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Lincoln Financial Group Announces Flow Reinsurance Transaction With Talcott Resolution
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Rhea-AI Summary
Lincoln Financial Group (NYSE: LNC) has announced a new agreement with Talcott Resolution Life Insurance Company to reinsure up to $1.5 billion in sales of its variable annuity living benefit rider. The reinsurance covers business issued between April 1, 2021 and June 30, 2022. This transaction aligns with Lincoln's strategy to enhance value for shareholders, maintain growth in the variable annuity sector, and will not affect its commitments to distribution partners and policyholders.
Positive
New agreement to reinsure up to $1.5 billion in sales boosts shareholder value.
Strategic move enhances growth potential in the variable annuity business.
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None.
Transaction will reinsure up to $1.5 billion in sales
RADNOR, Pa.--(BUSINESS WIRE)--
Lincoln Financial Group (NYSE: LNC) today announced it has entered into an agreement with Talcott Resolution Life Insurance Company to reinsure up to $1.5 billion in sales of Lincoln’s flagship variable annuity living benefit rider. The transaction covers business issued from April 1, 2021, through June 30, 2022.
“Recent industry transactions reflect an active reinsurance market with attractive pricing, and we are extremely pleased to announce this flow reinsurance agreement on the heels of the life block transaction that we announced last week,” said Dennis R. Glass, president and CEO of Lincoln Financial Group. “This transaction is another example of how we employ creative solutions, such as block and flow deals across our businesses, to maximize value for our shareholders.”
“We are excited to enter into this relationship with Talcott and will continue to explore opportunities to build on this partnership,” said Ellen Cooper, executive vice president, Chief Investment Officer, Head of Enterprise Risk and Annuity Solutions of Lincoln Financial Group. “This transaction is in line with our strategy to continue to grow the variable annuity business while maintaining a good mix of sales with and without long-term guarantees. The terms of the reinsurance transaction match our rigorous new business pricing while enhancing the return on the business retained.”
Under the terms of the reinsurance agreement, Lincoln Financial will retain account administration and recordkeeping of the annuity policies. Lincoln Financial will cede $1.5 billion of living benefit riders but retain 100% of the base contract cash flows. The transaction will have no impact on Lincoln Financial’s relationship with, or commitments to, its distribution partners and policyholders. Additionally, Lincoln Financial remains focused on the continued growth of its variable annuity business, with plans to introduce new products and further expand distribution to achieve successful long-term growth.
The transaction is dated September 17, 2021 and is structured as a coinsurance treaty with a comfort trust to mitigate counterparty credit risk.
About Lincoln Financial Group
Lincoln Financial Group provides advice and solutions that help people 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, and 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 $324 billion in end-of-period account values as of June 30, 2021. Lincoln Financial Group is a committed corporate citizen included on major sustainability indices including the Dow Jones Sustainability Index North America and FTSE4Good. Dedicated to diversity and inclusion, we earned perfect 100 percent scores on the Corporate Equality Index and the Disability Equality Index, and rank among Forbes’ Best Large Employers and Best Employers for Women, and Newsweek’s Most Responsible Companies. Learn more at: www.LincolnFinancial.com. Follow us on Facebook, Twitter, LinkedIn, and Instagram. Sign up for email alerts at http://newsroom.lfg.com.
What is Lincoln Financial Group's new reinsurance agreement with Talcott Resolution Life Insurance Company about?
Lincoln Financial Group's agreement with Talcott Resolution involves reinsuring up to $1.5 billion in sales of its variable annuity living benefit rider, covering the period from April 1, 2021, to June 30, 2022.
How does the reinsurance deal impact Lincoln Financial Group's financial strategy?
The reinsurance deal is part of Lincoln Financial Group's strategy to enhance shareholder value and grow its variable annuity business without affecting existing commitments to distribution partners.
When was the reinsurance transaction with Talcott Resolution announced?
The reinsurance transaction with Talcott Resolution was announced on September 17, 2021.
What is the significance of the $1.5 billion reinsurance agreement for Lincoln Financial Group (NYSE: LNC)?
The $1.5 billion reinsurance agreement signifies a proactive approach to managing risk and maintaining growth in the variable annuity sector, reinforcing the company's financial stability.
