Reinsurance Group of America (RGA) announced it will reinsure about $4 bn of John Hancock’s legacy blocks, a subsidiary of Manulife Financial Corp. This includes nearly $2 bn in long-term care (LTC) reserves, with the rest allocated to structured settlements.
Axel André, RGA’s CFO, stated the deal leverages internal capital resources and is expected to boost RGA’s earnings in 2025, delivering strong capital returns.
The LTC block comprises policies issued in 2007 or later, closely aligning with RGA’s existing LTC portfolio.
Manulife anticipates the transaction to close early next year. Coupled with a prior multibillion-dollar deal finalized in February with Global Atlantic, Manulife projects an 18% reduction in LTC reserves and a 17% drop in LTC morbidity sensitivity.
The agreements operate on a full-risk basis, with RGA reinsuring a 75% quota share, leaving John Hancock with 25%. RGA also plans to support John Hancock’s growth in U.S. permanent life business through renewable term reinsurance.
Ron Herrmann, RGA’s Executive Vice President and Head of the Americas, highlighted RGA’s expertise in biometric risks and asset management, emphasizing their ability to manage both sides of the balance sheet to deliver tailored long-term solutions.
