MetLife Inc. MET has entered into an agreement with Global Atlantic Financial Group to reinsure approximately $19.2 billion of U.S. retail universal life, variable universal life, universal life with secondary guarantees, and fixed annuity statutory reserves. The combined value of the transaction is expected to be approximately $3.25 billion with a ceding commission of $2.25 billion and $1 billion of capital that will be released, according to a statement released by MetLife early Thursday. “This transaction is another critical step in creating long-term value for our shareholders and for all our stakeholders,” said MetLife CEO Michel Khalaf, in the statement. “It will reduce enterprise risk and enable us to further invest in responsible growth while also returning capital to our shareholders — underscoring our financial strength and our balanced approach to capital management.” The transaction is expected to positively impact several of the key financial metrics, according to MetLife. These include adding to the insurance company’s adjusted earnings per share and contributing to the company’s 13% to 15% adjusted return on equity target. MetLife’s Board has also approved a $1 billion increase in the company’s share repurchase authorization. This is incremental to the $3 billion authorization announced earlier this month, and brings MetLife’s total share repurchase authorization outstanding to roughly $4 billion, the company said. MetLife’s stock rose 1.6% in premarket trades. Last month MetLife raised its dividend by 4%, citing strong free cash flow generation.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
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