Manulife enters into $5.4b reinsurance agreement with Reinsurance Group of America

The transaction is expected to close in early 2025.

Manulife has entered into a $5.4b reinsurance agreement with Reinsurance Group of America (RGA), covering $2.4b of long-term care (LTC) reserves.

The agreement involves reinsuring two blocks of legacy business, including portions of US LTC and US structured settlements, to RGA.

The transaction is priced at approximately 1.0 times book value, with a modest negative ceding commission on LTC and a nominal ceding commission on the structured settlements block.

It also includes a legacy block of US structured settlements with $3b of reserves.

Manulife will dispose of $1.5b of alternative long-duration assets but will continue administering all reinsured policies to ensure customer service continuity.

The transaction is expected to close in early 2025, pending customary closing conditions.