Athene raises €2.2 bn capital to invest in the European run-off life market

Bermuda-based Athene Holding has raised €2.2 billion common equity investment to support capital and reinsurance transactions in the German and European guaranteed life insurance run-off market.

The holding company of Athene's German Group Companies, AGER Bermuda, announced that it has received the binding subscriptions for the capital raise that was conducted through a private placement of common equity securities. According to the company, it is the largest ever dedicated equity capital commitment to European (excluding UK) run-off life insurance.

The capital raised from Athene and a number of global institutional investors is permanent equity capital and does not include any financial leverage.

Athene will be a large minority shareholder in AGER, having committed up to €375 million in the offering.

In addition, Athene said that it expects to be a long-term strategic partner for AGER and will support its business in a number of different ways. As part of the long term partnership, Athene will be a preferred reinsurer for AGER’s spread liabilities.

"We see an unprecedented need in the German and broader European market for equity capital and reinsurance solutions to support run-off portfolios and closed block reinsurance transactions, particularly those with high guarantees," said Deepak Rajan, executive vice president at AGER.

"The closing of this capital commitment will allow us to complete transactions of significant scale across various European jurisdictions. We are delighted by the high quality nature of our investor base and believe this represents an industry solution to the issue of high cost legacy liabilities across Europe. Given the support of Athene, we believe that we are a highly credible counterparty for European insurers and provide them with the execution certainty they need," Rajan added.

AGER said that its strategy is to provide assistance to existing insurers by allowing them to free up capital, management capacities and operating resources through the sale or reinsurance of legacy portfolios or companies.

Ina Kirchhof, CEO of Athene Leben (AGER's principal operating subsidiary Athene Lebensversicherung), commented: "We are well-positioned to seize appropriate opportunities in the German and European run-off market with our core operating principles of policyholder protection as well as high quality asset and risk management. Policyholder satisfaction remains a top priority for us as we develop our company over the long term."

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