Fortitude Re completed a reinsurance transaction through its subsidiary, Fortitude Reinsurance Company (FRL), with Unum Life Insurance Company of America, a subsidiary of Unum Group.
Under the agreement, Unum ceded to FRL $3.4 bn of individual long-term care (LTC) statutory reserves and approximately $120 mn of Unum Group’s multi-life individual disability insurance (IDI) in-force premium.
This cession accounts for about 19% of Unum Group’s total LTC block and 20% of its in-force IDI premium.
Unum will continue servicing and administering the reinsured policies. FRL, in turn, retroceded 100% of the LTC and IDI insurance risks to a highly rated global reinsurance partner, retaining only the underlying spread-based risks associated with the block.
Richard P. McKenney, president and CEO of Unum, described the transaction as a significant milestone in reducing the company’s exposure to legacy LTC business.
With the close of this transaction, we have achieved a significant milestone in reducing the company’s exposure to the legacy long-term care business.
Richard P. McKenney, president and CEO of Unum
He added that Unum remains focused on further lowering its risk profile, growing its core businesses, optimizing capital, and creating shareholder value.
“Looking forward, we remain focused on further reducing our risk profile, delivering growth in our core businesses, optimising our capital, and delivering value for our shareholders.”
Sidley Austin LLP served as legal counsel to Fortitude Re, while Debevoise & Plimpton LLP advised Unum.
