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Munich Re to take over $3.2bn of Manulife long-term care risk
The deal is expected to close in Q4 2026, and Manulife says it would cut its cumulative sensitivity to long-term care morbidity by 24% once completed.
Munich Re has agreed to assume the biometric risk on a $3.2 billion block of long-term care policies issued by Manulife Financial Corporation, using its US life reinsurance subsidiary, Munich American Reassurance Company (Munich Re Life US), Reinsurance News reported.
Manulife said the transaction is expected to close in Q4 2026, subject to regulatory approvals, and that it builds on prior long-term care reinsurance activity. The company added that, including previous deals, the agreement would reduce its cumulative sensitivity to long-term care morbidity by 24% after it closes.
The transaction is priced similarly to prior agreements and includes a modest negative 5% cede, which Manulife said supports its reserves and assumptions. Manulife also expects the deal to be largely capital-neutral, with an immaterial impact on core earnings and net income attributable to shareholders of about $30 million in the first year, declining over time.
Manulife Chief Executive Officer Phil Witherington described the announcement as its third long-term care reinsurance transaction in under three years and the first on a standalone long-term care block, framing it as a way to reduce its risk profile and strengthen the business.