By Robb M. Stewart


Reinsurance Group of America has struck a deal with Manulife Financial to reinsure roughly $4.4 billion of reserves, the third large block reinsurance transaction between the companies in what they say is the largest universal life reinsurance transaction in the Canadian market to date.

RGA's Canadian arm said it completed a coinsurance transaction with Manulife's Manufacturers Life Insurance unit to reinsure about 5.8 billion Canadian dollars of reserves, with an accompanied equivalent asset transfer.

The effective date of the transaction is April 1 and Manulife will continue to administer all policies as part of the arrangement.

The move comes after RGA last week said it reached an agreement with Japan Post Insurance for an affiliate of RGA to reinsure an about 700 billion yen ($4.62 billion) in-force block of individual life annuities through coinsurance.

Toronto-based Manulife said its deal with RGA Canada will see it reinsure reserves at a 16.2 times earnings multiple and about 1 times book value multiple. Manulife said that with the deal it expects to dispose of C$600 million of alternative long-duration assets.

The coinsurance transaction is expected to cut annual net income by about C$40 million, but result in a capital release of C$800 million, Manulife said.

It added it has approval from Canada's Office of the Superintendent of Financial Institutions to amend its existing normal course issuer bid, allowing it to buy back for cancellation up to 90 million shares, 40 million more than previously planned. Under the buyback program, which is set to expire Feb. 22, 2025, it has already bought almost 5 million shares.


Write to Robb M. Stewart at robb.stewart@wsj.com


(END) Dow Jones Newswires

03-25-24 0951ET