Benzinga | Jun 29, 2021 09:17AM EDT

Ameriprise Financial Announces $8B Fixed Annuity Reinsurance Transaction With Global Atlantic; Says Transaction Generates ~$700M Of Excess Capital

Ameriprise Financial, Inc. (NYSE:AMP) ("the company") announced today that its insurance subsidiaries, RiverSource Life Insurance Company ("RiverSource Life") and RiverSource Life Insurance Co. of New York ("RiverSource Life of New York" and together with RiverSource Life, "RiverSource"), have entered into an agreement with Global Atlantic Financial Group's subsidiaries Commonwealth Annuity and Life Insurance Company and First Allmerica Financial Life Insurance Company (together, "Global Atlantic"), to reinsure approximately $8.0 billion of fixed deferred and immediate annuity policies. The transaction will generate approximately $700 million of excess capital.

"This transaction further advances our consistent strategy of serving the needs of our clients comprehensively, while driving growth through our lower-capital, fee-based businesses and freeing-up capital to generate shareholder value," said Jim Cracchiolo, chairman and chief executive officer, Ameriprise Financial.

RiverSource Life will retain account administration and servicing of the policies. In addition, consistent with the company's enterprise risk management objectives, the transaction agreements contain a trust. The transaction with RiverSource Life is expected to close in July 2021. The transaction with RiverSource Life of New York includes the full block and will be subject to regulatory approval.

Goldman Sachs acted as financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel to Ameriprise Financial in connection with this transaction.