(Toronto) Manulife Financial has signed a reinsurance agreement with Global Atlantic. The insurer estimates that the agreement will allow it to free up 1.2 billion in capital that it plans to use to buy back shares.

The Toronto-based insurer says it reinsures $13 billion in reserves with Global Atlantic and its partners. This is the third agreement between Manulife and Global Atlantic.

Manulife says the deal should free up $1.2 billion in capital that it plans to return to shareholders through share buybacks.

Manulife President and CEO Roy Gori called the deal a major milestone for the company as it reshapes its portfolio, reduces risk and creates value for shareholders.

Manulife says it has received approval from the Office of the Superintendent of Financial Institutions (OSFI) to repurchase up to approximately 2.8% of its outstanding common shares beginning in February.

The share repurchase plan remains subject to approval by the Toronto Stock Exchange.

Company in this news report: (TSX: MFC)