AEGON, the huge Dutch life insurance group, has announced the completion of a life insurance securitization transaction designed to free up capital to the group. The transaction will free up approximately $650m of additional regulatory capital to its U.S. operations. The transaction itself is worth $900m (the first portion of which was realised in 2008) and serves to realise in advance the value of some of the future profits from a book of life insurance business.
JPMorgan Chase have assisted AEGON with this deal and the term of the transaction between the two parties in ten years. JPMorgan take over the management and risks associated with the book of life insurance in return for paying AEGON upfront for it.