Lincoln National is in advanced talks with Talcott Financial Group for a reinsurance deal that would move billions of dollars of life insurance reserves off its balance sheet, Bloomberg News reported on Monday. The transaction is expected to involve about $5 billion of universal life with secondary-guarantee policies, according to people familiar with the talks. Lincoln National told Bloomberg in an email that it routinely evaluates options that support its strategic objectives and will share information on any transaction decisions when it is able. Policyholders like policies with secondary guarantees because they do not lapse, but they can be expensive for insurers to retain on their balance sheets. Reinsurance deals allow carriers to offset that cost and unlock capital, which can be used to underwrite new annuities and life insurance policies.
Lincoln National CorporationReinsurance deal would free up capital and improve balance sheet.
Talcott is acquiring a large block of policies, expanding its reinsurance business.