L&G sells US PRT to Meiji Yasuda for $2.3bn; £1.2bn capital gains

Legal & General Group Plc has completed the disposal of its US insurance operations to Meiji Yasuda Life Insurance Company, in a deal that transfers the group’s US protection and Pension Risk Transfer (PRT) activities for an equity value of $2.3bn in cash. The transaction reshapes L&G’s capital position while setting up a long-term strategic tie-up between the two insurers.

The sale covers the businesses run through Banner Life and William Penn and comes with an immediate capital benefit. The group reports a Solvency II capital generation of £1.2bn originating from net proceeds of £1.8bn, after adjusting for the Own Funds attributed to the sold business (c.£1.0bn) and a release of solvency capital requirement of c.£0.4bn. On an IFRS basis the transaction is expected to produce an accounting profit of more than £1.3bn.

Alongside the sale, Meiji Yasuda will take a 5% economic interest in L&G, signalling a deeper corporate alignment beyond a standard buyer–seller relationship. L&G said the partnership will combine its US execution capability with Meiji Yasuda’s balance-sheet strength to accelerate US PRT activity under Banner Life — a market where annual deal volumes routinely exceed $40bn.

Operationally the move should not reduce L&G’s ambition in the US PRT market: the group wrote roughly $1.8bn of premium across about 15 PRT transactions in 2025 via Banner Life and William Penn. The partnership, the companies say, aims to sustain service levels for policyholders while scaling transaction execution and product innovation in a large and growing PRT market.

Financial discipline is a clear driver. L&G intends to return an additional £1bn from the proceeds to shareholders, bringing the group’s total planned share buyback for 2026 to £1.2bn. Pro forma metrics presented by the group indicate an uplift of around 7 percentage points in the Full Year 2025 Solvency II coverage ratio after accounting for the buyback.

António Simões, Group Chief Executive of L&G, described the transaction as a combination of balance-sheet strengthening and strategic repositioning: it releases capital, supports enhanced shareholder returns and creates a partner to accelerate US PRT growth. The arrangement also provides Meiji Yasuda with a foothold in L&G equity while giving L&G access to additional firepower for future PRT activity.

For investors and market watchers the deal underlines two trends: continued insurer appetite to optimise capital via targeted disposals, and the attractiveness of US PRT for global life insurers seeking long-duration assets and predictable cash flows. With the US market’s scale and L&G’s demonstrated dealflow, the partnership could become a notable platform for pension liability transfers in the coming years.