The agreement carries a negative 5% cede and is largely neutral to overall capital.
Manulife Financial Corporation has closed a deal to reinsure $3.2b in long-term care policy reserves with Munich American Reassurance Company, a subsidiary of Munich Re Group.
First announced on 5 August 2026, the transaction fully transfers the biometric risk associated with the long-term care portfolio.
With this agreement finalised, Manulife has cumulatively reduced its long-term care morbidity sensitivity by 24%, combining the impact of previous reinsurance deals.
The agreement features a negative 5% cede, aligning with the pricing of the company’s past transactions. Manulife stated that the move is largely neutral to its overall capital.
The transaction is projected to have an immaterial annual impact on both core earnings and net income attributable to shareholders, estimated at about $30 million in the first year and declining over time.