“However, this will be offset by an annual hedge cost savings to the enterprise of roughly $45 million associated with this block of business.”

In context

“ion with Talcott Resolution Life Insurance Company covers approximately $10 billion of current U.S. retail variable annuity and rider statutory reserves via funds withheld for the general account reserves and modified coinsurance for the separate account liabilities. This risk transfer significantly lowers our exposure to retail variable annuity tail risk by reducing account values by approximately 40%, which in turn would positively reduce our enterprise risk associated with capital markets and its related volatility. It is expected to deliver approximately $250 million in statutory value, consisting of a ceding commission and release of capital over time. Also, we expect the transaction will result in foregone adjusted earnings in MetLife Holdings of approximately $100 million annually. However, this will be offset by an annual hedge cost savings to the enterprise of roughly $45 million associated with this block of business. In addition, we have secured investment management mandates for MetLife Investment Management to manage roughly $6 billion of assets with Talcott, which supports our strategy to expand third-party fee income. Turning to Page 10. You can see how our VA balances have declined over time, consistent with our strategy. At our 2024 Investor Day in December, we highlighted the left side of the chart, showing the 26% drop in VA balances over the five-year period, from 2019 through 2024. And as shown on the right side of the chart, we expect total VA balances will further decline to $24.5 billion as of March 31, 2025, reflecting the reinsurance transaction with Talcott. Overall, this represents a more than 50% decline in VA balances since 2019, a positive development from MetLife's risk profile. I”