Athene expresses interest in GE insurance assets
June 30, 2018 by Bloomberg
NEW YORK • Athene Holding Ltd, an annuity seller with ties to Apollo Global Management LLC, expressed interest in buying some or all of General Electric Co’s (GE) insurance business, according to a person familiar with the matter who asked not to be identified because the talks are private.
GE announced on Tuesday that it was exploring options to cut back on insurance exposure.
That comes months after the industrial company said it would take a US$6.2 billion (RM24.8 billion) charge related to an old book of long-term care policies, coverage that pays for nursing home stays or home health aides. The Financial Times reported Athene’s interest earlier on Wednesday.
“Our sense is that Athene would assume fixed annuity and/ or other spread-based assets, while a separately structured independent vehicle, likely run by Apollo, would acquire GE’s longterm care assets,” Andrew Kligerman, an analyst at Credit Suisse Group AG, said in a note on Wednesday. Athene “has historically stated that it will consider anything with net investment spread, but is not interested in morbidity exposure”.
GE hasn’t done business in the long-term care insurance market since 2006 but still retains some policies written years ago. Those types of policies proved troublesome for some insurers as medical costs rose and people live longer. GE said in January that the Securities and Exchange Commission is looking at the accounting practices tied to the firm’s insurance business and some agreements in a power- equipment unit.
CEO John Flannery has been seeking to reshape GE as it grapples with cashflow issues and weak demand for some products.
