Glonghui December 11 | Manulife Finance-S (00945.HK) announced that the company announced today that it has agreed to reinsure four of its old businesses/businesses with low returns on shareholder capital to Global Atlantic, including $6 billion in reserves involving long-term care insurance (“LTC”) business. The highlights of the deal are as follows:
The reserves of 13 billion Canadian dollars, including 6 billion Canadian dollars or the total LTC reserve amount equivalent to 14%, are reinsured to GlobalAtlantic and its business partners; this is the largest LTC business reinsurance transaction in history; the other party to this transaction is a market-leading reinsurance company and its LTC reinsurance partner, which further confirms the prudent level of Manulife's LTC business reserves and related assumptions; releasing 1.2 billion Canadian dollars of capital, the company plans to return all relevant capital to shareholders through stock repurchases, thus making every core shareholder profit, The core return on shareholder capital 2 achieved cumulative growth; the transaction brought about an attractive 9.5 times profit multiplier and 1.0 times book value multiplier; reduced the risk of old business, including a 12% reduction in the sensitivity of LTC incidence; and is expected to dispose of alternative long-term assets equivalent to 1.7 billion Canadian dollars; the transaction marks a comprehensive risk transfer and provides significant structural protection, and the other party to the transaction is an experienced reinsurance company and its partners; this is an important milestone in the company's restructuring of the business portfolio. The core profit 2 contribution from LTC business and variable annuities will be made in 2017 The year's 24% 7 declined further to 11%.