Chariot Reinsurance (Chariot Re), the Bermuda-based life and annuity reinsurance sidecar company launched by MetLife, Inc. in partnership with investor General Atlantic, has now completed its first transaction, assuming $10 billion of liabilities.
As we explained, like a fully-collateralized sidecar structure, that we more typically see in property catastrophe reinsurance and retrocession, these life and annuity sidecars come with the similar benefits of a complementary pool of capital (from third-party sources) that can be used to augment capacity for the sponsor, as well as to add efficiency through potentially lower costs-of-capital than traditional equity raises can achieve, plus the investment assets attached to long-term life and annuity liabilities.
We also reported that S&P Global Ratings highlighted how structures like Chariot Re provide efficient access to “on-demand” capital for their sponsors.
In its first transaction, Chariot Re will reinsure roughly $10 billion of liabilities, with that pool of risk including some structured settlement annuity contracts and group annuity contracts linked to pension risk transfers originated by MetLife.
Cynthia Smith, an executive with a 30-year insurance career and most recently the leader of MetLife’s Group Benefits Regional Business, is the Chief Executive Officer of Chariot Re, supported by a leadership team with operational and strategic expertise across insurance and reinsurance.
Smith commented on the news, “We are launching Chariot Re from a position of strength with high-quality liabilities, a seasoned leadership team, and strong sponsors and investors, in order to meet the growing demand for life and annuity reinsurance solutions around the world.”
Michel Khalaf, President and Chief Executive Officer of MetLife, added, “This transaction with co-sponsor General Atlantic represents a significant step in establishing Chariot Re as a premier global provider of innovative reinsurance solutions. For MetLife, our strategic partnership with Chariot Re supports growth in our diversified retirement platform and asset management business, two key priorities of our New Frontier strategy.”
Bill Ford, Chairman and Chief Executive Officer of General Atlantic, also commented, “Together with MetLife, one of the leading and largest global insurance companies, we are committed to supporting Chariot Re as it delivers high-quality reinsurance solutions, with a focus on long-term value creation, underpinned by disciplined growth and thoughtful risk management.”
Chariot Re is further evidence that the use of third-party capital in the life and annuity reinsurance space has evolved into one more similar to the way property cat sidecars have tended to be used by their sponsors, as a source of aligned and supportive capacity, as well as peak loss moderation.
Find details of numerous reinsurance sidecar investments and transactions, including life reinsurance sidecar structures, in our directory of collateralized reinsurance sidecar transactions.
