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Prudential Financial Completes Sale to Fortitude Re of $31B Block of Traditional Variable Annuities

Prudential Financial Completes Sale to Fortitude Re of $31B Block of Traditional Variable Annuities
  • Marks key step in executing on Prudential’s strategy, while maintaining consistent experience for customers and deepening focus on protected outcome solutions like FlexGuard and FlexGuard Income
  • Demonstrates Fortitude Re’s leadership and expertise in managing a broad array of long-dated insurance liabilities

Prudential Financial, Inc. and Fortitude Group Holdings, LLC, the parent company of Bermuda’s largest multi-line reinsurer (“Fortitude Re”), announced the completed sale to Fortitude Re of a portion of Prudential’s legacy traditional variable annuity block.

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Consistent with the agreement announced on Sept. 15, 2021, Fortitude Re has acquired one of Prudential’s subsidiaries, Prudential Annuities Life Assurance Corporation (“PALAC”) (to be renamed Fortitude Life Insurance & Annuity Company). Included in the sale is approximately $31 billion of in-force variable annuity account values, primarily consisting of non-New York, traditional variable annuities with guaranteed living benefits that were issued by PALAC prior to 2011.

To ensure a consistent experience for customers, Prudential will continue to service and administer all contracts in the block following the transaction. Prudential also will continue to sell protected outcome annuity solutions through other existing subsidiaries.

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“This transaction is another key step in our journey to become a higher growth, less market sensitive and more nimble company,” said Prudential Executive Vice President and Head of U.S. Businesses Andy Sullivan. “It delivers value for investors and ensures that our customers continue to be well served. The transaction also allows Prudential to deepen our focus on expanding access to retirement security through the growth of protected outcome solutions, like FlexGuard and FlexGuard Income.”

“Closing on this transaction marks a significant milestone for Fortitude Re,” said Fortitude Re Chief Executive Officer James Bracken. “We have demonstrated to Prudential, its policyholders and other stakeholders that our commitment to capital strength, a professional client experience and deep liability expertise can help our insurance clients achieve their strategic goals. We will continue to build our capabilities in partnership with Carlyle, enabling us to take on industry-shaping transactions, and to continue on our journey towards becoming a leading provider of solutions to global insurers.”

Debevoise & Plimpton LLP served as legal counsel to Fortitude Re. Sidley Austin LLP served as legal counsel to Prudential, and Goldman Sachs & Co. LLC served as exclusive financial advisor.

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