Resolution reinsures life policies as Lincoln derisks

Resolution Life US Holdings, the US subsidiary of Bermuda domiciled Resolution Life Group Holdings, has announced a $9.4 billion reinsurance transaction with The Lincoln National Life Insurance Company.

Under the deal, the latter, part of Fortune 250 business Lincoln National Corporation, will cede $9.4 billion in reserves to Resolution subsidiary Security Life of Denver Insurance Company (SLDC) but retain administration of the policies.

The deal includes $8.1bn of reserves backing corporate-owned life insurance, bank-owned life insurance and other products sold through Lincoln’s executive benefits program and $1.3bn for universal life policies. The policies account for approximately one-eighth of Lincoln’s total life reserves. It expects the deal to raise $1.2bn capital to be used to finance share buybacks and pay down debt.

Resolution Life, a manager of in-force life insurance businesses, bought Security Life of Denver Insurance Company earlier this year as part of the acquisition of Voya Financial’s individual life in-force business. Since 2018, Resolution Life has raised almost US$5bn in capital.

Matthew Grove, Resolution Life US and SLD chief executive officer, said: “Executing this transaction with Lincoln shows the strength of Resolution Life’s reinsurance offering in the US. It is a great example of our holistic approach to managing diversified insurance risks at scale, and it will contribute meaningfully to the momentum of our US business after the completion of our acquisition of Security Life of Denver earlier this year.”