Reinsurer Hungry for Big Life and Annuity Blocks

Reinsurance Group of America Inc. is eager to start using its new Langhorne Re affiliate to make reinsurance deals involving big blocks of in-force life insurance and annuity business.

Anna Manning, the Chesterfield, Missouri-based reinsurer’s president, talked about the company’s hunger for big blocks Tuesday, during a conference call with securities analysts.

RGA set up the Langhorne affiliate, with help from another company, RenaissanceRe Holdings Ltd., earlier this month. RGA will be able to fuel Langhorne with its own and cash from outside entities.

(Related: Life Reinsurer Is Going Out for Business)

In the past, Manning said, RGA has often had to team up with other reinsurers when it was bidding for big reinsurance deals. High-quality insurers seeking reinsurance deals often “prefer cleaner options” involving just one other company, Manning said.

Langhorne will allow “us to pursue these larger deals independently, without having to partner with another buyer,” Manning said.

The new Tax Cuts and Jobs Act (TCJA) should also help, by putting RGA on a more even footing, in terms of taxation, with non-U.S. players, Manning said.

In the past, some reinsurers that tried to expand rapidly ran into trouble when they assumed responsibility for what turned out to be unexpectedly risk blocks of business.

Manning said during the call that RGA will be seeking the big deals with long-term reinsurance clients. “They will not be new risks to us,” she said. “We’re going to look for those deals that fit our risk appetite.”

RGA held the call to discuss its earnings release for the fourth quarter of 2017, and for all of 2017.