in structuring and executing this transaction:
- Protective Life Corporation: Wells Fargo served as the financial advisor, while Willkie Farr & Gallagher LLP provided legal counsel.
- Resolution Life: J.P. Morgan acted as the financial advisor, with Debevoise & Plimpton LLP serving as legal counsel.
Protective’s Commitment to Long-Term Growth
Protective has consistently demonstrated a commitment to strategic growth, disciplined risk management, and customer-centric innovation. This reinsurance transaction is part of a broader effort to enhance Protective’s ability to serve its customers while maintaining financial strength. Despite the transfer of select runoff policies, Protective remains fully dedicated to its life insurance offerings, including its existing no-lapse guaranteed universal life (GUL) policies. The company continues to support its distribution partners and policyholders by delivering high-quality financial protection solutions.
The $9.7 billion reinsurance agreement between Protective Life Corporation and Resolution Life represents a significant step forward for both companies. It allows Protective to optimize its capital structure, manage financial risk effectively, and focus on core business growth. Simultaneously, Resolution Life expands its footprint in the U.S. market, leveraging its expertise to manage complex insurance portfolios. As the transaction moves toward regulatory approval and finalization, both organizations reaffirm their commitment to delivering long-term value to policyholders, investors, and business partners.
By retaining administration of the policies, Protective ensures a seamless experience for customers while reinforcing its position as a leader in the life insurance industry. The agreement serves as a model for strategic reinsurance transactions, demonstrating how insurers can collaborate to achieve financial stability and growth in an evolving marketplace.
