RGA and John Hancock Partner on $4.1 Billion Reinsurance Deal

In a significant move, Reinsurance Group of America Inc. (RGA) and John Hancock, a subsidiary of Manulife Financial Corporation, announced an agreement to reinsure approximately $4.1 billion in liabilities, enhancing their positions in the insurance market.

Date: 21-11-2024

AI Rating: 7

This report details a collaboration where Reinsurance Group of America Inc. (RGA) and John Hancock will reinsure about US$4.1 billion in liabilities. This large transaction consists of $1.9 billion in long-term care (LTC) and $2.2 billion in structured settlements.

From an investor's perspective, the implications of this transaction are significant. The LTC block matches RGA's in-force portfolio, which may lead to stabilization and predictability in earnings, reducing unexpected liabilities. The structured settlements highlight RGA's expertise in longevity risks, potentially enhancing its market reputation.

The full-risk basis transaction indicates both companies are committed, with RGA retaining 25% of risk while coinsuring 75%. This type of agreement could bolster RGA's future revenue growth while allowing John Hancock to capitalize on RGA's experience. However, as the deal is projected to close in early 2025, investors should closely monitor how this impacts their financials in the forthcoming quarters.

Moreover, this partnership demonstrates RGA's ability to support growth in US permanent life business, which could provide sustainable revenue streams in the future. Overall, this transaction appears moderately positive as it strengthens RGA's portfolio and market position without exposing it to substantial additional risk.

Stocks: RGA MFC