By Will Feuer
Prudential Financial said it has struck a deal to reinsure a portion of its guaranteed universal life block with Somerset Re, a move expected to result in about $450 million of proceeds.
Somerset Re will reinsure about $12.5 billion of reserves backing Prudential’s guaranteed universal life policies issued by Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey, Prudential said.
The deal, covering policies written before 2015, represents about one-third of Prudential’s total guaranteed universal life statutory reserves. Prudential said it doesn’t expect there to be any direct impact to employee headcount as a result of the deal. The company said it also doesn’t expect any changes for customers and distribution partners.
“This transaction marks another significant milestone in our efforts to reduce market sensitivity and increase capital flexibility,” Prudential Chief Executive Charles Lowrey said.
Prudential said it expects to incur a one-time cost of about $65 million in the fourth quarter, mostly due to the extinguishment of certain financing facilities. The company also anticipates an increase in annual adjusted operating income of about $55 million.
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