Dutch insurer Aegon has completed the divestment of its life reinsurance business, Transamerica Reinsurance, to French reinsurer Scor.
The agreement, which was announced on 26 April, has received final approval from regulators.
Under the agreement, AEGON has divested its global life reinsurance activities with the exception of select blocks of business. The retained businesses comprise mainly variable annuity guarantee business.
The transaction, which consists of a number of reinsurance agreements, resulted in a total after-tax consideration of $1.4bn, consisting of cash proceeds of $900m from SCOR and a further $500m of capital released.
The transaction will result in an amortization of prepaid cost of reinsurance of approximately $40m before tax per annum initially related to the business ceded.
These costs are expected to trend down as the contracts mature. The transaction will have no meaningful impact on shareholder's equity.