By Connor Hart
Unum Group inked a deal to cede $3.8 billion worth of long-term care insurance policies to Fortitude Reinsurance, as part of its strategy to reduce its exposure to the business.
The company said Monday the reinsured block consists of roughly 50,000 individual long-term care policies, with $3.8 billion of statutory reserves and about $4.5 billion of best estimate reserves.
Following the deal, Unum Life Insurance Company of America's remaining statutory reserves are expected to be roughly $11 billion, with about 70% of remaining reserves backing group long-term care policies, the company said.
Chief Executive Richard McKenney said the transaction marks another step toward Unum's closed block strategy, which aims to reduce the company's exposure to its legacy long-term care business.
"Building on the actions we have taken over the last several years, including our prior external reinsurance transactions, this agreement significantly reduces the size and risk profile of the closed block," he said.
Write to Connor Hart at connor.hart@wsj.com