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Manulife completes landmark reinsurance deal with Global Atlantic

Published 2024-02-22, 08:56 a/m
© Reuters.

TORONTO - Manulife (TSX:MFC) Financial (NYSE:MFC) Corporation, a prominent international financial services provider, has finalized its largest long-term care (LTC) reinsurance transaction to date with Global Atlantic. The deal, which involves the reinsurance of four blocks of legacy business with lower returns on equity, was completed as of January 1, 2024.

The transaction is hailed as a significant industry achievement, with Manulife's President and CEO Roy Gori stating, "An industry milestone, the transaction is the largest LTC reinsurance transaction ever, and our ability to transact with a leading reinsurance counterparty and its LTC reinsurance partner further validates the prudence of our LTC reserves and assumptions."

Following the completion of this transaction, Manulife has received approval from the Toronto Stock Exchange (TSX) and the Office of the Superintendent of Financial Institutions (OSFI) to initiate share buybacks starting February 23, 2024. This move is intended to redistribute the capital released from the transaction back to its shareholders.

Manulife, known as MFC on the Toronto, New York, and the Philippine stock exchanges, and as 945 in Hong Kong, operates across Canada, Asia, and Europe, and primarily as John Hancock in the United States. The company provides financial advice, insurance, and wealth and asset management services to over 35 million customers worldwide.

The information provided in this article is based on a press release statement from Manulife Financial Corporation .

InvestingPro Insights

As Manulife Financial Corporation (MFC) embarks on its latest strategic initiative with the largest long-term care reinsurance transaction in the industry, investors may find the following insights from InvestingPro particularly illuminating. Manulife's commitment to capital optimization and shareholder value is reflected in several key metrics and analyst insights.

InvestingPro data highlights Manulife's robust financial position, with a market capitalization of $43.42 billion USD and a strong Price/Earnings (P/E) ratio of 12.1, adjusted for the last twelve months as of Q4 2023. This suggests a favorable valuation compared to earnings, which could be attractive to value-focused investors. Moreover, the company has experienced a notable revenue growth of 61.11% over the last twelve months, indicating a significant increase in business activity and potential for further expansion.

Two InvestingPro Tips that are particularly relevant to Manulife's recent transaction and future outlook include:

  • The company has raised its dividend for 10 consecutive years, and has maintained dividend payments for 25 consecutive years, underscoring its commitment to returning value to shareholders. This is especially pertinent given the recent share buyback approval, which could further enhance shareholder returns.
  • Manulife is trading near its 52-week high, with a price that is 96.38% of the peak, reflecting strong investor confidence and market performance. Additionally, the company has seen a robust 3-month price total return of 25.93%, indicating positive momentum in its stock price.

For investors seeking deeper insights, there are additional InvestingPro Tips available that can provide a more comprehensive analysis of Manulife's financial health and market performance. To explore these insights, visit InvestingPro's full list of tips for Manulife. And for those interested in a yearly or biyearly Pro and Pro+ subscription, remember to use the coupon code PRONEWS24 to get an additional 10% off.

The strategic moves by Manulife, including the recent LTC reinsurance transaction and the share buyback program, are aimed at reinforcing its position as a leading player in the insurance industry. These efforts, coupled with the company's solid financial metrics and positive analyst sentiment, suggest a promising outlook for Manulife's shareholders.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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