Lincoln Financial signs flow reinsurance deal with Talcott Resolution

Lincoln Financial Group has signed a flow reinsurance deal with Talcott Resolution Life Insurance Company under which the latter will reinsure up to $1.5 billion in sales of its flagship variable annuity living benefit rider.

As per the reinsurance agreement, Lincoln Financial will keep with itself administration of accounts and recordkeeping of the annuity policies.

Lincoln Financial will cede living benefit riders worth $1.5 billion. However, the Pennsylvania-based insurance company will fully retain the base contract cash flows.

Dennis R. Glass — president and CEO of Lincoln Financial Group said: “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.

“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.”

Lincoln Financial said that the flow reinsurance deal will not have any effect on its relationship with, or commitments to, its distribution partners as well as policyholders.

Apart from that, Lincoln Financial will focus on the continued expansion of its variable annuity business, with plans to launch new products and further grow distribution for successful long-term growth.

Pete Sannizzaro — CEO and president of Talcott Resolution Life Insurance Company said: “This flow transaction is a solution not seen in the market in recent years and, as our first reinsurance transaction under Sixth Street ownership, is an important milestone for us.

“Lincoln is a proven, prudent underwriter and risk manager in the variable annuity business, and our experienced team of industry professionals was able to deliver a solution that met its needs. We look forward to growing our business as a reinsurance provider and insurance aggregator by continuing to offer creative solutions for our partners.”

The deal covers business issued from 1 April 2021 through 30 June 2022.