Manulife Finalizes $3.2B Long-Term Care Reinsurance Deal With Munich Re
Manulife has closed a reinsurance transaction transferring biometric risk on long-term care policies to Munich Re, covering $3.2 billion in reserves.
Manulife Financial Corporation has completed a previously announced reinsurance agreement with Munich American, a subsidiary of Munich Re, transferring biometric risk tied to a block of long-term care insurance policies carrying $3.2 billion in reserves, the Toronto-based insurer disclosed Thursday.
The transaction represents a continued effort by major life insurers to reduce exposure to long-term care liabilities, a line of business that has historically generated significant financial strain across the industry due to rising care costs and policyholders living longer than actuarial models once projected.
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By ceding biometric risk — the uncertainty tied to how long policyholders will require care and at what intensity — Manulife shifts a meaningful portion of that liability uncertainty to Munich Re, one of the world's largest reinsurers and an active participant in the long-term care reinsurance market.
The deal underscores a broader industry trend of North American insurers restructuring legacy long-term care books through reinsurance, block sales, or reserve strengthening, as regulators and investors have intensified scrutiny of long-term care obligations sitting on carrier balance sheets.
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