Lincoln Financial Makes $28B Life and Annuity Reinsurance Deal

Lincoln Financial Group today announced a $28 billion reinsurance deal with Fortitude Reinsurance.

The Radnor, Pennsylvania-based life insurer said the deal include $12 billion in reserves related to its MoneyGuard policies, which offer long-term care benefits tied to life insurance policies, or about 80% of total reserves for in-force MoneyGuard policies.

The deal also includes $9 billion in reserves for universal life policies with secondary guarantees, or 40% of the reserves for that type of business, and $8 billion in reserves for fixed annuities, or 40% of the reserves for the company’s fixed annuities.

Fortitude Re is backed by a consortium of investors led by the Carlyle Group and T&D Insurance Group. In 2022, it acquired a $31 billion block of variable annuities from Prudential Financial. It has offices in Brentwood, Tennessee; Jersey City, New Jersey; and Hamilton, Bermuda.

What It Means

Ellen Cooper, Lincoln’s CEO, said the Fortitude Re deal will help Lincoln reduce risk levels and improve its capital position.

When the deal closes, it should increase Lincoln’s risk-based capital ratio, a measure of risk, by 0.15 percentage points, and increase cash flow by $100 million per year, the company said.

Preliminary Earnings

In related news, Lincoln gave investors an early look at its earnings.

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