Under the JV, Värde Partners and Agam will look to carry out the acquisition, reinsurance, and management of life and retirement businesses
Värde Partners, a global alternative investment firm, has signed an agreement with New Jersey-based insurance solutions provider Agam Capital to create a life and retirement solutions joint venture.
Under the joint venture, the partners will look to pursue the acquisition, reinsurance, and management of life and retirement businesses across the world.
It will bring together Värde Partners’ investment management expertise and the insurance solutions platform developed by Agam. It is expected to have the ability to price and handle complex insurance products with embedded market and actuarial risks, on a global basis.
By serving as a turnkey solution for financial modelling and enterprise risk management, the joint venture is expected to offer comprehensive economic solutions to life insurance firms.
Agam’s technology platform is said to utilise machine learning, cloud computing, and predictive data analytics, to assess complex insurance liabilities. The platform is said to incorporate advanced analytical techniques such as integrating transaction modelling with actuarial cash flows.
Agam co-founders on the JV with Värde Partners
Agam co-founders Avi Katz and Chak Raghunathan said: “The need for multi-dimensional solutions to the complex changes facing the life insurance industry has never been greater.
“Against this backdrop, we believe the combination of Värde Partner’s core strengths in complex transactions together with Agam’s differentiated pALM platform will create a world-class insurance solutions provider. In particular, the Agam platform is designed to price, analyze and manage complex insurance products with embedded capital market risks and offers creative structures and solutions on a global basis.”
As part of the launch of the JV, Värde Partners is looking to invest $500m across complex life insurance, annuity, and reinsurance assets. The investment will be supported by the JV, said the alternative investment firm.
Värde Partners said that the investment is part of its intention to grow into targeted sub-sectors of the financial services industry, and will also mark its expansion into insurance.
Värde Partners partner and European financial services head Elena Lieskovska said: “Given the current landscape of historically low interest rates and fundamental regulatory and accounting changes, we believe the opportunity across the $23 trillion life insurance industry is huge.
“Life insurance companies are increasingly seeking risk mitigation solutions for legacy blocks of liabilities with multi-dimensional risks. This is particularly true for complex annuity products, such as those with high guarantees or exposure to certain market risks, which typically attract a higher capital charge.”