Athene Life Re (ALRe), a subsidiary of one of Bermuda’s leading retirement services companies, Athene Holding, has entered into a reinsurance agreement with The Lincoln National Life Insurance Company, a subsidiary of Lincoln Financial Group.
Under the agreement, ALRe has agreed to reinsure an 80% quota share of a $9.6 billion in-force block of fixed deferred and fixed indexed annuities on a modified coinsurance basis.
In total, approximately $7.7 billion of statutory reserves will be ceded to ALRe, supported by a diversified portfolio of assets.
Lincoln will continue to service and administer the in-force policies within the block. In order to consummate the transaction, Athene has deployed approximately $700 million of capital in aggregate, which includes capital to support the block and a ceding commission paid by ALRe.
The transaction was dated on 7 December 2018 with an effective date of 1 October 2018. The transaction is expected to be accretive to the company’s 2019 adjusted operating income per share.
At a later date, ALRe may elect to cede a minority share of the liabilities from this transaction to an affiliate.
“Following the flow reinsurance treaty announced last year, we are pleased to deepen our partnership with Lincoln Financial Group through this block reinsurance transaction on business that is well understood by Athene,” said Jim Belardi, Chief Executive Officer of Athene.
“This is further evidence that Athene is well positioned and accepted as a solutions provider of choice because of our expertise, our strong capital position, and our ability to successfully close transactions that build long-term shareholder value.”
Dennis R. Glass, President and CEO of Lincoln Financial Group, added, “As demonstrated by our record third quarter earnings, we remain focused on executing our business strategy, which includes manufacturing and distributing high-quality products.”
“Organic growth momentum remains strong in the fourth quarter. At the same time we are committed to identifying incremental opportunities, like this transaction, to maximize the value of our attractive in-force business to reward shareholders.”
