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June 04, 2018 at 02:19 PM
Athene Holding Ltd. says it has now taken responsibility for $19 billion in fixed and indexed annuity liabilities from Voya Financial Inc.
Athene says it and an investor group have also bought a stake in Venerable Holding Inc. Venerable is a new entity that will administer the blocks of fixed and variable annuities written by Voya Insurance and Annuity Company
(Related: Voya to Exit Most of Its Annuity Business)
Once holders of Voya’s variable annuities convert their annuities into payout annuities, to collect income, Athene will get to reinsure that annuity payment flow. Athene could end up reinsuring about $8 billion in payment flow through that arrangement, according to Athene.
Athene says in a report filed with the U.S. Securities and Exchange Commission Friday that it paid a ceding commission of about $396 million to Voya Insurance and Annuity Company and to another Voya subsidiary, ReliaStar Life Insurance Company, in connection with the reinsurance deal.
Athene is a Pembroke, Bermuda-based holding company with about $113 billion in assets, and stock that trades on the New York Stock Exchange under the symbol ATH. Athene announced the signing of a major reinsurance agreement with Voya in December.
Apollo Global Management LLC leads the investor group helping Athene finance the reinsurance arrangement. Apollo Global Management is a publicly traded company that manages about $249 billion in assets, according to an order approving the Voya reinsurance arrangement posted on the website of the Iowa Insurance Division.
Interest rates have been rising in recent months. Jim Belardi, Athene’s chief executive officer, said in a statement about the reinsurance transaction that rising rates should make the Voya reinsurance deal more profitable for Athene.
“This landmark transaction demonstrates how our expertise and unique, value-added association with Apollo position us to provide customized solutions to take advantage of the ongoing restructuring in the life insurance industry,” Belardi said.
