Principal To Reinsure U.S. Retail Fixed Annuity And ULSG Statutory Reserves With Talcott

(RTTNews) - Principal Financial Group (PFG) has entered into an agreement with an affiliate of Sixth Street and its insurance platform, Talcott, to reinsure the company's in-force U.S. retail fixed annuity and universal life insurance with secondary guarantee blocks of business. The company expects deployable proceeds of approximately $800 million upon closing of the reinsurance transaction and through additional transactions. It plans to return the proceeds to shareholders through share repurchases. The company expects the transaction to be accretive to non-GAAP operating earnings per share starting in 2023.

In connection with the announcement, the Board has approved a $1.6 billion increase to the $1.1 billion that remains available under the company's existing share repurchase authorization as of December 31, 2021, resulting in an aggregate amount of $2.7 billion.

Additionally, the company has increased its share repurchase target for 2022 from $800 million-$1.0 billion to $2.0-$2.3 billion.

Principal now plans to return up to $4.6 billion to shareholders between 2021 and 2022 through share repurchases and common stock dividends, well above the $3 billion announced in June 2021.