US life insurer CNO forms Bermuda-based captive
Long term insurer CNO Financial Group has formed a Bermuda-based captive reinsurer to enable it to reinsure $6.2 billion of in-force fixed indexed annuity reserves, the company announced.
Carmel, Indiana-based CNO made the announcement as it released its third quarter results this week.
CNO said the company would also reinsure new indexed annuity business.
“Implementation of the initial reinsurance transaction is in process, with an effective date of October 1, 2023,” the company said.
In February, the company announced its plans to form the reinsurer and said it would cede a portion of its fixed indexed annuity in-force and up to 100% of new business.
It said the captive would not utilise third-party capital or underwrite third-party business.
It said the goal of the company was to “enhance competitive position through a structure that enables disciplined capital deployment” and to increase capital efficiency.
CNO reported net income of $167.3 million, or $1.46 per diluted share, in the third quarter compared to $175.9 million, or $1.52 per diluted share, in the same period in 2022.
"We are pleased with our financial performance in the quarter, led by both strong underwriting margins and net investment income results," said Gary C. Bhojwani, chief executive officer.
He added: "CNO is pleased to launch our Bermuda affiliate and we are in the process of implementing our initial reinsurance transaction. We remain well-positioned to execute on our strategy to serve middle-income America and deliver shareholder value."
