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Investing.com - Corebridge Financial (NYSE:CRBG), an $18.28 billion market cap insurer with $16.55 billion in revenue, announced Monday it will reinsure its entire variable annuity block, valued at approximately $51 billion in assets under management, to Venerable, a subsidiary of Apollo (NYSE:APO). According to InvestingPro data, the company has maintained profitability over the last twelve months and currently offers a 2.9% dividend yield.
The transaction includes approximately $5 billion in general account value on a 100% coinsurance basis and roughly $46 billion of separate accounts on a modified coinsurance basis, with Corebridge continuing to administer and service the divested policies.
The deal, expected to close in the second half of 2025, will generate $2.1 billion in distributable proceeds for Corebridge, with a total deal value of $2.8 billion that includes a $2.2 billion ceding commission and a $0.5 billion statutory capital release, offset by approximately $0.6 billion in taxes and other costs.
Corebridge plans to deploy the proceeds for share buybacks—its board has approved a new $2 billion repurchase program—and organic growth, with the company projecting EPS accretion by the end of 2026 as share repurchases are expected to offset $300 million of lost after-tax operating income that year. InvestingPro analysis indicates management has been consistently aggressive with share buybacks, and the stock is currently trading near its 52-week high of $35.36. For deeper insights into Corebridge’s financial health and detailed valuation metrics, subscribers can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
The insurer will continue to write and distribute variable annuities outside of New York through a flow reinsurance agreement with Venerable, using its American General Life Insurance (NSE:LIFI) subsidiary, while its New York subsidiary United States Life Insurance Company will no longer write variable annuity business.
In other recent news, Corebridge Financial reported its first-quarter 2025 earnings, revealing an earnings per share (EPS) of $1.16, slightly below the expected $1.18. The company’s revenue also fell short, coming in at $4.74 billion against a projected $5.44 billion. Despite these misses, Evercore ISI raised Corebridge Financial’s price target to $37, maintaining an Outperform rating, citing adjustments in financial estimates following the earnings report. Additionally, Corebridge Financial announced a significant transaction, agreeing to sell its $51 billion variable annuity business to Venerable Holdings. This deal is valued at $2.8 billion and is expected to generate approximately $2.1 billion in net distributable proceeds after tax, with a large portion earmarked for share repurchases. The company’s Board of Directors has authorized a $2 billion increase to its share repurchase program in connection with this transaction. In corporate governance updates, Corebridge conducted its 2025 Annual Meeting of Stockholders, where stockholders elected directors and approved executive compensation. Lastly, Rose Marie Glazer resigned from two board committees but will remain a candidate for re-election as a director and continue her role on the Risk Committee.
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