Prudential PLC, the parent of Jackson National Life Insurance Company, has managed to overcome COVID-19, low interest rates and social turmoil and negotiate a giant annuity reinsurance deal with Athene Holding Ltd.
The deal involves about $27 billion in traditional fixed annuity and indexed annuity liabilities.
Jackson will get about $1.25 billion in ceding commissions from Athene.
Athene is investing $500 million in Jackson and getting a 9.9% voting interest in Jackson.
- A link to a deal presentation is available here.
- An article about Prudential PLC’s interest in making a Jackson deal is available here.
The deal should lead to a sharp increase in Jackson’s risk-based capital ratio, and give the company the capital it needs to grow, according to Michael Falcon, Jackson’s chief executive officer.
Falcon said, in a comment included in the deal agreement announcement, that Athene and Jackson share the goal of “serving the growing population of American savers transitioning into and through retirement.”
Jim Belardi, Athene’s CEO, said in comments included in the deal announcement that Athene sees the deal as being mutually beneficial.
“This compelling transaction enables us to grow our gross invested assets by approximately 20% with predictable liabilities we know well,” Belardi said.
The reinsurance transaction is effective from June 1, 2020.
The companies expect Athene’s investment in Jackson to close in July.