Financing the years when care is needed

# Financing the years when care is needed OCTOBER 11, 2026 Manulife has handed a large slice of its long-term care risk to Munich Re, and it did so without giving up a single asset. Long-term care insurance turns uncertain future needs into commitments made today. A reinsurance transaction shows how institutions redistribute those commitments as their understanding of risk evolves. According to Reinsurance News, the deal between Munich Re's US life reinsurance arm, Munich American Reassurance Company (Munich Re Life US), and Manulife Financial Corporation is now in force. Munich Re Life US assumes the biometric risk on a USD 3.2 billion block of Manulife's long-term care policies. Biometric risk covers how long people live and how much care they need. The risk transfer does not include any asset transfers, the report says. The deal is the third long-term care reinsurance transaction for Manulife. It is the first on a standalone long-term care block, according to the company. Manulife said the deal fits its ongoing effort to reduce the risk profile of its in-force portfolio. Counting its earlier deals, the company says its cumulative sensitivity to long-term care morbidity is now 24% lower. The financial effects are small by design. Manulife described the agreement as largely capital-neutral. It expects an immaterial impact on core earnings. The impact on net income attributable to shareholders is about USD 30 million in the first year, declining over time. Pricing is a point worth noting. The transaction was priced similarly to Manulife's prior deals. It includes a modest negative 5% cede. Manulife said this further validates its reserves and assumptions. That is the company's own reading. The source does not give an independent assessment of those reserves. For the wider market, the deal shows that reinsurers are willing to take on long-term care risk at a repeatable price. The report also points to a second example. Fortitude Re recently signed a USD 3.8 billion long-term care reinsurance transaction between its subsidiary, Fortitude Reinsurance Company Ltd., and Unum Life Insurance Company of America, a subsidiary of Unum Group. Two large deals in a short span suggest that insurers are looking for ways to move this risk off their books, and that more than one reinsurer is ready to take it. The source does not say whether this marks a lasting trend. Interpretation, kept separate from the reported facts: long-term care policies are hard to price because claims can run for many years. Insurers that sell reinsurance on this business compete on their view of that long-term risk. Manulife's repeated use of similar pricing suggests a standard approach is taking shape, but the source does not confirm this. WHAT TO WATCH NEXT Whether other long-term care insurers announce similar transactions, and whether Manulife signs further deals to extend its 24% reduction in morbidity sensitivity. These transactions are one part of preparing for longer lives. Their larger purpose remains the ability to meet obligations when people need care. Source: Reinsurance News ---