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FOR IMMEDIATE RELEASE
OLDWICK - JANUARY 24, 2019 04:49 PM (EST)
AM Best has commented that the Credit Ratings of Great-West Lifeco, Inc. (Great-West) (Winnipeg, Manitoba) and its insurance subsidiaries remain unchanged following the announcement of a reinsurance agreement with subsidiaries of Protective Life Corporation (Protective).
Based on the terms of the agreement, Great-West estimates that the transaction will result in an after-tax transaction value of approximately USD 1.2 billion (CAD 1.6 billion), excluding one-time expenses and subject to contingent post-closing adjustments. The value includes a significant positive ceding commission to their U.S. entities and a capital release of approximately USD 400 million (CAD 530 million).
The business to be transferred, which is marketed under the Great-West Financial brand, includes bank-owned and corporate-owned life insurance, single premium life insurance, individual annuities, and closed block life insurance and annuities. This business contributed approximately USD 95 million (CAD 120 million), to Great-West’s net earnings for the first three quarters of 2018.
The deal consists of seasoned blocks of business from Great-West Life & Annuity Insurance Company, Great-West Life & Annuity Insurance Company of New York, The Canada Life Assurance Company (U.S. Branch) and The Great-West Life Assurance Company (U.S. Branch).
The transaction is targeted to close in the second quarter of 2019 and allows Great-West to focus on the retirement and asset management markets in the U.S. AM Best notes that the transaction, while sizable, has a modest impact to Great-West’s overall financial position and business profile given the company’s large global footprint and product diversification.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.
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