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MetLife, Inc., one of the largest life and annuities insurance groups in the world, is partnering with institutional capital providers and asset managers to launch Chariot Reinsurance, a new Bermuda based company that will initially act as a kind of sidecar for the company, but seems well-positioned to become market-facing in future.
MetLife has partnered with investment firm General Atlantic for the launch of Chariot Reinsurance, Ltd., which is set to be a registered Class E Bermuda-based life and annuity reinsurance company.
The new reinsurance venture is expected to launch in 2025 with a strategic reinsurance partnership with MetLife in place.
Chariot Re is expected to have an initial combined equity investment of over $1 billion, with MetLife and General Atlantic each initially owning approximately 15% of the equity in the reinsurance company.
Other third-party investors will own the rest, with P&C specialist Chubb expected to be an anchor third-party investor.
To begin, it seems Chariot Re will operate as the latest third-party capital supported life and annuity reinsurance sidecar structure for MetLife.
MetLife expects to reinsurer around a $10 billion block of liabilities to Chariot Re to begin, made up of structured settlement annuity contracts and group annuity contracts associated with pension risk transfers.
This initial cession to Chariot Re is subject to regulatory approval and also the amount of equity that backs the reinsurer.
MetLife’s policyholder commitments will remain unchanged after the transaction and the company will continue to be responsible for all customer-related functions.
MetLife Investment Management and General Atlantic are set to exclusively provide asset management services to Chariot Re as well.
Michel Khalaf, President and Chief Executive Officer of MetLife, Inc., commented, “We are looking forward to seeing our collective vision to create a world-class provider of innovative reinsurance solutions come to life, leveraging the insurance and joint investment expertise of MetLife and General Atlantic. With the demand for life and retirement solutions anticipated to grow around the globe, MetLife views a strategic partnership with Chariot Re as a powerful avenue to further serve those expanding needs.”
Bill Ford, Chairman and Chief Executive Officer of General Atlantic, added, “General Atlantic and MetLife share a deep commitment to investment excellence, thoughtful risk management, and long-term value creation. Guided by MetLife’s robust origination capabilities and General Atlantic’s nearly 45 years of leadership in global private markets, we believe that Chariot Re will be well-positioned to deliver strong returns for its investors and drive sustainable growth going forward.”
This venture will provide MetLife with the benefits of a third-party capitalised reinsurance sidecar, while moving policies over to a dedicated reinsurance venture that it can then seek to grow with additional origination.
It seems Chariot Re could also become market-facing in future, as MetLife is already providing reinsurance capital to cedents for life and annuity type deals, as well as pension and longevity risk transfers, so Chariot Re may become a better direct conduit for those types of arrangements for the company.
At the same time, this is allowing MetLife to lean on third-party institutional investor type capital backing, while in addition benefiting from the investment opportunity itself, and tapping the investment expertise of General Atlantic as well.
While General Atlantic secures a new source of assets from the reinsurer, through the investment activities it will undertake for Chariot Re and the institutional backers like Chubb source a differentiated insurance-linked return stream.
These sidecar-like arrangements provide flexibility, external capital support and ultimately being off-balance-sheet provide elasticity for the MetLife business to grow into new opportunities.
Just yesterday we reported on insurer Allianz sponsoring a life and annuity focused reinsurance sidecar named Sconset Re Ltd., securing backing from institutional investors to capitalise the structure and partnering with PIMCO as well as other institutions for asset management support.
MetLife said that Chariot Re is expected to be led by Cynthia Smith, a 30-year veteran of the company, who will serve as CEO having most recently led MetLife’s Group Benefits Regional Business.
Find details of numerous reinsurance sidecar investments and transactions, including life reinsurance sidecar structures, in our directory of collateralized reinsurance sidecar transactions.
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