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About 400 Manulife Financial employees will switch over to IBM as part of the $563m (£392m) deal.
IBM will manage Manulife's IT infrastructure, including data centres, voice and data networks, helpdesks and PCs. Toronto-based Manulife also has operations in more than 10 other countries and territories, including Japan, Taiwan, Hong Kong, the UK, Germany and Singapore.
Manulife is outsourcing its IT infrastructure to IBM in order to focus on its core business and to ensure that its IT infrastructure will remain updated and in line with its business strategy, said Howard Sachar, IBM's manager of insurance research.
The support and delivery of the local area, wide area and metropolitan area networks is being subcontracted by IBM Global Services to Bell Canada's Bell Nexxia, the companies said.
The companies also announced that Manulife would participate in a Canada-based IBM research and development facility for the insurance industry.