President of Athene Holding, Bill Wheeler, has praised the company’s “important” flow reinsurance deal with Lincoln Financial Group, underlining the benefits of having an offshore strategy in the market.
Athene Holding announced in early August that it had finalised a flow reinsurance treaty with Lincoln Financial Group, and President of the firm, Wheeler, discussed the arrangement during Athene’s Q2 2017 earnings call following questions from investors.
“It’s going to be an important deal for us,” said Wheeler, explaining that the expectation from both parties is that the agreement will improve the competitive pricing of Lincoln’s product set, ultimately boosting sales.
In return, Athene gets a percentage of the flow of that business, and “I think it’s a good deal for Lincoln and I think they’re excited. And obviously, that means for Athene it’s a very important deal,” said Wheeler.
Lincoln, explained Wheeler, are one of the bigger traditional annuity players eager to enter and expand in the fixed market. Variable annuity sales are on the decline, says Wheeler, and everyone is looking to increase their share of indexed and traditional fixed annuities business.
To be succesful in the changing landscape and achieve attractive returns with a competitive product, Wheeler underlined the importance of having some kind of offshore solution.
“It doesn’t mean you have to be a Bermuda holding company yourself, but you better have a Bermuda reinsurance part. And because I think most successful companies in this market are going to have that kind of a strategy, I don’t think Lincoln will be the last of these deals done,” said Wheeler.
Adding; “So we think there’s going to be a lot more activity and we’re excited about that because we’re the biggest Bermuda reinsurer and we’re very focused on these types of transactions.”