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By David French
NEW YORK (Reuters) – MetLife ( NISE: ) and General Atlantic are forming a reinsurance venture, company executives told Reuters on Wednesday, the latest in a growing trend of insurers and alternative money managers teaming up to boost returns from low-risk insurance assets .
The venture, called Chariot Reinsurance, will have an initial equity stake of more than $1 billion, with MetLife and General Atlantic each holding about 15% ownership.
Chariot Re, which is slated to launch in the first half of 2025, will be led by Cynthia Smith, who most recently served as MetLife’s group head of regional benefits, and will initially be seeded with $10 billion of existing MetLife policies.
Fellow insurer Chubb ( NISE: ) will also be a lead investor in the venture, with other institutional investors in the process of raising funds, General Atlantic Chief Operating Officer Graves Tompkins ( NISE: ) said.
“The high-quality long-term obligations that MetLife was able to offer to Chariot Re are really consistent with our investment strategy of creating value over the long term without assuming principal risk,” he said.
The move highlights the increasing convergence between the insurance and asset management industries.
Insurers want to free up capital to invest in new products by moving existing policies off their balance sheets. At the same time, alternative money managers are looking for the kind of stable, cheap money that insurance policies provide to invest in their strategies for higher returns.
Both MetLife – through its investment management arm – and General Atlantic will manage assets within Chariot Re, a Bermuda-based life reinsurance and annuity company.
Future assets could also come from MetLife, while there are significant opportunities to acquire funds from other sources, particularly the pension risk transfer market, MetLife Chief Financial Officer John McCallion said, as large corporations increasingly look to outsource management. his pension plans to reduce expenses.
With such opportunities ahead, McCallion said MetLife realized it couldn’t fund all the potential growth alone, so bringing in outside capital was the most logical solution to bridge the gap.
“This comes from the growth opportunity we see in our business. It’s just that we’re not going to use our balance sheet for all of that,” he said.
