Venerable Holdings, a provider of risk transfer solutions to variable annuity issuers, is to recapture approximately $2.8 billion of payout annuity reserves from Athene.
In a recent announcement, Venerable stated it has agreed for its wholly-owned subsidiary Venerable Insurance and Annuity Company (VIAC), to recapture the annuity blocks from the retirement services company.
The business principally comprised of guaranteed minimum income benefit (GMIB) rider annuitization and annuitized fixed annuity contracts, all previously reinsured with Athene.
According to the announcement, Venerable will continue to administer these contracts following the recapture.
“This agreement demonstrates continued execution of our growth strategy, enhancing Venerable’s liquidity position and improving the strength and stability of our cash flow profile,” said David Marcinek, Chairman and CEO of Venerable. “We appreciate the opportunity to partner with Athene to create value for both organisations.”
The transaction is expected to increase Venerable’s payout annuity reserves by approximately 57% such that Venerable’s payout business constitutes approximately 33% of projected annual cash flow.
Venerable’s overall projected annual cash flow is estimated to increase by approximately 15%.
“We have had a strong relationship with Venerable since its inception, and as a long-term shareholder, we are pleased to partner with David and team in structuring a mutually beneficial transaction,” said Grant Kvalheim, President of Athene.
“Athene will free up capital supporting this block of business and expects to redeploy it in support of our substantial organic growth aspirations at a time when we have the opportunity to capture particularly attractive spreads,” he added.
