1. Unum ceded $3.4 billion in LTC reserves to Fortitude Re. 2. Transaction represents 19% of Unum's LTC block and 20% of IDI premium. 3. Unum will continue servicing the reinsured policies post-cession. 4. Fortitude Re will retrocede 100% of risks to a global partner. 5. This deal is part of a strategic risk management approach.
Ceding significant reserves can improve Unum's balance sheet, enhancing capital efficiency. Historically, similar reinsurance agreements have bolstered stock performance by reducing liabilities.
This strategic move directly impacts reserve management and capital structure, critical for investors. Its scale and nature influence market perception of Unum’s financial health.
The transaction enhances Unum's stability over time, likely improving investor confidence long-term. Historical data shows companies often see sustained growth after optimizing reserve structures.
HAMILTON, Bermuda--(BUSINESS WIRE)--FGH Parent, L.P., (together with its subsidiaries, “Fortitude Re”), a leading global reinsurance company, today announced the closing of the reinsurance transaction between its subsidiary, Fortitude Reinsurance Company Ltd. (“FRL”) and Unum Life Insurance Company of America (“Unum”), a subsidiary of Unum Group (NYSE: UNM).
Consistent with the agreement announced Feb. 27, 2025, Unum will cede to FRL, effective as of January 1, 2025, $3.4 billion of individual long-term care (“LTC”) statutory reserves and approximately $120 million of Unum Group’s multi-life individual disability insurance (“IDI”) in-force premium. The cession represents 19% of Unum Group’s total LTC block and 20% of its in-force IDI premium. Unum will continue to service and administer the reinsured policies.
With the closing of this transaction with Unum, FRL has also entered into an agreement to retrocede 100% of the LTC and IDI insurance risks to a highly rated global reinsurance partner. FRL will therefore retain only the underlying spread-based risks associated with this block of business.
Sidley Austin LLP served as legal counsel to Fortitude Re.
About Fortitude Re
Fortitude Re is a leading provider of reinsurance solutions with $106 billion in total assets as of Dec. 31, 2024. The foundations of our business model are our exceptional insurance professionals and the support of the world’s most sophisticated insurance investors, including Carlyle and T&D Insurance Group. Our people, our capital strength and our capabilities drive strategic reinsurance solutions designed to meet our clients’ highest priority goals and to create sustainable, long-term value for our shareholders, our teammates, and the communities in which we operate. For more information visit, www.fortitude-re.com and follow Fortitude Re on LinkedIn.