POSTED 11 December 2024

Fitch Ratings - New York - 11 Dec 2024: Fitch Ratings has placed the 'BBB' Long-Term Issuer Default Ratings (IDRs) of Resolution Life Group Holdings Ltd. and RLGH Finance Bermuda (collectively, Resolution Life) on Rating Watch Positive. Fitch has also placed the ratings of Resolution Life's core operating subsidiaries in North America and Asia Pacific on Rating Watch Positive, including Security Life of Denver Insurance Company (SLD) (A- IFS), Resolution Re (A- IFS), Resolution Life Australasia Ltd. (A IFS; A- IDR) and Resolution Life New Zealand Limited (A IFS; A- IDR).

Key Rating Drivers

The rating action follows the announcement of Nippon Life's (A+ IFS/Positive) planned acquisition of the remaining share capital of Resolution Life, becoming its sole owner. Nippon Life is currently the largest shareholder of Resolution Life. The transaction is expected to close in the second half of 2025 subject to customary regulatory approvals.

The Positive Watch reflects Fitch's view of Resolution Life's potential strategic importance to Nippon Life, and expectation of uplift due to the stronger credit quality of its new sole owner. Nippon Life is the largest life insurance company in Japan and ranks as one of the largest life insurers globally.

The transaction reflects a broader strategic initiative by Nippon Life to expand its life insurance business outside of Japan. Nippon Life continues to target global growth with a budget of JPY2 trillion prior to this announced acquisition for M&A over the mid-term management plan period from FYE25 to FYE27. Other acquisitions by Nippon Life include its recently closed 22% interest in Corebridge Financial, Inc. (IFS Ratings of life insurance subsidiaries; A+/Stable).

Fitch expects Resolution Life's existing management team and operating strategies to largely remain in place following the close of the transaction. SLD and Resolution Re are expected to continue to focus on block and flow reinsurance transactions in the U.S., U.K. and Asia. Resolution Life Australasia is expected to merge with Nippon Life's Australian business, MLC Life Insurance Company, to form a new primary life insurer, which will write new business and be a joint venture between Nippon Life and Resolution Life.

We expect to resolve the Rating Watch Positive when the transaction is closed and we are able to determine the strategic importance of related entities to Nippon Life. This is expected to take more than six months.

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