MetLife, Inc. (NYSE: MET) has wrapped up its previously announced $10 billion variable annuity risk transfer to Talcott Resolution Life Insurance Company, a subsidiary of Talcott Financial Group. The deal is expected to reduce portfolio risk, accelerate the run-off of MetLife’s legacy blocks, and streamline management of its former U.S. Retail segment’s closed blocks.
The transaction carries foregone annual adjusted earnings of roughly $100 million, partially offset by $45 million in expected annual hedge cost savings, according to MetLife. Additionally, MetLife Investment Management will continue to oversee approximately $6 billion of assets under agreements with Talcott, ensuring continuity in asset management while transferring risk exposure.
“This transaction represents the disciplined execution of our risk transfer strategy,” MetLife said, emphasizing its ongoing focus on reducing exposure to legacy variable annuity portfolios.
Why This Matters
Risk transfer deals like this are a growing trend among large insurers looking to offload legacy liabilities, stabilize earnings, and improve capital efficiency. By moving $10 billion in variable annuities off its balance sheet, MetLife mitigates long-term volatility associated with interest rate swings and market performance while retaining investment management opportunities on a portion of the assets.
Talcott, a seasoned player in life insurance and annuities, gains a substantial portfolio, further cementing its presence in the U.S. annuities market. Analysts note that such deals are increasingly popular as insurers recalibrate post-pandemic balance sheets and navigate low-yield environments.
Looking Ahead
While the risk transfer strengthens MetLife’s financial footing, forward-looking statements caution that results may differ due to market volatility, interest rate shifts, or other uncertainties. The company underscores that these deals are part of broader strategic efforts to manage closed-block businesses, optimize capital, and enhance long-term profitability.
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