Canadian multinational insurer Manulife has announced that its subsidiaries have entered into agreements to reinsure approximately $8 billion of policy liabilities related to legacy U.S group payout annuities to Jackson National Life Insurance Company.
This transaction, along with two separate deals announced today, are expected to release a total of over $1 billion in capital over the next 12 months, inclusive of the up-front impacts to net income available to shareholders.
$35 million of capital was released in the third quarter of 2018, $585 million of capital is expected to be released in the fourth quarter of 2018, and a further $470 million is expected to be released over the next 12 months as Manulife further refine its U.S asset portfolio post-transaction.
In aggregate, the company expects to recognise an up-front after-tax gain of approximately $175 million related to these transactions.
“We expect that more than $1 billion in capital will be released as a result of these transactions, marking an important milestone in optimizing our portfolio and representing significant progress towards our $5 billion target by 2022,” said Manulife President & Chief Executive Officer Roy Gori.
The Canadian universal life and U.S individual pay-out annuity reinsurance transactions closed in the third quarter of 2018.