Fidelity National Prepares to Spin Off Part of Annuity Unit

Chris Blunt (Photo: American College)

What You Need to Know

Fidelity National CEO Mike Nolan says his company’s share price doesn’t reflect how well F&G has been doing.
A new F&G stock would trade on the New York Stock Exchange.
Fidelity National will keep an 85% stake in F&G because F&G stands to benefit from rising interest rates, Nolan says.

Fidelity National Financial is preparing to give a 15% stake in its F&G Annuities & Life subsidiary — the unit that holds Fidelity & Guaranty Life Insurance Co. — to its shareholders.

Fidelity National is the Jacksonville, Florida-based title insurer that acquired F&G in June 2020.

F&G is a Des Moines, Iowa-based life and annuity issuer that has focused on selling nonvariable indexed annuities, multiyear guaranteed annuities and fixed indexed universal life insurance.

Mike Nolan, Fidelity National’s CEO, said in a comment, included in the partial spinoff announcement, that the F&G deal has worked out better than Fidelity National had expected, but that Fidelity National’s share price does not reflect how well F&G has been doing.

“We believe that the best way to unlock this value is to publicly list F&G through a dividend to our shareholders,” Nolan said.

The new F&G stock would trade on the New York Stock Exchange.

What It Means

If F&G has its own NYSE stock listing, it will show up on the stock information ticket windows at the bottom of the CNBC and Fox Business screens.

F&G will release its own separate earnings every quarter, and Chris Blunt, F&G’s CEO, will likely speak on conference calls the company holds to go over its performance with securities analysts every three months.

See also  91 pc people consider purchasing life insurance necessary; only 70 pc willing to invest: Survey - Devdiscourse

The proposed spinoff could lead securities analysts, investors and financial news organizations to focus a little more attention on annuities and retirement security every three months.

Deal Details

The Fidelity National board approved the proposed spinoff in March.

They intend to structure the spinoff as a taxable dividend and complete the distribution by Sept. 30.

Fidelity National would help keep F&G well capitalized by converting a $400 million intercompany loan into F&G stock before the F&G stock distribution takes place.