OLDWICK, N.J.--(BUSINESS WIRE)--AM Best has commented that the Credit Ratings (ratings) of the members of Talcott Resolution Group (Talcott Resolution) remain unchanged following the Dec. 3, 2021 announcement that Allianz Life Insurance Company of North America (Allianz Life) has entered into an agreement to reinsure a $35 billion fixed index annuity (FIA) portfolio with Resolution Life Group Holdings LP (Resolution Life) and affiliates of Sixth Street, including Talcott Resolution and its Bermuda affiliate.
The transaction is the first significant block acquisition for Talcott Resolution in recent years and follows its recent variable annuity flow reinsurance transaction with Lincoln National Corporation that covers business written from April 1, 2021 through June 30, 2022 to a maximum of $1.5 billion.
Talcott Resolution was recently acquired by Sixth Street, a leading global investment firm with over $55 billion in assets under management and committed capital from a consortium of investors. AM Best notes that the transaction will significantly expand Talcott Resolution’s balance sheet but expects the company will continue to maintain a very strong balance sheet strength position, with the support of its parent and potential future investors. Under its new ownership, AM Best anticipates that Talcott Resolution will engage in future transaction activity as it executes its strategy of engaging in reinsurance flow transactions and block acquisitions.
Under the terms of the transaction, Talcott Resolution and its Bermuda affiliate will assume $20 billion of the fixed indexed annuity liabilities while Resolution Life will assume the remaining $15 billion. Upon closing, which is expected by year-end 2021, Talcott and its affiliates will manage approximately $111 billion in liabilities and surplus on a pro-forma basis. Allianz Life will continue to manage administration of the policies in the portfolio with Pacific Investment Management Company, LLC (PIMCO) and Allianz Global Investors remaining the primary asset managers of the reinsured business.
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