NU Online News Service, Sept. 23, 2003, 4:03 p.m. EDT – Reinsurance Group of America Inc., St. Louis, has agreed to acquire the traditional U.S. life reinsurance business of Allianz Life Insurance Company of North America, Minneapolis, through a coinsurance arrangement.
RGA will pay Allianz Life a ceding commission of $310 million. RGA also has agreed to pursue the possibility of substituting itself for Allianz Life in the Allianz Life reinsurance contracts, the companies say.
The companies hope to complete the deal later this year, but the effective date would be July 1, 2003.
Allianz Life, a U.S. arm of Allianz A.G., Munich, says it is selling the reinsurance block so that it can focus on other markets.
RGA says it is acquiring the Allianz Life block to add $240 billion of in-force life reinsurance business to its own book of business. RGA expects the Allianz Life block to generate more than $400 million in annual premiums.
RGA, which is partly owned by MetLife Inc., New York, might issue debt or stock to help pay for the deal, RGA says.