Manulife concludes LTC reinsurance agreement with RGA By Investing.com

TORONTO – Manulife Financial Corporation (TSX: NYSE: ) has finalized a reinsurance transaction with Reinsurance Group of America (NYSE: NYSE: ), involving two segments of its long-term care (LTC) business. This deal, effective from January 1, 2025, marks the second phase of the company’s strategy to reinsure its LTC portfolio, which includes mature and younger business blocks. The move comes as Manulife, currently valued at $53.5 billion, demonstrates strong financial health with a perfect Piotroski Score of 9, according to InvestingPro data.

Manulife President and CEO Roy Gori commented on the transaction, saying it underscores the company’s commitment to enhancing shareholder value and strategically refocusing its portfolio toward areas with higher returns and risk reduced He also noted that the successful completion of this transaction serves as a testament to the solidity of Manulife’s LTC reserves and assumptions.

Manulife, a prominent international financial services provider with global headquarters in Toronto, offers a range of financial advisory, insurance and wealth and wealth management services. Operating under the Manulife brand in Canada, Asia and Europe, and as John Hancock in the United States, the corporation serves more than 35 million customers worldwide. By the end of 2023, Manulife employs more than 38,000 people and works with more than 98,000 agents in various distribution partners. The company’s strong market position is reflected in its impressive stock return of 47% over the past year and consistent dividend growth, having increased dividends for 11 consecutive years. InvestingPro Analysis suggests the stock is currently trading below its Fair Value, with 8 additional exclusive insights available to subscribers.

Financial details of the reinsurance transaction were not disclosed in the press release. This news comes after the initial announcement on November 20, 2024, where more information about the deal was made available through a press release, presentation slides and a webcast.

The completion of this reinsurance agreement with RGA is part of Manulife’s broader business strategy, which aims to optimize its insurance portfolio and strengthen its financial position. Trading at a P/E ratio of 15.6 with a healthy dividend yield of 3.7%, Manulife maintains strong fundamentals. This information is based on a press release from Manulife Financial Corporation and InvestingPro data, where subscribers can access the full Pro research report for deeper insight into the company’s valuation and growth prospects.

In other recent news, Manulife Financial Corporation reported substantial growth in its third quarter financial results for 2024, primarily driven by robust performance in Asia and solid contributions from its Global Wealth and Asset Management segment. The company saw a significant increase in annual premium equivalent sales, core earnings, and new business value. Despite some adverse impacts from actuarial model revisions and global market conditions, Manulife Financial maintained strong core performance on equity and a healthy balance sheet.

The company’s APE sales increased by 40%, with growth of 64% in Asia, and core earnings increased by 4%. New business value grew by 39%, and the company generated more than $12 billion in net inflows, including $5 billion from Global WAM in Q3. The company also launched digital initiatives, called GenAI, to enhance the customer experience and returned nearly $5 billion to shareholders in the past year.

However, the company faced challenges, including a 20% decline in APE sales in Canada and an 8% decline in core earnings in the US segment. Despite these challenges, the company expects a continued improvement in private equity performance and aims to achieve a core ROE of 16.3%, in line with medium-term targets. These are recent developments, and it will be interesting to observe how these factors influence the company’s performance in the coming quarters.

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