The transaction involves a full transfer of biometric risk on the specified block of policies without transferring underlying assets. According to the company, this structure remains largely capital-neutral, with an estimated initial annual impact of approximately $30 million on core earnings and net income, a figure expected to diminish over time. By executing this agreement, Manulife will have achieved a cumulative 24% reduction in its long-term care morbidity sensitivity since beginning its series of risk-transfer initiatives.
Manulife Strikes $3.2 Billion Long-Term Care Reinsurance Deal
Manulife Financial Corporation has reached an agreement to reinsure a $3.2 billion block of long-term care policies with Munich American Reassurance Company. The deal marks the Toronto-based insurer’s third major move in under three years to shift biometric risk and streamline its in-force portfolio ahead of a planned fourth-quarter closing.
Phil Witherington, President and CEO of Manulife, noted that the move reflects a broader effort to strengthen the firm’s business through targeted risk reduction. Pricing for this block aligns with the company’s previous reinsurance deals, featuring a modest 5% cede that management suggests validates their current reserve assumptions. Pending regulatory approvals, the company expects to finalize the transfer by the end of 2026, continuing a strategy of using standalone reinsurance blocks to manage exposure and enhance long-term risk-adjusted returns.
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