Deal Brings $12 Billion in Policy Assets Under Management;
Supporting Hancock Policies With $25 Billion in Face Amount
NEW YORK, July 6, 2015 – New York Life has completed the acquisition, through reinsurance, of a net 60 percent interest in John Hancock Financial’s closed block, comprised primarily of participating whole life insurance policies.
The transaction, which was initially announced in December 2014, has received all necessary regulatory approvals.
The closed block of 1.3 million in-force policies with a face amount of more than $25 billion was established in connection with John Hancock’s demutualization in 2000. Through reinsurance arrangements, New York Life has assumed $7 billion of statutory reserves.
New York Life’s NYL Investors, LLC unit, which oversees the company’s general account investments, manages approximately $12 billion in new assets as a result of the deal. With these additional assets, New York Life’s general account assets now exceed $213 billion*, a record high for the company. John Hancock, the U.S. division of Manulife Financial Corporation, will continue to administer the closed block policies, including paying claims and dividends. Terms of the transaction were not disclosed.
An infusion of high-quality assets
New York Life Chairman and CEO Ted Mathas said, “The conclusion of this transaction brings New York Life a significant infusion of high-quality, whole life insurance assets, which serves as a strategic complement to our large and stable block of participating whole life insurance policies protecting millions of American families. Our acquisition of these whole life policy assets underscores our strategic focus on, and commitment to, growing our life insurance business, the fundamental business of New York Life for the past 170 years.”
Mr. Mathas noted that the company is interested in acquiring other blocks of high quality life insurance in the future. Mr. Mathas continued, “Our company’s ratings for financial strength are substantially driven by our ability to maintain a thriving block of participating whole life insurance business. Together with our surplus and asset valuation reserve, a cushion of safety that now stands at more than $22 billion, New York Life’s financial strength is unsurpassed in the industry, as validated by the four major rating agencies. In fact, of the 800 life insurers operating in the United States today, New York Life is one of only two with the highest possible ratings for financial strength currently awarded by all four rating agencies.”
*Reflects cash and invested assets on a consolidated basis.
New York Life Crosses $200 Billion in General Account Assets for the First Time in its History
Earlier this year New York Life’s general account, managed for the benefit of policyowners, exceeded $200 billion in assets for the first time in its 170 year history.
New York Life’s expertise in managing general account assets is highly regarded throughout the industry, expertise which helped the company weather the financial crisis of 2008-09 with minimal impact. Through organic growth and as a result of this deal, New York Life has grown its general account assets by approximately $16 billion in 2015, for a record total today of more than $213 billion in cash and invested assets.
New York Life Insurance Company, a Fortune 100 company founded in 1845, is the largest mutual life insurance company in the United States* and one of the largest life insurers in the world. New York Life has the highest possible financial strength ratings currently awarded to any life insurer from all four of the major credit rating agencies: A.M. Best (A++), Fitch (AAA), Moody’s Investors Service (Aaa), Standard & Poor’s (AA+).** Headquartered in New York City, New York Life’s family of companies offers life insurance, retirement income, investments and long-term care insurance. New York Life Investments*** provides institutional asset management. Other New York Life affiliates provide an array of securities products and services, as well as retail mutual funds. Please visit New York Life’s website at www.newyorklife.com for more information.
*Based on revenue as reported by “Fortune 500 ranked within Industries, Insurance: Life, Health (Mutual),” **Individual independent rating agency commentary as of 7/1/15.
***New York Life Investments is a service mark used by New York Life Investment Management Holdings LLC and its subsidiary, New York Life Investment Management LLC.