Athene Completes $19 Billion Voya Annuity Reinsurance Deal

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.

Effects on Agents

Athene has been a big writer of indexed annuities. The Voya deal could make it a more formidable player in that market.

Voya had put its variable annuity operation in “run-off mode,” meaning that it was collecting variable annuity considerations, and making variable annuity benefits payments, but not actively marketing new variable annuity contracts.

Athene and Voya had to get approval for the deal from Iowa Insurance Commissioner Doug Ommen, and the Iowa Insurance Division held a hearing on the matter in March.

Athene asked Ommen for permission to file an exhibit describing it and Venerable’s future plans for the Voya annuity block confidentially.

Ommen wrote in the order approving the Athene reinsurance agreement application that he expects Venerable to keep the existing Voya Insurance and Annuity Company operations in West Chester, Pennsylvania, and Des Moines Iowa, and for the Voya Insurance senior leadership team to join Venerable.

Athene managers said  when they announced the reinsurance arrangement, in December, that the transaction “provides Athene with the opportunity to meaningfully augment its organic distribution by pursuing Voya’s existing annuity distribution relationships.”

— Read also, on ThinkAdvisor:

• AIG Is Said to Have Weighed $10 Billion Voya Financial Deal
• ING Raises $2 billion in Voya Exit, Expects $317 Million Profit
• ING U.S. to Become Voya Financial

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