Athene completes $19bn fixed annuity reinsurance deal

Bermuda-based Athene Holding has entered into an agreement with Voya Financial to reinsure approximately $19 billion of fixed and fixed indexed annuity liabilities.

“We are excited to enter into this agreement with Voya, which is highly strategic for Athene and a compelling example of how our association with Apollo enables us to deliver creative solutions to the insurance industry. The large block of fixed annuities we will be reinsuring are products Athene understands well, and they present a meaningful asset redeployment opportunity,” said Jim Belardi, CEO of Athene.

“Amid a historically tight credit spread environment, we expect this transaction to achieve our mid-teens return target, leaving us well-positioned for incremental value creation in a more favorable credit spread environment or through enhanced asset management.”

In connection with the transaction being announced today, Athene has also secured the rights to reinsure liabilities that will be created from the subsequent annuitization of certain of Venerable’s (as described below) variable annuities to fixed payout annuities which is estimated to total approximately $8 billion over the life of the block, ensuring a significant flow of future liabilities for Athene on an annual basis. In addition, the transaction provides Athene with the opportunity to meaningfully augment its organic distribution by pursuing Voya’s existing annuity distribution relationships.

In addition, a consortium of investors, led by affiliates of Apollo Global Management, Crestview Partners and Reverence Capital Partners, has agreed to purchase Voya Insurance and Annuity Company, including its Closed Block Variable Annuity segment, and create a newly formed standalone entity that will administer the fixed and variable annuity blocks.