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Reinsurance Group, Voya Extend Ties with $90 Billion Deal

Reinsurance Group of America, Inc.RGA announced that it will reinsure a block of in-force term insurance policies of Voya Financial VOYA . The transaction encompasses reinsuring about $90 billion of life insurance in force, comprising 155,000 policies written by Voya between 2008 and 2011.

The transaction, pending closing conditions, is expected to culminate in the final quarter of this year.

Reinsurance Group and Voya Financial already have a long-standing relationship. The recent transaction, which will address Voya's capital and risk management needs, further establishes the company's commitment to long-term partnerships. Concurrently, Reinsurance Group will stand to benefit by leveraging its skill and understanding of the U.S. Mortality Market.

Reinsurance Group is a globally acclaimed life and health reinsurance company having about $2.9 trillion of life reinsurance in force. Significant value embedded in the in-force business is anticipated to generate predictable long-term earnings.

The life insurer has been undertaking several initiatives to ramp up its organic and inorganic growth profile. Last month, the company acquired Elite Sales Processing, Inc. in an attempt to bolster its underwriting business in the U.S. Also, Leidsche Levensverzekeringen Maatschappij N.V., the Netherlands-based life insurance subsidiary of Reinsurance Group has agreed to purchase the life insurance policy portfolio of PGGM Levensverzekeringen. In June, the life insurer closed a transaction pursuant to which it will provide additional longevity risk protection and capital benefit on reserves of about €12 billion to Delta Lloyd Levensverzekering N.V., the Dutch life insurance arm of the Delta Lloyd Group.

Reinsurance Group's earnings per share in the second quarter missed the Zacks Consensus Estimate and declined year over year due to an adverse foreign currency effect, a higher effective tax rate and higher claims in Australia and the U.S. The Zacks Consensus Estimate has also been moving south since the Zacks Rank #3 (Hold) life insurer delivered weak quarterly results. The same decreased 1.7% to $8.32 for 2015 and 0.8% to $9.22 for 2016. However, the company's initiatives to brace up its operational performance might encourage analysts to raise their estimates and exert an upward pressure on the Zacks Rank.

Stocks to Consider

Some better-ranked life insurers are Primerica, Inc. PRI and StanCorp Financial Group Inc. SFG . Both stocks carry a Zacks Rank #2 (Buy).

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STANCORP FNL CP (SFG): Free Stock Analysis Report

REINSURANCE GRP (RGA): Free Stock Analysis Report

PRIMERICA INC (PRI): Free Stock Analysis Report

VOYA FINANCIAL (VOYA): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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