The transaction involves a full transfer of biometric risk on the specified policy block, though it excludes any asset transfer. By moving these reserves to the Munich Re Group subsidiary, Manulife continues a strategic shift aimed at reducing its overall risk profile. Upon completion of the deal, the company will have achieved a cumulative 24% reduction in its long-term care morbidity sensitivity.
Manulife offloads $3.2 billion in long-term care risk to Munich Re
Manulife Financial Corporation has reached an agreement to reinsure a $3.2 billion block of long-term care policies with Munich American Reassurance Company. The deal, expected to close in the fourth quarter of 2026, marks the Toronto-based insurer’s third major effort in under three years to prune its exposure to long-term care volatility.
Phil Witherington, Manulife’s President and CEO, characterized the agreement as a validation of the company’s current reserve assumptions, noting pricing terms consistent with previous reinsurance arrangements. While the move is largely neutral to the company's capital position, it carries an immaterial annual impact on core earnings and net income—estimated at approximately $30 million in the first year—which is expected to diminish over time. The company views this standalone block transaction as a template for future efforts to enhance risk-adjusted returns and shareholder value through targeted portfolio management.
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