Manulife enters into reinsurance agreement worth 5.4 billion

Manulife enters into reinsurance agreement worth 5.4 billion
Manulife enters into reinsurance agreement worth 5.4 billion

(Toronto) Manulife Financial Corporation announced that it has reached another agreement to shed low-yielding assets through a $5.4 billion reinsurance deal.


Published yesterday at 5:50 p.m.

The insurer says the deal with Reinsurance Group of America includes $2.4 billion in long-term care reserves, which may be more difficult to transfer because they are considered higher risk.

Reinsurers assume the risk of insurance policies and a portion of their premiums, helping insurers like Manulife free up capital.

The latest deal follows two other large reinsurance deals for Manulife over the past year, including a $13 billion deal last December that also included long-term care, and a $5.8 billion deal in March.

Chief Executive Officer Roy Gori said in a statement that the company is unlocking shareholder value with a second long-term care deal to help it steer its portfolio toward higher yield and lower risk.

Manulife says the deal is expected to free up $800 million in capital, which it plans to return to shareholders through share buybacks.


Business

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