Manulife signs $3.2bn LTC reinsurance deal with Munich Re

August 06, 2026 | 09:44

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Manulife announced a $3.2 billion long-term care reinsurance transaction with Munich Re, its third such deal and first on a standalone LTC block, cumulatively reducing LTC risk by 24 per cent upon closing.

TORONTO, Aug. 6, 2026 /PRNewswire/ -- Manulife Financial Corporation ("Manulife" or the "Company") announced today that it has agreed to reinsure biometric risk¹ on a block of long-term care ("LTC") policies with $3.2 billion of reserves² to Munich American Reassurance Company ("Munich Re Life US"), a subsidiary of Munich Re Group, highlighting the Company's continued efforts to reduce the risk profile of its inforce portfolio. The transaction is expected to close in Q4 2026 pending regulatory approvals.

Key highlights of the transaction include:

Full risk transfer on biometric risk³ on $3.2 billion of LTC reserves to Munich Re Life US
Inclusive of our previous LTC reinsurance transactions⁴, upon closing Manulife will have cumulatively reduced LTC morbidity sensitivity by 24%⁵
Similar pricing to prior deals, with a modest negative 5% cede⁶, further validating reserves and assumptions
Transaction largely neutral to capital, with immaterial annual impact to both core earnings and net income attributed to shareholders of ~$30 million in the first year and reducing over time⁷

"Today's announcement represents our third LTC reinsurance transaction in under three years and first on a standalone LTC block, reflecting our ability to reduce our risk profile and strengthen our business through innovative actions. Looking ahead, we continue to see meaningful opportunities to improve our long-term care portfolio through organic initiatives that will enhance risk-adjusted returns and generate significant shareholder value." - Phil Witherington, President & Chief Executive Officer, Manulife

Slides related to this announcement are included as part of the 2Q26 earnings presentation available here: 2Q26 results presentation

Note: All figures and estimates are based on June 30, 2026, position, unless otherwise noted, and are expressed in Canadian dollar, based on exchange rate of US$1:00 to C$1.41875. Foregone core earnings and net income attributed to shareholders impacts based on exchange rate of US$1:00 to C$1.38398.
¹	IFRS reserve figure of C$3.2B at 80% quota share.
²	IFRS reserve figure of C$3.2B at 80% quota share, reflecting IFRS 17 current estimate of present value of future cash flows + risk adjustment + contractual service margin.
³	IFRS reserve figure of C$3.2B at 80% quota share.
⁴	Refers to the $13 billion reinsurance transaction, including $6 billion of LTC, with Global Atlantic that was announced in December 2023 and closed in February 2024 and the $5.4 billion reinsurance transaction with RGA, including $2.4 billion of LTC that was announced in November 2024 and closed in January 2025.
⁵	Impact of a change in reserves would be reported through the contractual service margin, net income attributed to shareholders, and other comprehensive income attributed to shareholders. In reference to the cumulative reduction in LTC morbidity sensitivity across all three transactions at the time of the respective announcement. Note sensitivity for this transaction based on 2Q26. Transaction is expected to close in 4Q26 pending regulatory approvals.
⁶	On IFRS basis.
⁷	Core earnings is a non-GAAP financial measure.