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NEW YORK - MetLife, Inc. (NYSE: NYSE:MET), a $56.57 billion market cap insurance giant with a perfect Piotroski Score of 9 according to InvestingPro, and private equity firm General Atlantic have unveiled plans to establish Chariot Reinsurance, Ltd. (Chariot Re), a Bermuda-based life and annuity reinsurance company poised to commence operations in the first half of 2025. This joint venture aims to capitalize on the growing global demand for life and retirement solutions.
The partnership is set to kick off with an initial equity investment exceeding $1 billion, with MetLife and General Atlantic each holding an approximate 15% stake. The remaining shares will be distributed among third-party investors, including Chubb (NYSE:CB), the property and casualty insurance giant, which is expected to play a significant role as an anchor investor. With MetLife's strong financial position, including revenue of $71.34 billion in the last twelve months and a conservative P/E ratio of 16.5, analysts suggest the stock may be undervalued.
Chariot Re's strategic reinsurance partnership with MetLife is contingent on regulatory approvals. The company plans to begin by reinsuring a $10 billion block of MetLife's liabilities, specifically structured settlement annuity contracts and group annuity contracts related to pension risk transfers.
MetLife's customer service commitment is projected to remain steadfast post-transaction, while MetLife Investment Management and General Atlantic will take on exclusive asset management responsibilities for Chariot Re. The new entity will leverage MetLife Investment Management's expertise in Public Fixed Income, Private Capital, and Real Estate, as well as General Atlantic's nearly 45-year track record in global private markets.
MetLife's President and CEO Michel Khalaf expressed enthusiasm about the venture, citing the synergy between MetLife's insurance prowess and General Atlantic's investment acumen. Bill Ford (NYSE:F), General Atlantic's Chairman and CEO, echoed this sentiment, highlighting the shared commitment to investment excellence and sustainable growth.
Chariot Re is expected to be helmed by MetLife veteran Cynthia Smith as CEO, with Toby Srihiran Brown from MetLife and Graves Tompkins (NYSE:TMP) from General Atlantic anticipated to join the company's Board of Directors. Bank of America is expected to provide financing, with various advisors and legal counsel engaged to facilitate the formation of Chariot Re.
This announcement is based on a press release statement and all forward-looking statements are subject to risks, uncertainties, and assumptions. The actual future performance of MetLife and Chariot Re could differ materially from these statements. For a comprehensive analysis of MetLife's financial health, growth prospects, and over 30 key financial metrics, access the detailed Pro Research Report available on InvestingPro.
In other recent news, MetLife has reported its Q3 2024 earnings, revealing mixed results. The insurance giant reported adjusted earnings of $1.4 billion, or $1.93 per share, marking a decrease from the previous year. Despite this, there was a year-to-date increase of 12% in adjusted earnings per share, excluding notable items. The company's Group Benefits and Retirement and Income Solutions segments benefited from favorable U.S. market conditions.
In addition to these financial updates, MetLife is preparing to launch its New Frontier strategy on December 12, 2024. This strategy is aimed at accelerating growth and enhancing returns. The company's strong liquidity position, with $4.5 billion in cash and liquid assets, supports this strategic move.
While there were declines in adjusted earnings for Group Benefits and Retirement and Income Solutions segments, and Asia's adjusted earnings fell 6%, the company reported a 9% increase in Latin America's adjusted earnings. These recent developments indicate a complex, yet strategically navigated market environment for MetLife.
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