Venerable to Reinsure $22B in John Hancock Variable Annuities

Venerable Holdings has agreed to reinsure more than 163,000 variable annuities that John Hancock sold in the United States from 2003 through 2012.

The annuities are backed by $22 billion in assets.

John Hancock is a Boston-based arm of Manulife Financial. The deal with Venerable involves 76% of Manulife’s exposure to U.S. variable annuity risk.

John Hancock would continue to administer the contracts, Manulife said.

The companies hope to close on the deal by March 31, 2022.

Naveed Irshad, the global head of in-force management at Manulife, said in a comment, included in the deal announcement, that Manulife is making the deal partly because it will reduce the company’s sensitivity to ups and downs in the stock market. A company analysis shows the deal will cut the losses resulting from a 30% drop in stock market returns on variable annuity guarantees by 54%.

Roy Gori, Manulife’s CEO, said the deal will also release about $2 billion in capital.

Venerable

Venerable is a privately held annuity block management company based in West Chester, Pennsylvania. It was created by a group led by affiliates of Apollo Global Management, Athene Holding and other companies.

The company will be using its Corporate Solutions Life Insurance Company subsidiary to reinsure the John Hancock annuities.

Venerable joined with Athene to reinsure $19 billion in annuities for Voya Financial in 2018.