What are the long-term trends driving the growth of asset intensive reinsurance in Europe’s life and retirement markets?
Cormac Galvin: Asset intensive reinsurance – which we often refer to as full-risk reinsurance as we take the biometric risk as well – reflects long-term structural shifts in Europe’s life and retirement markets, including insurer consolidation, the growth of retirement and decumulation businesses, and sustained demand for savings products with guarantees. Together, these trends are increasing balance-sheet intensity and risk concentration.
Retirement markets are a particular focus. As populations age and retirement systems evolve, insurers must manage longevity, investment, and guarantee risks over extended time horizons. Full-risk reinsurance allows those risks to be managed holistically.
Jonathan Porter: Full-risk reinsurance structures help insurers optimise their risk profile, redeploy capital more efficiently and focus on their core strengths. Applied to specific blocks of business, full-risk reinsurance also improves risk diversification and expands the pool of long-term capital available.
How has RGA looked to measure and manage the risk associated with asset intensive reinsurance deals?
Jonathan Porter: When insurers are choosing a reinsurance partner, it’s crucial to look beyond just the alternative capital source they provide. A well-optimised and diversified balance sheet and ensuring your reinsurance partner is committed for the long haul are vital.
There’s also a balance to strike between the types of assets involved. While vanilla assets might seem more straightforward, alternative assets can offer benefits – but insurers need to assess whether they can manage and service these assets, even temporarily, based on their liability and policyholder profiles. This consideration becomes particularly important during a recapture event or if the assets need to be sold.
Insurers should assess the full “package” – weighing pricing alongside counterparty strength, collateral quality, and structural protections – rather than viewing asset choice in isolation. Collateral decisions come down to your risk appetite and business model. There’s always a trade-off between risk and reward, and it’s important to remember that offshore reinsurance doesn’t automatically mean the collateral is held offshore.
There are some myths and misconceptions around asset intensive reinsurance in Europe. How do you address these?
Jonathan Porter: The biggest misconception is that full-risk or funded solutions automatically mean taking on more risk, particularly investment risk.
In reality, well-structured full-risk reinsurance is about managing risk more deliberately, not increasing it. These transactions operate within robust governance frameworks, with clear economic alignment, strong counterparty discipline, and explicit downside protections. The real question is not whether assets are involved – they always are in savings and annuity business – but who is best placed to hold and manage that risk over time.
What supervisory expectations do you need to consider when working in this market?
Cormac Galvin: When structured appropriately, full-risk reinsurance aligns closely with regulatory priorities around policyholder protection and financial stability. By transferring policyholder and asset risks together within clearly governed frameworks, these solutions can improve diversification, enhance capital efficiency, and strengthen insurers’ resilience.
We expect the market to become increasingly comfortable with full-risk reinsurance where transactions are transparent, well-collateralised, and supported by strong governance and counterparty discipline. In that context, these solutions are best understood as prudent risk-management tools supporting sustainable long-term business models.
How has RGA’s global reach helped with the deals you have done in Europe?
Cormac Galvin: RGA’s global platform means European insurers are working with a partner that can scale when needed, innovate responsibly, and stay committed for the long term – whether the challenge is traditional biometric risk, capital-motivated reinsurance, or more sophisticated full-risk solutions. That approach is informed by decades of experience executing full-risk transactions across multiple market cycles, supported by a strong credit profile and a resilient balance sheet.
More broadly, being a global specialist also means deep, hands-on expertise in life and health insurance itself – including in-depth knowledge of life products, strong underwriting capabilities, and long experience working across European markets with distinct regulatory, accounting, and policyholder dynamics.
A good illustration is our recent transaction with Equitable Holdings in the US, where RGA reinsured US$32 billion of a diversified life insurance block – one of the largest life reinsurance transactions ever executed. It reflects our financial capacity and ability to structure and execute complex full-risk solutions at scale.
The same platform, disciplines, and decision-making framework underpin our work in Europe.
Recent examples include a €900 million full-risk life reinsurance transaction with Baloise Belgium and a first-of-its-kind €300 million full-risk transaction on disability annuity liabilities with Allianz-Suisse. We will speak more on these transactions at the conference.
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