Global Atlantic announces reinsurance agreement with Manulife

Global Atlantic Financial Group announced it has signed a $10 billion reinsurance agreement with Manulife.

The transaction will reinsure a seasoned and diversified block of Manulife’s life, annuity, and long-term care insurance business originated in the US and Japan.

The block currently has approximately $10 billion in general account assets across multiple product lines including payout annuities, whole life policies and long-term care policies. The Japan whole life block represents approximately $4 billion USD equivalent (¥574 billion) assets making the transaction one of the largest Japanese reinsurance deals in recent history and further advancing Global Atlantic’s presence and commitment across Asia. Global Atlantic will retrocede the long-term care insurance risk to a well-established and highly rated third-party reinsurer.

Under the terms of the agreement, Manulife will reinsure the blocks and transfer general account assets to Global Atlantic. Manulife will also retain servicing and administration of the policies.

“Throughout this process, we partnered closely with Manulife teams in Canada, the US and Japan to gain a strong understanding of their goals. Due to our organizations’ close collaborative process, we were able to develop a tailored solution that aligns with all parties’ strategic objectives. Our innovative LTC structure separates the insurance risks from the underlying investment and spread-based risk, and enables Global Atlantic to reinsure the insurance risks to a highly regarded reinsurance partner. With this structure, our retained liability cashflows on this part of the transaction are not subject to any lapse, longevity or morbidity risks.” – Manu Sareen, co-president of Global Atlantic.