Manulife and RGA announce new $5.4bn reinsurance agreement

Written by Michael Griffiths

21/11/2024

Reinsurance Group of America (RGA) has entered into a new $5.4bn reinsurance agreement with Manulife.

The deal includes $2.4bn worth of long-term care reserves.

Manulife confirmed that the combined $5.4bn of reserves will be across two blocks of legacy business to RGA and include portions of US LTC and structured settlements. The $2.4bn LTC block represents 6% of Manulife’s total LTC reserves.

RGA, which already has multiple existing reinsurance arrangements with Manulife, said the transaction includes “significant structural protections”, including over-collateralised trusts to hold investment assets.

“We are further unlocking significant shareholder value with a second milestone LTC reinsurance transaction within 12 months, which accelerates our transformation to reshape our portfolio towards higher return and lower risk,” Manulife president and CEO, Roy Gori, commented.

Global head of strategy and inforce management at Manulife, Marc Costantini, added: “Together with our previously completed LTC transaction, we will have cumulatively reduced our LTC reserves by 18% within a year, upon closing, meaningfully improving the return profile of our inforce business.

“The pricing of this transaction further validates our prudent LTC reserves and assumptions. There continues to be attractive opportunities to generate shareholder value through organic LTC optimisation, and we remain open to further inorganic opportunities.”

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