Manulife Financial Corporation · TSX:MFC
Manulife Financial — Merger or Acquisition (November 2024)
17 slides from Manulife Financial's merger presentation, Nov 21, 2024
Slide 1: Manulife announces $5.4 billion reinsurance transaction with RGA
Manulife announces $5.4 billion reinsurance transaction with RGA, including $2.4 billion of long-term care November 21, 2024
Slide 2: Caution regarding forward-looking statements
markets, interest rates, credit and swap spreads, inflation rates, conflicts, acquisitions or divestitures, and our ability to complete Caution regarding currency rates, investment losses and defaults, market liquidity and transactions; environmental concerns, including climate change; our creditwor
Slide 3: Conference call participants
Conference call participants Roy Gori, Trevor Kreel President & Chief Executive Officer. Chief Investment Officer Marc Costantini Colin Simpson Global Head of Strategy and Inforce Management Chief Financial Officer Steve Finch Halina von dem Hagen Chief Actuary Chief Risk Officer 3
Slide 4: Transacting on a younger LTC block to further transform our portfolio
Transacting on a younger LTC block to further transform our portfolio and unlock significant value for shareholders 1. Second LTC reinsurance transaction represents another milestone to further transform our portfolio to higher return and lower risk • Entered into an agreement with RGA, a highly-rat
Slide 5: Unlocking significant value for shareholders
Unlocking significant value for shareholders Accretive to ROE; neutral to EPS Attractive deal multiples (pro forma, post-share buybacks) $0.8B 11.4x ~1.0x +0.14pps +0.19pps Capital Core earnings Book value Core ROE ROE release multiple multiple accretion2 accretion2 $70M $50M neutral Foregone Forego
Slide 6: Transacting with RGA on a younger LTC block
Transacting with RGA on a younger LTC block Transaction offers validation of LTC reserves and Overview of LTC block characteristics reinforces existing robust reserving practices • Transacted LTC block has similar policyholder benefits • Second LTC reinsurance transaction; compared with the compared
Slide 7: Further reducing risks from LTC
Further reducing risks from LTC Reduces LTC IFRS reserves1 Reduces LTC morbidity sensitivities1 ($ billions) ($ billions, post-tax, potential impact on reserves3 for a 5% adverse change in LTC morbidity assumptions) • LTC U.S. statutory reserves will decrease by $2.3 billion to $34.3 billion2 • Larg
Slide 8: Notable transactions
Continued momentum in reducing legacy and low ROE business and freeing up capital to return to shareholders $12B Notable transactions Reinsurance of Reinsurance of U.S. Reinsurance of LTC and Canadian payout variable annuities to SS to RGA and annuities risks to Venerable Canadian UL to RGA PartnerR
Slide 9: 5-year value sequencing
Advances in digital experiences, analytics capabilities and healthy aging solutions, offer new LTC organic opportunities; reducing the range of outcomes by driving future claims savings, estimated at 5%+ • Expect to achieve nearly 3% of claims savings in 2024, doubling 2023 savings • Utilizing advan
Slide 10: Additional LTC optimization levers
Additional LTC optimization levers Premium increases Alternative protection solutions Contractually Strong history of approvals Proven track Landing spot option entitled to premium increases; will seek additional price US $12B record of providing alternative protection Began offering in 2010; Cumula
Slide 11: Key messages
Key messages 1. Our second historic LTC reinsurance transaction in less than 12 months, representing another milestone in transforming our portfolio 2. Reinsuring $5.4 billion of reserves, including $2.4 billion of reserves on a younger LTC block 3. Transacting with an experienced counterparty furth
Slide 12: Appendix
• Transaction summary Appendix 12
Slide 13: Transaction summary
Transaction summary • We have entered into an agreement to reinsure portions of our U.S. LTC and U.S. structured settlements blocks to an affiliate of Reinsurance Group of America (“RGA”) Deal structure • Full risk transfer backed by trust asset collateral protection; 75% quota share on both ceded b
Slide 14: Non-GAAP and other financial measures
Non-GAAP and other financial measures Manulife prepares its Consolidated Financial Statements in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. We use a number of non-GAAP and other financial measures to evaluate overal
Slide 15: Footnotes
Footnotes Slide Footnote 1 IFRS 17 current estimate of present value of future cash flows + risk adjustment + contractual service margin. 2 Refers to the $13 billion reinsurance transaction, including $6 billion of LTC, with Global Atlantic that was announced in December 2023 and closed in February
Slide 16: Investor Relations contact information
Hung Ko Jun Bu Global Head, Investor Relations AVP, Investor Relations Investor Relations hung_ko@manulife.com jun_bu@manulife.com contact information 416 806 9921 437 423 8267 200 Bloor Street East 200 Bloor Street East Toronto, ON M4W 1E5 Toronto, ON M4W 1E5 Yan Decelles Craig Knight AVP, Investor
Slide 17: Manulife
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