Dutch life insurer AEGON has signed an agreement to sell the last substantial block of its US life reinsurance business to SCOR Global Life.

The deal is part of the company’s Aegon strategic objective to decrease the sum of capital allocated to its run-off businesses.

Pursuant to the terms of the agreement, Aegon’s Transamerica life subsidiaries will reinsure about $700m of liabilities through SCOR Global Life.

The transaction includes the last substantial block of life reinsurance business that Transamerica retained after it sold the majority of its reinsurance business to SCOR Global Life in 2011 and 2017.

The deal is expected to result in one-time benefit of almost $50m on Transamerica’s capital position for and a slightly positive effect on recurring capital generation.

Aegon said that the transaction is likely to result in a pre-tax IFRS loss of approximately $105m and will be reported in other charges in the second half 2018 results.

After completion of the deal, Aegon will slash the size of a related captive insurance company and the related letter of credit facility.