Manulife Financial Corporation · TSX:MFC
Manulife Financial — 2010 Citi Financials Conference
27 slides from Manulife Financial's conference presentation, Mar 11, 2010
Slide 1: MFC – An investment in Asian growth
MFC – An investment in Asian growth 2010 Citi Financials Conference March 11, 2010 New York Robert Cook Senior Executive Vice President & General Manager, Asia
Slide 2: Legal Disclaimer
Legal Disclaimer Caution Regarding Forward-Looking Statements This document contains forward-looking statements within the meaning of the “safe harbour” provisions of Canadian provincial securities laws and the U.S. Private Securities Litigation Reform Act of 1995. The forward-looking statements in
Slide 3: Significant Scale
Significant Scale North American Life Insurers Global Life Insurers 115.3 46.2 Market Cap in US$ Billions Market Cap in US$ Billions 35.4 34.3 32.1 32.1 29.8 29.8 24.2 24.2 24.2 24.2 23.1 23.2 23.1 16.0 16.4 10.2 9.4 7.8 7.6 AMP AXA MET China Life ING MET AVIVA AFL MFC MFC PRU GWO AFL SLF HIG GNW Ge
Slide 4: Industry Leading Ratings
Industry Leading Ratings Agency Rating Outlook AA+ S&P Negative (Very Strong - 2nd highest of 21 ratings) Aa3 Moody’s Stable (Excellent - 4th highest of 21 ratings) AA Fitch Negative (Very Strong - 3rd highest of 21 ratings) A+ A.M. Best Stable (Superior - 2nd highest of 15 ratings) IC-1 DBRS Stable
Slide 5: Global Presence
Global Presence Canada England Germany Belgium United States China Bermuda Japan Hong Kong Macau Taiwan Barbados Thailand Vietnam Malaysia Philippines Singapore Indonesia Brazil Australia Uruguay New Zealand 4
Slide 6: Product Diversification
Product Diversification #1 Individual Segregated Funds #3 Vietnam Insurance #1 Individual Fixed Annuities #3 China Insurance1 #2 Individual Life Insurance #5 Singapore Insurance #2 Group Benefits #6 Japan Variable Annuities #3 Group Pensions #7 Indonesia Insurance #7 Hong Kong Insurance #1 Individua
Slide 7: Diversified Distribution
Diversified Distribution Advisors Independent Agents Brokers Banks In-house Dealers Agents Financial Wirehouses Planners 6
Slide 8: Focus on Asia
yoy j eal Focus on Asia IM Manulife Financial
Slide 9: Asia looks set to return to its “natural share” of the world economy
Asia looks set to return to its “natural share” of the world economy Share of World GDP Fall of Roman Discovery Industrial Oil (PPP) Empire of America Revolution crisis 100% Rest of 80 world Japan 60 N. America 40 Europe 20 India China 0 1 500 1000 1500 2006 2025F Marco Polo’s French and U.S. Intern
Slide 10: Asia will drive much of the world’s future economic growth
Asia will drive much of the world’s future economic growth Global GDP (PPP ) CAGR CAGR (96-08) (08-15E) $125T 6% 6% Australasia 104 6% 5% 100 Eastern Europe 7% 6% Latin America 6% 5% Middle East + Africa 7% 9% 75 69 European 5% 3% Union United States 50 + Canada 5% 4% 34 Japan 3% 1% 25 Rest of 9% 10
Slide 11: Snapshot of Asia Operations
Snapshot of Asia Operations 10 Countries and Territories 35,000 Agents Japan C h i n a Hong Kong Taiwan ~33% of MFC Insurance Sales1 Philippines Vietnam Thailand Malaysia ~13% of MFC Funds Under Management2 Singapore I ndonesia ~31% of MFC Net Income3 1 Based on 2009 full year data 2 Based
Slide 12: Asia Life Insurance Market Landscape
Asia Life Insurance Market Landscape 50 46.3 Gross premium of selected life insurers in Asia 45 40 35 30 US$ bn 23.8 25 20 14.8 13.7 13.6 15 11.7 10.7 9.6 10 8.0 6.5 6.3 6.1 5 3.5 1.7 1.4 1.3 1.2 0.6 - Aviva AIG (excl. AIA) AXA Sun Life China Life Group Manulife New York Life MetLife ING AIA HSBC Pi
Slide 13: Organizational Structure
Organizational Structure Asia Division Bob Cook Other Asia Territories Hong Kong Japan ASEAN1 China & Taiwan Philip Michael Huddart Craig Bromley Marc Sterling Hampden-Smith ===== ===== ===== ===== 20 years in Asia 4 years in Asia 21 years in Asia 21 years in Asia 14 years in MFC 10 years in MFC 14
Slide 14: Core Strategy & Implementation
Core Strategy & Implementation Execution Growth Insurance and wealth management businesses in all markets Multiple channels in all markets Better leverage of brand and historical commitment to Asia 13
Slide 15: Asia strategy evaluated using market segmentation
Asia strategy evaluated using market segmentation Maturing Emerging Current giant Future giants (KR, TW, HK, (ID, MY, PH, (Japan) (China, India) SG) TH, VN) GDP growth forecast 1% 4% 6% 9% (2009-14): Insurance penetration 8% 5-7% <2% <2% % of GDP: Projected 1% 4% 8% 12% insurance growth rate Feature
Slide 16: Growth Opportunities
Growth Opportunities Organic Business Development Japan - expanded distribution Diversify product offerings to in insurance capitalize on a changing Indonesia – our next big market business Entry into Japan mutual fund Hong Kong – leverage business customer base Successful build of Japan
Slide 17: Japan: Record Insurance Sales
Japan: Record Insurance Sales Insurance Sales Insurance sales up 21% in 2009 (Yen Millions) Driven by new product offerings 30,000 and successful distribution 25,000 initiatives including new MGA 20,000 channel 15,000 Market share gains further reflect 10,000 consumer flight to quality 5,000 0
Slide 18: Japan Wealth Management
Japan Wealth Management De-risking of VA Portfolio Reduced Sales What will replace those sales? Insurance sales through banks to maintain relationships Foreign currency fixed annuities Mutual funds 17
Slide 19: Hong Kong: Strong Agent growth
Hong Kong: Strong Agent growth Number of Agents Agent count up 18% in 2009 4,500 Result of focused Agency recruitment and retention efforts 4,000 Supported by strong Brand and recognized Financial Strength in 3,500 the marketplace Enhances our Financial Planning 3,000 opportunities 2005 2006 2
Slide 20: Hong Kong: Continued growth in MPF
Hong Kong: Continued growth in MPF Mandatory Provident Fund (MPF) MPF Assets system launched in December 2000 (US$ Billions) 2nd largest MPF provider 7 Strong organic growth with 32% 6 CAGR in FUM since inception 5 4 Market share (AUM) of 17.1% in 3 2009, up from 14.7% in 2001* 2 1 Market sh
Slide 21: China: Solid base for growth
China: Solid base for growth Licensed in 11 provinces and 41 cities Government moratorium on expansion for most of 2009 Growth in regular premium insurance of 17%, versus foreign company average of -2%* Growth in agents of 1% versus foreign company average of -15%* Continued strong persisten
Slide 22: China Fund Management Acquisition
China Fund Management Acquisition Fast track entry into China’s large and high growth market for individual and institutional wealth management services through 49% Joint Venture Award-winning management team with extensive experience in China’s asset management market AUM of US$4.4 billion at
Slide 23: ASEAN
ASEAN Insurance sales up 32%1 in 2009 Indonesia Diversifying distribution through 18 bank relationships Insurance sales up 28%1 in 2009; 5 year CAGR of 25% Vietnam Newly launched alternate channels, namely micro-insurance and general agency Malaysia Insurance sales up 16%1 in 2009 Agent
Slide 24: Complementary Wealth Strategy
Complementary Wealth Strategy Goal is to have Asset Management Companies in all countries / territories in which we operate − Increased presence from 3 in 2007 to 9 in 2009 − Only Philippines remains Leverage MFC Global Investment Management expertise and multi-distribution strategy − Internally
Slide 25: Growth Opportunities
Growth Opportunities Continued expansion of our agency systems Development of bank relationships Near Term Entry into Retail MGA channel in Japan Sales growth in our mutual fund businesses Investment in the Manulife brand India and Korea Longer Consolidation in individual countries Ter
Slide 26: Investment Thesis
Investment Thesis MFC is one of only a handful of companies with a significant pan-Asian strategy. Our growth strategies, combined with financial discipline will lead to sustained success. 25
Slide 27: Note to Users
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. Non-GAAP measures include: Return on Common Shareholders’ Equity; Premiums and Deposits; Premiums and Premium Equivalents; Funds under M