OLDWICK, N.J.–(BUSINESS WIRE)–#insurance—AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of �aa- (Superior) of the life/health (L/H) insurance subsidiaries of Manulife Financial Corporation (MFC) (Toronto, Canada) [NYSE: MFC]. Concurrently, AM Best has affirmed the Long-Term ICR of a- (Excellent) and the Long-Term Issue Credit Ratings (Long-Term IR) of MFC. The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of the companies and ratings.)
The ratings of MFCs L/H subsidiaries reflect their balance sheet strength, which AM Best assesses as very strong, as well as their strong operating performance, favorable business profile and very strong enterprise risk management.
MFC continues to maintain a very strong balance sheet despite an ongoing global pandemic that has caused economic strain and increased insurance and investment-related pressures. MFCs balance sheet strength assessment is indicative of its strong capital position as measured by the Life Insurance Capital Adequacy Test (LICAT) and Bests Capital Adequacy Ratio (BCAR); MFCs LICAT score remains above that of its peers and its BCAR remains within the strong category. Throughout 2021, MFC maintained its focus on de-risking its balance sheet by offloading business lines with significant capital strain while simultaneously growing more capital-efficient lines of business. From an operating performance perspective, MFC reported a significant year-over-year increase in core earnings with $6.5 billion for year-end 2021. MFCs core return on equity in 2021 was 13%. Earnings are reflective of MFCs diverse business model, which includes a robust product offering, geographic diversification throughout Asia, Canada and the United States, and strong market presence with MFC being a top-ranked insurer and holding leading market positions. The companys ERM program, which has been assessed as very strong, supports MFCs risks within its balance sheet, operating performance and business profile.
Partially offsetting the aforementioned factors is AM Bests view of MFCs legacy blocks of business. AM Best remains somewhat concerned with MFCs exposure to its legacy businesses including long-term care and universal life with secondary guarantees but, AM Best notes MFCs actions to de-risk and its conservative reserving practices. In addition, the alternative long duration asset portfolio performed well in 2021 enhancing investment yield and providing diversity but it remains elevated compared with industry averages and may contribute to earnings volatility.
The FSR of A+ (Superior) and the Long-Term ICRs of aa- (Superior) have been affirmed with stable outlooks for the following L/H subsidiaries of Manulife Financial Corporation:
The following Long-Term IRs have been affirmed with stable outlooks:
Manulife Financial Corporation-
a- (Excellent) on USD 1.0 billion 4.15% senior unsecured fixed rate, due 2026
a- (Excellent) on USD 500 million 2.484% senior unsecured fixed rate, due 2027
a- (Excellent) on USD 750 million 3.703% senior unsecured notes, due 2032
a- (Excellent) on USD 750 million 5.375% senior unsecured fixed rate, due 2046
a- (Excellent) on USD 1.155 billion 3.05% senior unsecured fixed rate, due 2060
bbb+ (Good) on CAD 600 million 3.317% subordinated debentures, due 2028
bbb+ (Good) on CAD 750 million 3.049% subordinated debentures, due 2029
bbb+ (Good) on SGD 500 million 3.0% subordinated debentures, due 2029
bbb+ (Good) on CAD 1 billion 2.237% subordinated debentures, due 2030
bbb+ (Good) on USD 750 million 4.061% subordinated debentures, due 2032
bbb+ (Good) on CAD 1 billion 2.818% subordinated debentures, due 2035
bbb+ (Good) on CAD 2 billion 3.375% limited recourse capital notes, due 2081
bbb+ (Good) on CAD 1.2 billion 4.1% limited recourse capital notes, due 2082
bbb+ (Good) on CAD 1 billion 7.117% limited recourse capital notes, due 2082
bbb (Good) on CAD 350 million 4.65% non-cumulative Class A Series 2 preferred shares
bbb (Good) on CAD 300 million 4.5% non-cumulative Class A Series 3 preferred shares
bbb (Good) on CAD 158.4 million 2.178% non-cumulative Class 1 Series 3 preferred shares
bbb (Good) on CAD 250 million 4.351% non-cumulative Class 1 Series 9 preferred shares
bbb (Good) on CAD 200 million 4.731% non-cumulative Class 1 Series 11 preferred shares
bbb (Good) on CAD 200 million 4.414 non-cumulative Class 1 Series 13 preferred shares
bbb (Good) on CAD 200 million 3.786 non-cumulative Class 1 Series 15 preferred shares
bbb (Good) on CAD 350 million 3.9% non-cumulative Class 1 Series 17 preferred shares
bbb (Good) on CAD 250 million 3.8% non-cumulative Class 1 Series 19 preferred shares
bbb (Good) on CAD 250 million 4.70% non-cumulative Class 1 Series 25 preferred shares
bbb (Good) on CAD 41.6 million variable rate non-cumulative Class 1 Series 4 preferred shares
The Manufacturers Life Insurance Company
a (Excellent) on CAD 1.0 billion 3.181% subordinated debentures, due 2027
Manulife Finance (Delaware), L.P.
bbb+ (Good) on CAD 650 million 5.059% subordinated debentures, due 2041
John Hancock Life Insurance Company (U.S.A.)
a (Excellent) on USD 450 million 7.375% surplus notes, due 2024 (formerly issued by John Hancock Life Insurance Company)
a+ (Excellent) on all outstanding notes issued under the program John Hancock Signature Notes (formerly issued by John Hancock Life Insurance Company)
The following indicative Long-Term IRs under the shelf registration have been affirmed with stable outlooks:
Manulife Financial Corporation
a- (Excellent) on senior unsecured debt
bbb+ (Good) subordinated debt
bbb (Good) on preferred stock
This press release relates to Credit Ratings that have been published on AM Bests website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Bests Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Bests Credit Ratings, Bests Performance Assessments, Bests Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Bests Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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