Athene interested in GE’s LTC insurance business

Athene Holding, the life insurance affiliate of private equity firm Apollo Global Management, has expressed interest in acquiring all or parts of General Electric’s troubled long-term care insurance business, according to a Financial Times report citing two people familiar with the matter.

GE is working with investment bankers to find ways to shed its insurance business.

The insurance business has caused GE to book hefty charges while sparking shareholder lawsuits and an investigation by US regulators.

In January 2018 GE took an after-tax GAAP charge of $6.2 billion for the fourth quarter of 2017 on its legacy insurance portfolio.

GE also decided to set aside a further $15 billion in reserves to help cover liabilities in insurance operations held by its GE Capital unit, mainly concerning long-term care (LTC) policies.

Many providers of LTC insurance, including GE, underestimated the cost of servicing policies, meaning premiums have been unable to cover the spiralling costs of healthcare and longer life expectancy.

While GE’s insurance operations have stopped generating new business, existing contracts managed to maturity in a process known as run-off have become a major financial burden for the US industrial conglomerate.

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