Global Atlantic Announces $10 Billion Block Reinsurance Agreement with Manulife Across Both US and Japan Business
11 Dezember 2023 - 1:20PM
Business Wire
Global Atlantic Financial Group
(“Global Atlantic”), a leading
insurance company meeting the retirement and life insurance needs
of individuals and institutions, today announced it has signed a
$10 billion reinsurance agreement with Manulife Financial
Corporation (NYSE: MFC).
Key Highlights of the Transaction:
- Third block transaction Global Atlantic has executed with
Manulife, a leading international financial services provider and
wealth manager. Highlights successful partnership between
organizations.
- Showcases Global Atlantic’s unique ability to underwrite,
structure and execute on multiple liabilities and across the global
insurance market and includes Global Atlantic’s first block
reinsurance transaction in Japan.
- The transaction, signed between subsidiaries of the companies,
will reinsure a seasoned and diversified block of Manulife’s life,
annuity, and long-term care insurance business originated in the US
and Japan.
- Following a concurrent transaction where 100% of the long-term
care (“LTC") insurance risks are simultaneously reinsured with a
highly rated third-party global reinsurer, Global Atlantic will
only retain the underlying spread-based risks on the subset of the
block that involves the LTC business.
- Similar to Global Atlantic’s other spread-based reinsurance
transactions, the predictable nature of the retained risks makes
this an attractive profile for Global Atlantic and Ivy II, its
co-investment vehicle.
With this deal, Global Atlantic further advances its position as
a reinsurer of choice in the annuity and life insurance
marketplace. The company has established a 20-year track record,
successfully completing more than 40 transactions with nearly 30
clients and reinsuring more than $140 billion of assets since
inception.
“Throughout this process, we partnered closely with Manulife
teams in Canada, the US and Japan to gain a strong understanding of
their goals” said Manu Sareen, Co-President of Global Atlantic.
“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.”
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.
The transaction is expected to close in the first half of 2024,
subject to satisfaction or waiver of customary closing conditions
specified in the agreement, including the receipt of required
regulatory approvals.
About Global Atlantic
Global Atlantic Financial Group is a leading insurance company
meeting the retirement and life insurance needs of individuals and
institutions. With a strong financial foundation and risk and
investment management expertise, the company delivers tailored
solutions to create more secure financial futures. The company's
performance has been driven by its culture and core values focused
on integrity, teamwork, and the importance of building long-term
client relationships. Global Atlantic is a majority-owned
subsidiary of KKR, a leading global investment firm. Through its
relationship, the company leverages KKR's investment capabilities,
scale and access to capital markets to enhance the value it offers
clients. KKR's parent company is KKR & Co. Inc. (NYSE:
KKR).
Certain information contained in this press release constitutes
“forward-looking statements,” which can be identified by the use of
forward-looking terminology such as “may,” “will,” “should,”
“expect,” “anticipate,” “project,” “estimate,” “target,” “intend,”
“continue” or “believe,” other variations thereon or comparable
terminology. The forward-looking statements speak only as of the
date hereof and are based on Global Atlantic’s current beliefs,
assumptions and expectations. Due to various risks, uncertainties
and contingencies, including but not limited to obtaining required
regulatory approvals, closing on signed transactions and whether
the anticipated benefits of a transaction can be achieved within
expected timeframes, actual events or results or performance may
differ materially from what is reflected or contemplated in such
forward-looking statements. Global Atlantic undertakes no
obligation to update or revise any of these forward-looking
statements, whether to reflect new information, future events or
circumstances or otherwise. Past performance is not a guarantee of
future results.
Global Atlantic Financial Group (Global Atlantic) is the
marketing name for The Global Atlantic Financial Group LLC and its
subsidiaries.
Reinsurance transactions are entered into by Global Atlantic
Assurance Limited, Global Atlantic Re Limited, Commonwealth Annuity
and Life Insurance Company, First Allmerica Financial Life
Insurance Company or one of their affiliates. Reinsurance is
placed, where required by applicable law, by Global Atlantic Risk
Advisors, L.P., a licensed reinsurance intermediary and subsidiary
of The Global Atlantic Financial Group LLC.
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ICR Inc. GlobalAtlantic@icrinc.com (203)
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