New York Life also agreed to assume 60 percent of certain John Hancock life insurance policies on a reinsurance basis. The transaction is expected to close within the first half of 2015, subject to customary closing conditions and regulatory approvals.
“Manulife is a major player in the pensions business in Canada, the United States, Hong Kong and Indonesia,” said Donald Guloien, President and Chief Executive Officer of Manulife. “This transaction, similar to our recently announced acquisition of Standard Life’s Canadian operations, will significantly increase our retirement plans business overall.”
“When completed, these transactions will each accelerate our strategy to grow our wealth and asset management businesses around the world,” added Guloien.
The acquisition will bring 55,000 retirement plans and $135 billion in assets under John Hancock’s administration by approximately 60 percent, accelerate its expansion into the mid-case to large-case private sector retirement plan markets, and add both scale and expertise to John Hancock in a strategically significant line of business.
John Hancock also expects to offer positions to all 450 New York Life employees in Westwood who handle the retirement segment as part of the purchase, said Craig Bromley, John Hancock’s president.
“It accelerates our business plan dramatically,” said Bromley. “John Hancock will continue to handle the administration of these plans, and consumers will not see any changes in their contract terms or benefits.”
Dedicated to the Insurance Business
Bromley said that the company will remain dedicated to the life insurance business, although it has been less profitable in recent years due to the financial crisis and recession which pressured incomes and led most households to avoid buying life insurance to save money.
Manulife of Toronto is expanding into the more profitable wealth and investment management business in Canada. The announcement is an effort to re-apply that strategy in the United States.
Image: John Hancock offices in Boston – Scott Eisen/Bloomberg
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