Dai-ichi Life Holdings’ Strategic Reinsurance Agreement
Dai-ichi Life Holdings Inc. has announced a significant development involving its US subsidiary, Protective Life Corporation. The company has entered into a strategic reinsurance deal with Resolution Life Group Holdings Ltd., aiming to bolster earnings and optimize capital utilization. Under this agreement, Protective Life will transfer approximately US$9.7 billion in policy reserves to Resolution Life, shedding some of its financial obligations.
This arrangement, detailed in a recent statement by Dai-ichi, involves the reinsurance of structured settlement annuities and secondary guaranteed universal life policies that are currently in runoff. While the assets tied to this contract will remain under Protective Life’s management, income and expenses—including any investment gains or losses—will be transferred to Resolution Life. However, Protective will continue to oversee the administration of these policies, ensuring seamless service for policyholders.
According to Bloomberg, Dai-ichi anticipates that this transaction will lead to an improvement in adjusted profit by approximately US$30 million to US$40 million in the medium to long term. This move is in line with a broader trend among Japanese insurers who are looking to alleviate financial pressures ahead of new capital regulations set to commence in April 2025.
Protective Life’s Strategic Growth
Rich Bielen, President and CEO of Protective Life, remarked, “This transaction signifies a pivotal milestone, allowing us to generate capital that can be invested for ongoing growth. We remain committed to expanding life insurance sales through our valued distribution partners.”
Resolution Life is poised to come under the ownership of Nippon Life Insurance Co. later in 2025. The firm views this agreement as a strategic step to bolster its presence in the US market. Warren Balakrishnan, CEO of US, Resolution Life, stated, “Our substantial capital strength and proven execution record provide a strong, long-term partner for Protective Life and its policyholders.”
The transaction is anticipated to be finalized in 2025, pending customary regulatory approvals. Financial advisors for the deal included Wells Fargo for Protective and JP Morgan for Resolution Life. Legal counsel was provided by Willkie Farr & Gallagher LLP and Debevoise & Plimpton LLP, respectively.
