AXA Equitable Holdings has agreed to divest its US Financial Life Insurance Company and MONY Life Insurance Company of the Americas to Heritage Life Insurance Company.
The deal is expected to close next year after receiving regulatory approval and satisfying other closing conditions.
US Financial Life Insurance Company (USFL) and MONY Life Insurance Company of the Americas (MLICA) have a combined net statutory reserve of around $1bn.
The insurer said that the deal is part of its imitative to make its balance sheet toward a higher capital return and less capital-intensive portfolio mix.
AXA did not reveal the total value of the deal as it is expected to change depending on the financial condition before closing the deal.
AXA Equitable Holdings were advised by Wells Fargo Securities while Sidley Austin provided legal advice to Heritage Life Insurance Company.
AXA Equitable Holdings CFO Anders Malmstrom said: “This transaction simplifies our balance sheet and is aligned with our strategy to improve the return on capital of our Protection Solutions segment.”
Last month, AXA decided to phase out insurance and investment exposure to coal in the European Union (EU) and OECD countries by 2030.
In March, AXA divested around 76 million shares, equal to 12% stake, in AXA Equitable for $1.5bn.
After the completion of the transaction, AXA’s ownership in its American life insurance business decreased from 60.1% to 48.3%.