Reinsurance Group of America (RGA) is actively working on transactions for its joint venture, backed by third-party capital, life reinsurance and annuity company Langhorne Re, according to CEO Anna Manning.
Speaking recently, Manning explained that the company’s deal portfolio remains strong.
Langhorne Re was launched by RGA in conjunction with joint venture partner RenaissanceRe (RenRe), Bermuda reinsurer, and an experienced third-party reinsurance capital manager.
Langhorne Re, what released early 2018, represents the premier life and annuity reinsurance company for RenRe, which is best known for its joint ventures focused on real estate catastrophe reinsurance with pension investors and their ILS funds or structures.
The reinsurer was established to increase RGA’s ability to participate in large ongoing block life transactions., aided by the support of third-party institutional investors from the capital markets. The vehicle will also generate commission income for the joint venture partners and features investment capital with a longer-term horizon than your more typical insurance-linked securities (ILS) JV focused on catastrophe risk.
But, a first transaction has been elusive, in part due to the high levels of competition observed in the market for the very large transactions of the type of life and annuities that Langhorne Re is targeting.
Langhorne Re is ready to go and has been actively offending for opportunities in the market for the past year, but so far the deals have not proven attractive enough to be completed, or have not been won.
Potential deal projects remain strong in all regions where RGA operates, Manning said.
However, competition remains strong and in the US market in particular there are many competitors, while there is also a good variety of offer sizes on offer.
But, “We are getting our fair share,” Manning said.
Before I go on to explain that, “we are also working on Langhorne deals, and we are optimistic about completing the Langhorne transactions.”
Overall, Manning said RGA feels good about the business and is optimistic about moving forward.
Now over three years old and without a complete transaction, Langhorne Re’s strategy has yet to deliver on those involved or its investors.
However, the concept of bringing third-party capital into large annuity and life reinsurance deals has been tested by others, with players like Athene and Global Indemnity, both with sidecar-like structures bringing in additional capital from third-party investors alongside the your own for transactions.
It seems likely that it is only a matter of time before RGA finds and wins a suitable Langhorne Re transaction. But with other venues available to invest in these types of deals, we imagine investors are likely to be increasingly interested in see the transactions start to flow.