Financial guarantor, Assured Guaranty Ltd, has entered into the annuity reinsurance business through the acquisition of Warwick Re Limited, the Bermuda-based life and annuity reinsurer. The acquisition has been renamed Assured Life Reinsurance Ltd.

It will focus on reinsuring fixed-term annuities and pension risk transfer annuities, leveraging Assured Guaranty’s established expertise in life reinsurance and its asset management capabilities.

Assured Guaranty said it expects that, for certain of Assured Life Re’s reinsurance exposure, Assured Life Re’s obligations to the ceding life and annuity insurers will be covered by a guaranty issued by Assured Guaranty Re Overseas Ltd, its AA-rated affiliate, an innovation that enables it to stand out from other life and annuity reinsurers.

The acquisition of Warwick Re, which closed on Wednesday, was effectuated by a holding company subsidiary of AGL, and included Warwick Re’s balance sheet, infrastructure and staff, as well as its ultimate parent, Warwick Company (UK) Limited (Warwick Holdings), and Warwick Holdings’ subsidiaries. The purchase price was approximately $158 million, subject to post-closing adjustments.

Warwick Re specialised in annuity reinsurance, including US multiyear guaranteed annuities and UK bulk purchase annuities (pension risk transfers), which are products Assured Life Re currently plans to reinsure. This acquisition provides Assured Guaranty with an immediate platform for growth in the annuity reinsurance market.

“Assured Guaranty has over 40 years of experience as a financial guarantor and more than 20 years serving the life and annuity insurance sector,” said Dominic Frederico, president and CEO of Assured Guaranty.

“Our deep understanding of the life and annuity reinsurance space, combined with our disciplined approach to risk management and our other core competencies, positions Assured Life Re to successfully participate in the annuity reinsurance market.”

Dan Bevill will serve as president of Assured Life Re. He has been with Assured Guaranty for over 20 years and has extensive expertise as a structured finance underwriter and the primary originator of the company’s insured exposure to insurance securitisations, including life insurance capital management transactions.

Insurance Advisory Partners LLC served as Assured Guaranty’s exclusive financial adviser on the acquisition, and Debevoise & Plimpton LLP and Conyers Dill and Pearman Limited acted as Assured Guaranty’s legal counsel.