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Athene Reinsures $9.6 Billion in Lincoln Annuities

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A unit of Athene Holding Ltd. is now responsible for the obligations owed by a big block of individual annuities written by Lincoln National Life Insurance Company.

Athene Life Re Ltd. announced Monday that it has assumed responsibility for $9.6 billion in fixed deferred and indexed deferred Lincoln National annuities through a 80% quota share arrangement.

(Related: RGA Sees Strong Competition for Annuity Reinsurance Deals)

Lincoln National is a unit of Lincoln Financial Group of Radnor, Pennsylvania.

Athene is a Pembroke, Bermuda-based reinsurer that was founded in 2009 and now manages about $100 billion in invested assets. Earier this year, Athene closed on a deal to reinsure about $19 billion in fixed and indeed annuity liabilities for Voya Financial.

A reinsurer is a company that provides what amounts to insurance for an insurer.

Through a quota share reinsurance arrangement, a reinsurer agrees to share in a set percentage of  the premium revenue and claims associated with part or all of an insurer’s business.

Lincoln National has agreed to cede $7.7 billion in statutory reserves to Athene Life Re to support the block of business now being reinsured. Athene said it has “deployed approximately $700 million of capital in aggregate.”

Athene said it provided some of the $700 million to support the block, and part to pay a ceding commission to Lincoln National.

“Lincoln will continue to service and administer the in-force policies within the block,” Athene said.

Lincoln Financial agreed to an earlier reinsurance treaty with Athene in August 2017. That arrangement, a “flow treaty,” covers newly issued Lincoln Financial fixed and indexed annuities.

Jim Belardi, Athene’s chief executive officer, said in a statement that Athene understands Lincoln Financial’s annuity business well.

The new Lincoln Financial reinsurance treaty “is further evidence that Athene is well-positioned and accepted as a solutions provider of choice,” Belardi said.

— Read Reinsurers Have Traded $60 Billion in Longevity Risk: Rating Agencyon ThinkAdvisor.

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