Manulife announced Feb. 1 that its subsidiary, John Hancock Life Insurance Company, has closed a previously announced transaction to reinsure a substantial portion of its legacy U.S. Variable Annuity block.
This block, made up primarily of policies with Guaranteed Minimum Withdrawal Benefits riders, will be reinsured with Corporate Solutions Life Reinsurance Company, a subsidiary of Venerable Holdings, Inc. John Hancock will continue to administer the policies.
"The successful completion of this U.S. Variable Annuity reinsurance transaction marks an important milestone in our ongoing commitment to optimizing our legacy portfolio," stated Roy Gori, Manulife President & Chief Executive Officer. "This transaction unlocks value for our shareholders and meaningfully reduces our go-forward risk profile, while contributing to our goal of shifting the earnings mix of our franchise to focus on our highest potential businesses. We are pleased to have achieved such a strong outcome," added Gori.
When the deal was first announced November 15, Gori said in a statement that “the agreement to reinsure a substantial portion of our U.S. VA block reduces risk, releases approximately $2.0 billion of capital and unlocks shareholder value.”
In November, Manulife also stated that the deal would reduce its exposure to U.S. VA Guaranteed Value and net amount at risk by more than 75 per cent, and its equity market sensitivity from VA guarantees by roughly 54 per cent.
