MetLife and General Atlantic Launch Chariot Re to Meet Growing Global Demand in Life and Annuity Reinsurance

MetLife, Inc. and private equity firm General Atlantic have announced the creation of Chariot Reinsurance, Ltd. (Chariot Re), a Bermuda-based Class E reinsurer set to launch in the first half of 2025, pending regulatory approval. This venture, leveraging the expertise of both MetLife and General Atlantic, aims to address growing global demand for life and annuity reinsurance solutions. ¹

Structure and Equity Distribution

• Equity Investment: Chariot Re will begin operations with an initial equity commitment of over $1 billion, equally contributed by MetLife and General Atlantic, each holding 15% equity stakes.¹ The remaining equity will be shared among third-party investors, including Zurich-based insurer Chubb, which will serve as an anchor investor.¹ ²

• Liabilities Transfer: MetLife will transfer approximately $10 billion in liabilities to Chariot Re.¹ These liabilities include structured settlement annuity contracts and group annuity contracts originating from pension risk transfers. Despite the transfer, MetLife will retain responsibility for customer service and related functions.¹

Asset Management Partnership

• Exclusive Management: The assets of Chariot Re will be exclusively managed by MetLife Investment Management and General Atlantic.¹ The investment portfolio will include public fixed income, private credit, real estate, and private equity investments.¹

• Collaborative Expertise: Both firms bring specialized capabilities to Chariot Re. MetLife Investment Management is a globally significant manager of life insurance assets, while General Atlantic has deep expertise in private markets investing.²

Strategic Vision

MetLife President and CEO Michel Khalaf described the venture as an opportunity to “create a world-class provider of innovative reinsurance solutions” by leveraging MetLife’s capabilities in originating liabilities and General Atlantic’s private markets expertise.¹ General Atlantic Chairman and CEO Bill Ford highlighted the collaboration as a path to drive sustainable growth and deliver strong investor returns.²

Market Position and Expansion

Chariot Re will source its initial assets primarily from U.S. and Japanese markets, leveraging MetLife’s retirement platform.² The Bermuda domicile provides regulatory and tax advantages, solidifying its position as a global hub for reinsurance businesses.¹

Industry Context

Growth in Private Equity's Role in Insurance

Private equity firms are increasingly entering the insurance and reinsurance markets to access pools of long-term capital. Total assets held by private equity-owned U.S. insurers grew by 93% between 2018 and 2022, reaching approximately $606 billion, according to the National Association of Insurance Commissioners.²

This trend reflects the advantages of linking insurers with private equity asset managers:

• Permanent Capital: Insurers provide a stable capital base for private equity firms, allowing long-term investments and consistent fee generation.²

• Higher Yield Opportunities: Private equity firms offer access to alternative investments, including private credit and real estate, that often yield higher returns than traditional fixed-income securities.¹

Regulatory Considerations

While the collaboration between private equity and insurers offers substantial benefits, regulators have raised concerns about the higher risk profiles of private equity-linked insurers compared to traditional insurers.² Bermuda’s regulatory framework, favorable to reinsurance operations, makes it a logical choice for Chariot Re, mitigating some concerns while providing a competitive advantage.¹

Implications of Chariot Re's Launch

For MetLife and General Atlantic

The partnership allows both firms to enhance their strategic capabilities:

1. Diversified Revenue Streams: MetLife gains an efficient vehicle to offload liabilities while retaining client-facing functions. General Atlantic secures access to permanent capital for its investment strategies.¹

2. Asset Management Synergy: The exclusive management of Chariot Re’s assets by MetLife Investment Management and General Atlantic demonstrates confidence in their combined expertise to deliver superior returns.¹ ²

3. First-of-Its-Kind Investment: Unlike previous investments in insurance funds, General Atlantic is deploying corporate capital, marking a significant strategic shift.²

For the Industry

Chariot Re exemplifies the evolution of the reinsurance industry:

• Bermuda’s Role: Bermuda’s prominence as a global reinsurance hub continues to grow, attracting investments from firms seeking regulatory and tax efficiencies.¹

• Demand for Reinsurance: Corporate pensions and long-term liabilities represent a growing market for reinsurance solutions, particularly as companies look to mitigate financial risks.²

• Competition: Chariot Re enters a market already influenced by private equity-driven strategies pioneered by firms like Apollo Global Management.²

For Investors

Investors can anticipate several benefits and challenges:

1. Enhanced Returns: Chariot Re’s investment in alternative asset classes positions it to achieve higher yields compared to traditional reinsurers.¹

2. Capital Efficiency: By transferring liabilities to a reinsurer, MetLife can allocate capital more efficiently, potentially improving shareholder value.¹ ²

3. Risk Assessment: Regulatory scrutiny and the inherent risks in private equity-linked insurance highlight the need for diligent investment oversight.²

Conclusion

The launch of Chariot Re marks a pivotal moment for both MetLife and General Atlantic as they seek to address growing global demand for life and annuity reinsurance solutions. With an innovative structure, substantial initial funding, and a strategic focus on leveraging Bermuda’s favorable reinsurance environment, Chariot Re is positioned to become a significant player in the industry.

The collaboration reflects broader trends in the integration of private equity and insurance, with implications for investors, insurers, and regulators alike. While risks exist, the strategic advantages offered by Chariot Re underline the growing importance of innovative partnerships in today’s reinsurance landscape.

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_{1. Insurance Business Magazine, “MetLife and General Atlantic to Launch Bermuda-Based Chariot Re,” 2024.}

_{2. The Wall Street Journal, “General Atlantic and MetLife Plan to Set Up Reinsurer Chariot Re,” 2024.}

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