Axa Eyes Sale of U.S. Reinsurer

Axa SA is exploring the sale of a U.S. subsidiary that shoulders dangers tied to variable annuities, as Europe’s 2nd-biggest insurer narrows its attention in North the us, in keeping with people familiar with the problem.

The insurer is working with Morgan Stanley to assess options for Jersey city, New Jersey-based totally Axa corporate solutions existence Reinsurance Co., that can fetch $200 million to $three hundred million in a sale, stated the humans, who asked not to be recognized due to the fact the matter isn’t public.

Henri de Castries, the leader govt officer of Paris- based Axa, has been divesting undesirable assets to recognition on increase opportunities in rising markets. ultimate year, protective existence Corp. paid $1.06 billion for Axa’s Mony existence coverage Co., including a block of lifestyles insurance and annuity contracts, maximum of which had been issued previous to 2004. Axa still offers retirement and coverage products inside the U.S.

Hartford monetary offerings organization Inc., CNA financial Corp., London-based Aviva % and Canada’s sun existence financial Inc. are amongst companies which have made deals to restriction dangers tied to annuities. The retirement products have become poisonous for lifestyles insurance groups at some point of the recession because their liabilities swell when inventory markets decline.

Guggenheim partners LLC, Apollo global control LLC’s Athene keeping Ltd. and Warren Buffett’s Berkshire Hathaway Inc. have all taken on annuity agencies, making a bet they could higher control funds backing the responsibilities. Representatives of Morgan Stanley and Axa declined to comment.

humans buy variable annuities as a way to make certain they'll have a supply of earnings when they retire. Axa corporate existence Reinsurance sponsored guidelines that promise so-known as guaranteed minimal loss of life and income blessings, which promise a certain payout regardless of marketplace situations. The operation stopped underwriting new enterprise in 2002, and had $1.2 billion in belongings, and $975 million in liabilities at the stop of 2012, in line with nation regulatory filings.