ZACKSยท2025-06-27 17:55Core Insights - Corebridge Financial, Inc. (CRBG) has entered into a reinsurance agreement with CS Life Re, a subsidiary of Venerable Holdings, Inc., to reinsure its entire block of variable annuities valued at $2.8 billion, expected to yield approximately $2.1 billion in net distributable proceeds after taxes [1][9] Transaction Details - The reinsurance transaction covers the entire in-force book of variable annuity contracts within the Individual Retirement segment, which had an account value (AV) of $51 billion as of March 31, 2025. This includes $5 billion of General Account assets and $46 billion of Separate Account assets [2] - The deal also involves the divestiture of SAAMCo, an investment adviser for Corebridge's variable annuity products, with the AGL transaction expected to close in Q3 2025 and the USL transaction and SAAMCo sale in Q4 2025 [3] Financial Impact - The transaction implies a valuation multiple of approximately 9-10 times Corebridge's expected operating earnings for 2026 and 2027. Although a decrease in adjusted after-tax operating income of around $300 million is anticipated in 2026, this impact is expected to lessen in subsequent years [4] - The transaction is projected to enhance the company's Life Fleet Risk-Based Capital ratio by over 50 points, prior to the effects of the share repurchase program [4] Strategic Motive - The reinsurance agreement allows Corebridge to exit a legacy business line characterized by volatile GAAP earnings and potential tail risk exposure, thereby reshaping its portfolio and enhancing shareholder value [5] Shareholder Returns - The majority of the proceeds from the transaction will be returned to shareholders through share repurchases, with a $2 billion increase in the existing share repurchase authorization approved by the board [6][7] Stock Performance - Corebridge shares have increased by 20.2% over the past year, outperforming the industry growth of 10.7% [8]