RADNOR, Pa.--(BUSINESS WIRE)--Lincoln Financial Group (NYSE: LNC) today announced it has entered into an agreement with a subsidiary of Athene Holding Ltd. (NYSE: ATH), to reinsure approximately $7.7 billion of in-force fixed and fixed indexed annuity products. The capital generated from the transaction, including a ceding commission paid by Athene combined with the release of capital, will predominantly be used to fund share repurchases up to $500 million, most of which will be executed through an accelerated share repurchase program. The transaction is expected to be accretive to Lincoln Financial's earnings per share in 2019.
“As demonstrated by our record third quarter earnings, we remain focused on executing our business strategy, which includes manufacturing and distributing high-quality products,” said Dennis R. Glass, president and CEO of Lincoln Financial Group. “Organic growth momentum remains strong in the fourth quarter. At the same time we are committed to identifying incremental opportunities, like this transaction, to maximize the value of our attractive in-force business to reward shareholders.”
Under the terms of the reinsurance agreement, Lincoln Financial will retain account administration and recordkeeping of the annuity policies. The transaction will have no impact on Lincoln Financial’s relationship with, and commitments to, its distribution partners and policyholders. Additionally, Lincoln Financial remains focused on the continued growth of both its fixed and variable annuity businesses, with plans to introduce new products and further expand distribution partners to achieve successful long-term growth.
The transaction was dated December 7, 2018 and is effective as of October 1, 2018. The agreement is structured as a modified coinsurance treaty with counterparty protections around investment guidelines and overcollateralization established to meet Lincoln Financial’s risk management objectives.
Goldman Sachs & Co. LLC acted as financial advisor to Lincoln Financial.
About Lincoln Financial Group
Lincoln Financial Group provides advice and solutions that help empower people to take charge of their financial lives with confidence and optimism. Today, more than 17 million customers trust our retirement, insurance and wealth protection expertise to help address their lifestyle, savings and income goals, as well as to guard against long-term care expenses. Headquartered in Radnor, Pennsylvania, Lincoln Financial Group is the marketing name for Lincoln National Corporation (NYSE:LNC) and its affiliates. The company had $262 billion in assets under management as of September 30, 2018. Lincoln Financial Group is a committed corporate citizen included on major sustainability indices including the Dow Jones Sustainability Index North America and FTSE4Good. Additionally, Lincoln is dedicated to upholding a diverse and inclusive organization and was recognized by Forbes as one of the Best Large Employers, Best Employers for Diversity, and Best Employers for Women in 2018 and received a perfect score of 100 percent in 2018 on both the Corporate Equality Index and Disability Equality Index. Learn more at: www.LincolnFinancial.com. Follow us on Facebook, Twitter, LinkedIn, and Instagram. Sign up for email alerts at http://newsroom.lfg.com.