MetLife to Create Life and Annuity Funding Vehicle

The creation of Chariot Re and related transactions must first be approved by regulators, the organizers noted.

The organizers hope to launch Chariot Re by June 30, 2025.

Reinsurers provide insurance for insurance companies. They can protect the "direct writers" against longevity risk, mortality risk and other forms of risk, and they can also use reinsurance arrangements to provide capital for the direct writers, by reducing the amount of capital the direct writer needs to supply to write insurance policies or annuities.

MetLife plans to use Chariot Re to reinsure $10 billion in annuities used to fund lawsuit settlements and help employers pay pension benefits.

Michel Khalaf, MetLife's CEO, seemed to indicate that Chariot Re will provide reinsurance for new annuities, not just for MetLife annuities that are already in force.

"With the demand for life and retirement solutions anticipated to grow around the globe, MetLife views a strategic partnership with Chariot Re as a powerful avenue to further serve those expanding needs," Khalaf said.

Credit: Bloomberg