Corebridge Financial, Inc. has announced a transformative transaction with Venerable Holdings, Inc., which will see Corebridge reinsuring all the variable annuities of its individual retirement business. The total account value of the variable annuities stands at $51 billion as of March 31, 2025, with the transaction valued at $2.8 billion. This transaction will generate approximately $2.1 billion of net distributable proceeds after-tax for Corebridge.
The transaction is expected to provide significant value upside for shareholders, with a substantial majority of the $2.1 billion net distributable proceeds to be returned via share repurchases. Corebridge's board of directors has approved a $2 billion increase to the share repurchase program in connection with this transaction.
Financially, the transaction is expected to have an attractive earnings multiple of approximately 9–10x 2026e and 2027e operating earnings. It will also exit a portfolio with historically volatile GAAP earnings and tail risk exposure, with the impact of the transaction expected to decrease materially over the next few years.
Furthermore, the transaction is anticipated to decrease the impact on individual variable annuity after-tax operating earnings (AATOI) by approximately $300 million in 2026, with the impact expected to decrease materially over the next few years.
Following the transaction, Corebridge will continue to offer one of the broadest annuity product platforms in the industry, including fixed, index, and registered index-linked annuity (RILA) products. Additionally, Corebridge will continue to manufacture and distribute variable annuity products outside New York state, supported by a flow arrangement with Venerable.
The transaction is also expected to bring about changes in the company's individual retirement product platform. Specifically, prior to the close of the transaction, USL will cease manufacturing and distributing new individual retirement variable annuities in New York state. However, Corebridge will continue to administer and service all of its contracts, including those covered by the reinsurance transactions.
In terms of financial targets, Corebridge is reaffirming its attractive financial targets while reducing risk and maintaining its diversified business model. The company's insurance subsidiaries, American General Life Insurance Company and the United States Life Insurance Company in the City of New York, are also part of the transaction. The financial overview of the transaction includes an increase in the life fleet RBC ratio by over 50 points before any share repurchases.
Today the company's shares have moved 5.2% to a price of $34.79. If you want to know more, read the company's complete 8-K report here.
