Voya Financial has agreed to divest parts of its annuities businesses to a group of investors led by Apollo Global Management and its affiliates, Crestview Partners and Reverence Capital Partners.
The deal includes Voya’s individual fixed and fixed-indexed annuity business and almost all of its closed block variable-annuity (CBVA) business.
Following the completion of the sale, the New York-based firm will focus mainly on its employee benefits, investment management and retirement businesses.
The sale is expected to significantly reduce market and insurance risk for Voya.
Voya Financial chairman and CEO Rodney O. Martin, Jr., said: “Through this transaction, we are further demonstrating our commitment to delivering shareholder value by eliminating the risk associated with the CBVA segment and securing significant value for our Annuities business.
“Since we became a standalone company in 2013, we have focused on growing our capital-light businesses — specifically, Retirement, Investment Management and Employee Benefits. This transaction accelerates that focus and positions Voya to expand its leadership position as one of the foremost retirement, asset management and employee benefits companies in the US.”
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Voya will dispose of Voya Insurance and Annuity Company (VIAC) to Venerable Holdings, a newly established investment vehicle owned by a consortium of investors led by Apollo, Crestview and Reverence. VIAC operates as an insurance subsidiary and has primarily issued Voya’s variable, fixed and fixed indexed annuities.
Athene Holding as well as Voya will also participate in this consortium, with Voya having a 9.9% equity stake in Venerable.
After completion of VIAC, Venerable will manage substantially all of the variable annuities in Voya’s CBVA segment with account value of approximately $35bn based on 30 June 2017, balances.
Concurrent with the sale of VIAC, Athene Holding has entered into an agreement with Voya Financial to reinsure about $19bn of fixed and fixed indexed annuity liabilities, representing the significant majority of Voya’s fixed and fixed indexed annuities in force. Voya plans to stop manufacturing non-retirement-focused individual annuities after completion of the deal.