(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.
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