Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
The John Hancock Building in Boston. Credit: John Hancock

Life Health > Long-Term Care Planning

Global Atlantic Closes on $10B Manulife Reinsurance Deal

Your article was successfully shared with the contacts you provided.

Global Atlantic said Thursday that it has closed on a previously announced reinsurance deal with Manulife Financial.

The deal includes blocks of U.S. life insurance, U.S. annuities and Japanese whole life insurance policies backed by $5.6 billion in assets, in U.S. dollars.

The deals also include U.S. long-term care insurance policies backed by $4.4 billion in assets.

The LTCI policies were issued by Manulife’s John Hancock subsidiary.

Reinsurers and LTCI issuers have had trouble agreeing on prices for LTCI reinsurance, and the arrangement is the biggest LTCI reinsurance deal ever announced, according to Global Atlantic.

Global Atlantic, a subsidiary of KKR, has assumed responsibility for the investment risk related to the LTCI block and passed the LTCI claim risk on to another insurer through a “retrocession” arrangement, or a reinsurance arrangement for a reinsurance arrangement. Global Atlantic has not identified the retrocession provider.

For the direct writer of a product, having access to reinsurance is like having access to a safety net. The LTCI component of the Global Atlantic-Manulife reinsurance deal might make some insurers more comfortable with the idea of selling LTCI policies.

The U.S. LTCI market boomed in the 1990s. The market began to freeze over in the early 2000s, after new state LTCI rate stability rules took effect and the issuers discovered that they had based prices on overly optimistic assumptions.

The John Hancock Building in Boston. Credit: John Hancock


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.