AM Best confirms the credit ratings of Manulife Financial Corporation and its subsidiaries
OLDWICK, New Jersey – (COMMERCIAL THREAD) –AM Best confirmed the financial strength rating (FSR) of A + (superior) and the long-term issuer credit rating (long-term ICR) of “aa-” (superior) of the life / health insurance subsidiaries (L / H) from Manulife Financial Corporation (MFC) (Toronto, Canada) [NYSE: MFC]. At the same time, AM Best confirmed the long-term ICR of “a-” (Excellent) and the long-term issuance credit ratings (long-term IR) of MFC. The outlook for these credit ratings (ratings) is stable. (See below for a detailed list of companies and ratings.)
The ratings of MFC’s L / H subsidiaries reflect the strength of their balance sheets, which AM Best considers to be very strong, as well as their strong operational performance, favorable business profile and very good enterprise risk management (ERM).
MFC’s record remains strong despite the economic and insurance impacts of the global COVID-19 pandemic. MFC’s balance sheet strength reflects its strong capital position with a higher Life Insurance Capital Adequacy Test Ratio (LICAT) than its peers and a Capital Adequacy Ratio (BCAR) score of Best rated as strong as the company continues to focus on capital growth. efficient business lines. In addition to assessing the strength of MFC’s balance sheet, the ratings also recognize the company’s generally strong operating performance in each of its major lines of business over the past several years, with pre-tax profit of over CAD 5 billion in each of the past three years. . MFC’s return on equity was 11.6% at the end of 2020 and has benefited from numerous spend efficiency initiatives in recent periods.
MFC has also benefited from its diverse corporate profile over the past year, which includes market-leading positions in many of its key lines of business and a broad geographic footprint in Asia, Canada and the United States. United. Additionally, innovation played a crucial role in an unpredictable year, and MFC’s digitization efforts allowed continued sales, customer service, and a relatively seamless transition to a remote working environment. Ultimately, the company’s very strong ERM capabilities support the risks within its balance sheet, operational performance and business profile.
While MFC actively manages its legacy businesses – including long-term care and variable annuities – to optimize and reduce risk with organic and inorganic opportunities, AM Best remains somewhat concerned about the significant exposure to these blocks of historically more volatile business. Additionally, while MFC’s alternative investment portfolio is well managed and offers good diversity, it remains high relative to industry averages and may contribute to additional earnings volatility.
The FSR of A + (Superior) and the long-term KPIs of “aa-” (Superior) were confirmed with a stable outlook for the following L / H subsidiaries of Manulife Financial Corporation:
The Manufacturers Life Insurance Company
John Hancock Life Insurance Company (United States)
John Hancock Life Insurance Company of New York
John Hancock Life and Health Insurance Company
The following long-term IRs have been confirmed with a stable outlook:
Manulife Financial Corporation—
– “a-” (Excellent) on USD 1.0 billion 4.15% of senior unsecured fixed rate, maturity 2026
– “a-” (Excellent) on 500 billion USD at an unsecured fixed rate of 2.484%, maturity 2027
– “a-” (Excellent) on 750 million USD at 5.375% senior unsecured fixed rate, maturity 2046
– “a-” (Excellent) on US $ 1.155 billion at an unsecured fixed rate of 3.05%, maturity 2060
– “bbb +” (Bon) on CAD 600 million of 3.317% subordinated debentures, maturing in 2028
– “bbb +” (Bond) on CAD 750 million of 3.049% subordinated debentures, maturing in 2029
– “bbb +” (Bon) on SGD 500 million of 3.0% subordinated bonds, maturing in 2029
– “bbb +” (Good) on CAD 1 billion of 2.237% subordinated bonds, maturing in 2030
– “bbb +” (Good) on 750 million USD of 4.061% subordinated bonds, maturing in 2032
– “bbb +” (Bon) on CAD 1 billion of 2.818% subordinated bonds, maturing in 2035
– “bbb +” (Bon) on CAD 2 billion of 3.375% limited recourse bonds, maturing in 2081
– “bbb” (Bond) on CAD 350 million non-cumulative Class A preferred shares, series 2 at 4.65%
– “bbb” (Bond) on CAD 300 million at 4.5% of class A preferred shares, series 3 with non-cumulative dividend
– “bbb” (Bon) on CAD 158.4 million 2.178% non-cumulative class 1, series 3 preferred shares
– “bbb” (Bond) on CAD 200 million at 3.891% non-cumulative preference shares of category 1 series 5
– “bbb” (Bon) on CAD 250 million 4.312% non-cumulative preferred shares of category 1 series 7
– “bbb” (Bond) on CAD 250 million of 4.351% non-cumulative Class 1 preferred shares, Series 9
– “bbb” (Bond) on CAD 200 million 4.731% non-cumulative class 1 preferred shares series 11
– “bbb” (Bond) on CAD 200 million 4,414 non-cumulative category 1 preferred shares series 13
– “bbb” (Bond) on CAD 200 million 3,786 Class 1 preferred shares series 15 with non-cumulative dividend
– “bbb” (Bond) on CAD 350 million non-cumulative preferred shares of category 1 series 17 at 3.9%
– “bbb” (Bond) on CAD 250 million at 3.8% non-cumulative category 1 preferred shares series 19
– “bbb” (Bond) on CAD 425 million at 5.6% non-cumulative preference shares of category 1 series 21
– “bbb” (Bon) on CAD 475 million at 4.85% non-cumulative preferred shares of category 1 series 23
– “bbb” (Bond) on CAD 250 million at 4.70% non-cumulative preference shares of category 1 series 25
– “bbb” (Bond) on CAD 41.6 million non-cumulative variable rate Class 1 preferred shares, series 4
The Manufacturers Life Insurance Company—
– “a” (Excellent) on CAD 1.0 billion of 3.181% subordinated bonds, maturing in 2027
Manulife Finance (Delaware), LP—
– “bbb +” (Bond) on CAD 650 million of 5.059% subordinated debentures, maturing in 2041
John Hancock Life Insurance Company (US) –
– “a” (Excellent) on 7.375% USD 450 million excess notes, due 2024 (formerly issued by John Hancock Life Insurance Company)
– “a +” (Excellent) on all banknotes in circulation issued under the John Hancock Signature Notes program (formerly issued by John Hancock Life Insurance Company)
The following indicative long-term IRs under provisional registration have been confirmed with a stable outlook:
Manulife Financial Corporation—
– “a-” (Excellent) on senior unsecured debt
– “bbb +” (Good) subordinated debt
– “bbb” (Bon) on the preferred shares
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