Global life and health reinsurer Reinsurance Group of America (RGA) and John Hancock, a subsidiary of Manulife Financial Corporation, announced a reinsurance agreement covering approximately US$4.1 billion in liabilities.
The agreement includes US$1.9 billion in long-term care (LTC) liabilities and US$2.2 billion in structured settlements. This transaction builds on the ongoing partnership between RGA and Manulife, which spans multiple business lines and international markets.
The reinsured LTC block consists of policies issued in 2007 or later, which align with RGA’s existing LTC portfolio. The structured settlements block leverages RGA’s experience in longevity risk and its 25-year history providing asset-intensive reinsurance solutions.
Both transactions are full-risk, with RGA co-insuring a 75% quota share, while John Hancock retains the remaining 25%. RGA will also continue supporting John Hancock's growth in US permanent life business through yearly renewable term reinsurance arrangements.
Ron Herrmann (pictured above), executive vice president and head of the Americas at RGA, said the transaction highlights the strength of the partnership with Manulife and aligns with RGA’s expertise in biometric risks and asset management.
“We are excited to announce another mutually beneficial transaction with Manulife and are grateful for their continued trust in RGA,” he said. “The acquired LTC block aligns well with our existing LTC portfolio, and both blocks will benefit from our diverse asset capabilities.”
Axel André, RGA’s executive vice president and chief financial officer, said that the transaction is funded through existing internal capital resources and is projected to boost RGA’s earnings in 2025 while delivering attractive returns on capital.
The announcement further cements the partnership between RGA and Manulife. Earlier this year, the two companies executed a major coinsurance transaction for universal life business in Canada, adding to a series of previous transactions optimizing portfolios in Canada and the US.
RGA said that it continues to support Manulife across regions, including biometric reinsurance, product development, and underwriting partnerships.
Sidley Austin LLP acted as legal advisor to RGA for the transaction, which is expected to close in early 2025, pending customary conditions. John Hancock will continue administering all policies under the arrangement.
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