New York Life announced today that it has agreed to acquire 1.3 million whole life insurance policies worth more than $25 billion from John Hancock Financial.
The deal represents 60 percent of a closed block of participating whole life insurance policies from John Hancock and includes more than $11 billion in liabilities. Through a reinsurance arrangement, New York Life will assume $7 billion of those liabilities and John Hancock will continue to administer the policies, paying claims and dividends, according to the announcement.
The agreement is part of New York Life’s strategy to grow its core book of individual life insurance business.
Under a separate agreement also announced today, New York Life Investment Management will sell its Retirement Plan Services (RPS), to John Hancock, which will merge RPS with John Hancock Retirement Plan Services. The combined business will cover 55,000 retirement plans.
“Together these transactions reflect another step in our business strategy to maximize value for our policyholders,” said Ted Mathas, chairman and CEO of New York Life. “Upon closing, New York Life will be focused on a select group of complementary businesses: life insurance and annuities, which are core to our mission and areas where we are a clear market leader; and third-party retail and institutional asset management, which provides earnings diversification and supports our dividend to policyholders.”