Fortitude Re closes deal to acquire Prudential Financial portfolio

Carlyle Group-backed  Fortitude Re has completed the acquisition of Prudential Financial’s legacy traditional variable annuity block.

The deal includes $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 Prudential Annuities Life Assurance Corporation (PALAC) prior to 2011.

Consistent with the agreement announced in September last year, Fortitude Re has renamed PALAC as Fortitude Life Insurance & Annuity Company.

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.

“This transaction is another key step in our journey to become a higher growth, less market sensitive and more nimble company,” said Andy Sullivan (pictured), Prudential’s executive vice president and head of US businesses. “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.”

Fortitude Re CEO James Bracken added: “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 served as legal counsel to Fortitude Re. Sidley Austin served as legal counsel to Prudential, and Goldman Sachs served as exclusive financial advisor.

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