Pacific Life Re has announced an asset intensive reinsurance agreement with Tokio Marine & Nichido Life Insurance (Anshin Life) in Japan.
The deal covers in-force whole-of-life policies and will provide Anshin Life with a new method of reducing long-term interest rate risk in its portfolio and improving its asset liability management capabilities.
Phill Beach, Executive Vice President of Savings & Retirement at Pacific Life Re, commented, “Supporting these types of transactions in Japan is a key part of our overall strategy. By transferring their risk to Pacific Life Re, Anshin Life can efficiently manage and optimise their product portfolio.”
The transaction was supported by Aon and law firm Eversheds Sutherland, Pacific Life Re said.
A.I.R. rises
The deal represents the second asset intensive reinsurance agreement involving the Japanese insurer and comes just as RGA revealed Anshin Life had agreed to a US$640m coinsurance deal for for whole life policies.
The deal is also the latest in a series of significant asset intensive reinsurance deals announced in Asia this year.
On 1 February, Resolution Re said it had signed a flow reinsurance deal with Dai Ichi Life, though the deal’s value was not disclosed.
Later the same month, Manulife completed a landmark US$9.6bn deal with Global Atlantic; the deal, initially announced in December 2023, represents the largest LTC reinsurance transaction ever recorded.
On 23 March 2024, RGA and Japan Post Insurance announced they had inked a life annuity reinsurance deal valued at US$4.62bn.
Industry participants told (Re)in Asia in February that reinsurers are increasingly focusing on Asia for asset-intensive reinsurance deals, particularly life back book transactions.
The market is expected to grow as insurers in the region seek to optimise their portfolios and meet new regulatory requirements, such as the switch to risk-based capital regimes and the introduction of IFRS 17 accounting standards (see story below).
Regulatory complexities and concerns over private equity involvement may slow down the pace of deals in some markets, but despite potential challenges, industry leaders remain optimistic about the long-term potential of the Asian market.
