Canada's Manulife signs C$5.4 bln reinsurance deal to lower risk (updated)

Reinsurance of America, Incorporated

20/11/2024 22:05

(Adds context on long-term care business in paragraphs 2-3,
detail on buyback plan in paragraph 5)
       Nov 20 (Reuters) - Canada's Manulife Financial  MFC.TO 
will reinsure C$5.4 billion ($3.86 billion) of its reserves as
it looks to transfer some risk from its portfolio and free up
capital for stock buybacks.
    The agreement with Reinsurance Group of America  RGA.N 
covers C$2.4 billion of long-term care reserves, Manulife said
on Wednesday. 
    Long-term care insurance is considered a high-risk business
as it involves coverage for people with chronic or disabling
conditions who need constant care, typically found in
individuals over 65.
    Insurers maintain reserves to pay out claims by
policyholders. By reinsuring those reserves, they can transfer
some of those obligations and unlock capital to underwrite
additional policies or return capital to shareholders.
    Manulife said the latest deal will free up C$800 million of
capital for buybacks. 
    Earlier this year, it had clinched a reinsurance deal with
RGA Life Reinsurance Company of Canada for C$5.8 billion of
reserves. 
    
    ($1 = C$1.3976)

 (Reporting by Niket Nishant in Bengaluru; editing by Alan
Barona)
 ((Niket.Nishant@thomsonreuters.com))