Manulife Financial Corporation · TSX:MFC

Manulife Financial — Citi Global Financials Conference 2013

16 slides from Manulife Financial's conference presentation, Nov 20, 2013

  1. Slide 1: Financial Statements on Steroids

    Financial Statements on Steroids The Complexities and Consequences of Inappropriate Accounting Standards Steve Roder Senior Executive Vice President & Chief Financial Officer November 20, 2013 Citi Global Financials Conference

  2. Slide 2: Agenda

    Agenda  3Q13 Highlights & Progress in 2013  Financial Statements on Steroids:  The Complexities and Consequences of Inappropriate Accounting Standards 2

  3. Slide 3: 3Q13 financial highlights

    3Q13 financial highlights  Reported net income attributed to shareholders of $1 billion, reflecting:  Strong investment-related experience of $543 million  Net charge of $252 million related to our annual actuarial review  Generated core earnings1 of $704 million, up $95 million vs. 2Q13  Achie

  4. Slide 4: Progressing well in 2013

    Progressing well in 2013 Core Earnings1 Shareholders’ Net Income Funds Under Management1,2 (C$ millions) (C$ millions) (C$ billions) +14% +150% +10% 1,932 1,833 575 1,695 514 733 YTD12 YTD13 YTD12 YTD13 3Q12 3Q13 Wealth Sales1,2 Mutual Fund Sales1,2 Insurance Sales1,2 (C$ billions) (C$ millions) (C$

  5. Slide 5: Financial Statements on Steroids

     3Q13 Highlights & Progress in 2013  Financial Statements on Steroids:  The Complexities and Consequences of Inappropriate Accounting Standards 5

  6. Slide 6: Who needs financial statements?

    Who needs financial statements?  Key stakeholders use financial statements to understand the performance of a company:  Shareholders and potential investors  Financial analysts  Regulators  Company management  Financial statements play role in capital markets  Financial statements have become

  7. Slide 7: Has mark-to-market accounting improved financial transparency?

    Has mark-to-market accounting improved financial transparency? Complexities in the accounting model can Balance sheet represents liquidation mask the underlying business model value of the company Results in unwarranted Fails to inform users on the accounting volatility performance of the insurance

  8. Slide 8: FASB/IASB proposed insurance accounting changes not well received by stakeholders

    FASB/IASB proposed insurance accounting changes not well received by stakeholders “[Results from our field testing] were either not in line with our expectations or not “We agree that ‘observable reflective of actual economics”, “The market input definition’ of Proposals […] may add more complexity

  9. Slide 9: There are real world implications of mark-to-market accounting

    There are real world implications of mark-to- market accounting Life insurers offer Life insurers are key investors long-duration products in infrastructure projects With government resources increasingly constrained, who will invest in infrastructure and offer long-duration products, if not life in

  10. Slide 10: Standards that reflect the insurance business model would be more transparent & less complex

    Standards that reflect the insurance business model would be more transparent & less complex Most life insurers typically Balance sheets could be Could address comparability buy and hold fixed income prepared on a “matched through high quality, investments to maturity basis” using a selected transpa

  11. Slide 11: Canadian mining industry provides example for assessing appropriateness of “Reserves”

    Canadian mining industry provides example for assessing appropriateness of “Reserves”  Mining companies have reserves in the ground  Insurance companies have reserves on the  In Canada, public mining companies are balance sheet required to file technical geological reports per  An actuarial disc

  12. Slide 12: What about cross-industry comparability?

    What about cross-industry comparability?  Mark-to-market has not allowed us to compare different businesses. Can investors now compare a life insurer with a pizza parlour?  Comparability between businesses in different industries is less important than an accounting system that provides informatio

  13. Slide 13: Conclusion

    Conclusion  Standard setters and regulators need to be cognizant of the real world issues as they consider and approve new standards  Life insurers have long provided stability to the financial system, but mark-to- market accounting may promote imprudent behaviours  Mark-to-market accounting obsc

  14. Slide 14: Questions?

    Questions? forward- thinking reliable — BSeee MM Manulife Financial 14 | For your future”

  15. Slide 15: Note to users - Performance and Non-GAAP Measures

    Note to users - Performance and Non-GAAP Measures We use a number of non-GAAP financial measures to measure overall performance and to assess each of our businesses. A financial measure is considered a non-GAAP measure for Canadian securities law purposes if it is presented other than in accordance

  16. Slide 16: Investor Relations contacts

    Investor Relations contacts Steven Moore, MBA, FCSI, CGA, CFA, CFP Senior Vice President and Treasurer steven_moore@manulife.com (416) 926-6495 Anique Asher, MBA, CA Vice President anique_asher@manulife.com (416) 852-9580 Robert Veloso, MBA, CFA Assistant Vice President robert_veloso@manulife.com (4

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