Dutch banking and insurance group ING said on Friday it had sold its US reinsurance business to Reinsurance Group of America for an undisclosed amount a day after selling its Asian private banking unit.
ING finally announced today that it has reached an agreement to transfer its U.S. group reinsurance business, ING Reinsurance U.S., to Reinsurance Group of America, Inc. Terms of the agreement were not disclosed. RGA is a U.S.-based global provider of life reinsurance.
Tom McInerney, CEO for ING Insurance Americas said: “This transaction fits within ING’s Back to Basics strategy to simplify our structure and focus our U.S. insurance operations on Retirement Services, Life Insurance, and Rollover Annuities,”. “Although ING Reinsurance is not part of ING’s core businesses in the U.S., it is a solid, well-run, and client-focused business that will complement a company that considers reinsurance its core business. We believe that RGA will be an excellent owner of ING Reinsurance.”
The transaction is structured as a reinsurance agreement between RGA and ING. The disposition of ING Reinsurance U.S. will have a limited positive impact on ING’s 2010 earnings. In addition, the transaction is expected to release nearly EUR 100 million in capital and improve the debt/equity ratio of ING Insurance by around 60 basis points. After the agreement, ING will continue to retain a reinsurance portfolio in the U.S. that has been in run-off since 2002.
ING Reinsurance U.S. is a leading provider of reinsurance programs for group life, accident, and health insurance companies in the U.S., Guam, Canada, Bermuda, and the Caribbean. It focuses on medium and large providers of group insurance products and operates primarily out of Minneapolis, Minn.
This transaction is subject to regulatory approvals and is expected to be closed in the first quarter of 2010.