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Manulife to ramp up share buyback program after cutting low-growth assets

Written by on May 9, 2024

TORONTO — Manulife Financial Corp. says it expects to ramp up its share buyback program this year as it sheds lower-growth assets and works to maintain its heightened return on equity.

The company said Thursday it expects to accelerate buybacks from the $200 million it did in the first quarter to around $600 million per quarter for the rest of the year.

The higher buybacks come after a quarter that saw the insurance giant close one major deal to offload holdings with limited growth potential and announce a second that closed in early April. 

The first was a $13-billion reinsurance deal that included what it says was the largest long-term care component the insurance industry had ever seen, while the second was the largest-ever universal life reinsurance deal in Canada. 

Reinsurance deals involve shifting the risk of existing insurance policies, and a chunk of their premiums, to another company to free up capital by reducing liabilities.

Manulife chief executive Roy Gori said on an earnings call that the company plans to return the $2 billion in capital released by the two deals through share buybacks. 

This report by The Canadian Press was first published May 9, 2024.

Companies in this story: (TSX:MFC)

The Canadian Press