Manulife Financial Corporation · TSX:MFC
Manulife Financial — Investor Day (June 2003)
13 slides from Manulife Financial's investor day presentation, Jun 16, 2003
Slide 1: Reinsurance Operations
Reinsurance Operations Steven Mannik Senior Vice President & General Manager, Reinsurance Operations Annual Investor Day June 16, 2003
Slide 2: 13% of Net Income, 10% of Premiums, 5% of GF Assets
13% of Net Income 10% of Premiums 5% of GF Assets 2
Slide 3: Reinsurance and Retrocession
Reinsurance Insurance for insurers Retrocession Insurance for reinsurers Traditional Reinsurer assumes risk from cedant, either: “Proportional” where reinsurer gets a share of each risk, usually from first dollar; or “Non-Proportional” where reinsurer provides “excess of loss” (catastrophe) or stop-
Slide 4: Business Overview
Business Overview l Life Retrocession l Retrocession from life reinsurers l Mostly “excess” business on a “YRT” basis l Accident l Catastrophe coverage (“non-proportional”) l Some proportional coverage, e.g. travel accident 4
Slide 5: Business Overview
Business Overview l Structured l Alternative risk transfer transaction to achieve a financial goal, e.g. surplus relief l Profits returned to client net of fee l Property & Casualty l Alternative risk transfer “non-traditional” transaction to spread losses on property “super CAT” events l Also “trad
Slide 6: Business Overview
Business Overview l Long Term Care l Launched product line during Q1 l Act as a reinsurer l Provide turnkey solutions to direct writers entering the LTC market l Expect to begin writing business during Q3 2003 6
Slide 7: Profit Model #1
Profit Model #1 l Traditional proportional business l Life Retrocession and Long Term Care l Longer term risk business l PfADs create strain at issue l Embedded value released over time 7
Slide 8: Profit Model #2
Profit Model #2 l Traditional catastrophe business l Accident and P&C l One year contract l Risk premium received and released to profit (assuming no losses) in relatively short period of time 8
Slide 9: Profit Model #3
Profit Model #3 l Non-traditional catastrophe business l P&C l Annually renewable contracts l Manulife keeps a portion of each premium (“reinsurance margin”) and earns a spread on funds on deposit l Claims from catastrophic event triggers repayment features 9
Slide 10: Profit Model #4
Profit Model #4 l Fee-based business l Structured and some P&C l Transfer of remote product risk to Manulife l Contracts typically last five years l Counterparty risk exists through issuance of Letters of Credit 10
Slide 11: Business Model
Business Model l Wholesaler – low expense to net income ratio l Will not chase business volumes l Opportunistically capitalize on businesses where we have expertise and which fit MFC risk tolerance l Benefit from being a strong counterparty l Not many direct competitors 11
Slide 12: 2003 Priorities
2003 Priorities l Risk management l Grow bottom line / embedded value l Improved efficiency and effectiveness 12
Slide 13: Question and Answer Session
Question and Answer Session 11 Manulife Financial