XL Group To Sell Life Reinsurance Subsidiary For $570 Mln

(RTTNews) - XL Group plc (XL) said Friday that XL Insurance (Bermuda) Ltd has entered agreed to sell its subsidiary, XL Life Reinsurance (SAC) Ltd to GreyCastle Holdings Ltd for $570 million in cash.

The company has has now dealt with the vast majority of its life reinsurance business and will focus on its core property and casualty operations to drive growth, said XL Chief Executive Officer Mike McGavick.

XL said the deal reduces the risk profile of the company, which gives it additional flexibility to pursue capital management initiatives.

XL estimates that the March 31, 2014 pro forma effect of the deal would be an overall reduction in U.S. GAAP book value of about $585 million and an estimated after-tax U.S. GAAP net loss of about $580 million.

At March 31, 2014, XL had total U.S. GAAP policy benefit reserves relating to its life operations of about $4.8 billion. Upon completion of the deal, XL will retain about $438 million of reserves related to disability, accident and health policies and U.S. term assurance in its Life operations segment and will record a reinsurance recoverable from XL Life Reinsurance (SAC) Ltd ("XLLR") of $4.4 billion.

The transaction is expected to be completed in the second quarter of 2014 and is subject to satisfaction of regulatory conditions.