Jackson will pay $621 million in cash for the business, subject to adjustments reflecting the value of the business at closing. The purchase will be financed in its entirety from internal Jackson resources. The transaction is subject to regulatory approval and is expected to close in the third quarter of 2012.
“This bolt-on acquisition is in-line with our strategy and is a great opportunity to increase the scale of our life business. The transaction helps diversify Jackson’s earnings by increasing the amount of income we generate from underwriting activities thereby enhancing the quality of our earnings and our ability to remit more cash to our parent, Prudential plc.,” said Mike Wells, president and CEO, Jackson.
SRLC is a life insurance business that sits within the U.S. division of Swiss Re’s Admin Re. The primary operating subsidiary of SRLC is Reassure America Life Insurance Company (REALIC), which, since 1995, has acquired a diverse portfolio of traditional U.S. life insurance business. The earnings of SRLC are derived from seasoned, long-duration cash flows generated principally from term life, whole life and basic universal life products. Jackson will acquire assets related to the subject business of approximately $10 billion and 1.5 million policies. Swiss Re will retain a portion of the SRLC business through reinsurance arrangements to be undertaken prior to closing.