Manulife Financial Corporation · TSX:MFC
Manulife Financial — Investor Day (June 2024)
38 slides from Manulife Financial's investor day presentation, Jun 25, 2024
Slide 1: The Next Chapter of our Growth Story
The Next Chapter of our Growth Story Investor Day 2024: Asia Phil Witherington President and CEO, Manulife Asia June 25, 2024
Slide 2: Delivering high-quality sustainable growth
Delivering high-quality sustainable growth 2
Slide 3: Looking back: Top takeaways
Looking back: • Megatrends in Asia fuel the significant Top takeaways insurance opportunity in the region • Excellent track record executing on our strategic priorities, outpacing our peers • Unique platform with scale, a diverse distribution platform, customer-centric propositions, and global syner
Slide 4: Asia megatrends continue to give us confidence
Asia megatrends continue to give us confidence Fast growing economies Rising middle class and millionaire Significant protection gaps in (2023-2029 GDP forecast, CAGR1) population Asia Pacific (millions, unless otherwise noted) (US$ billions, 20224) Asia Pacific Health protection gap Vietnam 6% Othe
Slide 5: Uniquely positioned to address changing customer needs
Uniquely positioned to address changing customer needs Rapidly aging population Changing consumer attitudes post-pandemic Changing Asia demographics Accelerated digitalization (% of population aged at or above 651) (% of respondents2) 2022 2022-2027 growth 2022 Expected future increase 31 56 54 1 25
Slide 6: Top Pan-Asian player with deep roots across the region
Top 3 Pan-Asian player with deep roots across the region1 Strong presence 12 insurance >125 years in Asia markets2 Business operations Insurance and WAM businesses Insurance business only WAM business only mainland Diverse distribution 10 exclusive US$26K NBV per China banca active agent Japan partn
Slide 7: Market highlights: Hong Kong, Japan
Market highlights: Hong Kong Japan Hong Kong, Japan Capturing structural opportunities from Driving value as a wealth and retirement domestic and Mainland Chinese Visitors specialist (“MCV”) demand Business highlights: Business highlights: • Increased MCV market share1 • Product mix shift away from
Slide 8: Market highlights: IHNW, mainland China, Singapore
Market highlights: IHNW1, mainland China, Singapore International High Net Worth Mainland China Singapore (“IHNW”)1 Further addressing the HNW opportunity Enhancing productivity and optimizing our Growing through value propositions and with the inclusion of IHNW in Asia on branch presence establishe
Slide 9: Market highlights: Vietnam, Other Emerging Markets
Market highlights: Vietnam Other Emerging Markets Vietnam, Other Revitalizing long-term growth with a focus Delivering long-term sustainable growth Emerging Markets on quality by offering differentiated propositions Business highlights: Business highlights: • Market leading life insurer1 • Indonesia
Slide 10: Resilient during COVID and robust post-pandemic performance
Resilient during COVID and robust post-pandemic performance APE sales1 New business value1 New business CSM1 CSM1 Core earnings1,2 (US$ millions) (US$ millions) (US$ millions) (US$ millions) (US$ millions) +39% 9,570 +22% 6,951 +31% 3,313 +30% +16% 1,518 2,990 1,274 1,206 1,002 1,148 1,006 2017 2023
Slide 11: Outpacing our peers in new business and IFRS 17 metrics
Outpacing our peers in new business and IFRS 17 metrics NBV growth1 NBV margin growth1 Core earnings growth1,2 (%, 2017-2023) (pps, 2017-2023) (%) 30 26 66 6 49 37 11 2 0 -1 -3 2017- 2022- 2017- 2022- 2017- 2022- 2022 2023 2022 2023 2022 2023 (IFRS 4)(IFRS 17) (IFRS 4)(IFRS 17) (IFRS 4)(IFRS 17) -9
Slide 12: We have a clear right to win
We have a clear Trusted brand and scale Diversified distribution platform right to win • Top 3 Pan-Asian life insurer with over • High-quality agency platform with 4.7 125 years of history thousand MDRT1 in 2023 • Well diversified footprint with deep • Leading banca capability with 10 local roots ac
Slide 13: A well-diversified Asia insurance business…
A well-diversified Asia insurance geographic mix Distribution mix (APE sales1,2) business… (APE sales1,2) Agency 38% 5% International HNW Banca 38% 5% Vietnam Other 24% 8% Japan 8% Other Emerging Markets 22% Mainland China Product mix (APE sales1,2) 25% Singapore Par and adjustable 42% Health and pr
Slide 14: …with a high-quality distribution platform
Agency Banca …with a high- quality distribution Contracted agents Bank partners platform 98K >100 MDRT company ranking1 Regional exclusive partnership with DBS #3 #1 Southeast Asian bank3 Top 5 agency ranking2 Customer access4 5 markets >35M 14 Note: All footnotes are on slide 33.
Slide 15: Leveraging synergies across our global franchise
Leveraging synergies across • Robust risk management and global governance standards our global • Capital strength and fungibility, enabling prioritization of high return opportunities franchise • Trusted global brand with aligned strategy to define our market positioning • Global resources and expe
Slide 16: Success story: Leading banca in Singapore
Seamless integration between digital and retail3 Convenience, speed, and simplicity Success story: Retail Digital Leading banca in Leads to Offline Singapore RMs purchase AI / ML led Re-target and • High-performing and sustainable engagement re-engagement business built on an economic construct base
Slide 17: Asia is a key driver of future earnings…
Asia is a key driver of future earnings… Asia as a % of Manulife (2023) APE sales1 New business value New business CSM CSM balance Asia 69% Asia 70% Asia 71% Asia 62% Rest of Manulife 31% Rest of Manulife 30% Rest of Manulife 29% Rest of Manulife 38% 17 Note: All footnotes are on slide 34.
Slide 18: …and a material value generator for our shareholders
…and a material value generator for our shareholders New business lifetime return on capital >25% New business US$1.5B Core earnings (2023)1 US$1.3B Remittance (2023)1 payback year 3 Years 18 Note: All footnotes are on slide 34.
Slide 19: Looking back: Summary
Looking back: • Megatrends fuel the significant insurance Summary opportunity • Excellent track record, outpacing our peers • Clear right to win 19
Slide 20: Embarking on the next chapter of growth
Embarking on the next chapter of growth 20
Slide 21: Looking ahead: Top takeaways
Looking ahead: • Clear Asia ambition: Delivering high-quality Top takeaways sustainable growth by being the #1 choice for customers • Generate >50% of Manulife’s core earnings1 and 21% core ROE by 2027 • Well defined path to reach our ambition and conviction in our ability to execute • Diversified p
Slide 22: Our ambition: Delivering high-quality sustainable growth
Asia region core earnings1 as a % Asia core ROE2 Our ambition: of Manulife Delivering high- +13 pps quality sustainable +5 pps growth by being the #1 choice for >50% customers 37% 21% 16% 2023 2027 2023 2027 22 Note: See “Caution regarding forward-looking statements” below. All footnotes are on slid
Slide 23: Focused on achieving 21% core ROE through execution of our strategy
Focused on achieving 21% core ROE through execution of our strategy Core ROE1 Accelerate growth 21% +2.0 pps through our Accelerate diversified distribution growth platform 16% Deliver sustainable +0.5 pps margin expansion Holistic with our holistic solutions solutions Drive expense +2.5 pps efficie
Slide 24: Accelerate growth through our diversified distribution platform
Accelerate growth Accelerate growth MDRT qualifiers Exclusive banca productivity (Case count/active seller) through our diversified distribution platform >1.5x 1.4x Accelerate agency • Enhance quality recruitment and develop top-tier agents • Uplift productivity through digital tools and analytics •
Slide 25: Deliver sustainable margin expansion with our holistic solutions
Holistic solutions Deliver sustainable Product-level NBV NBV margin2 margin1 (2023) margin expansion with (2023) 1.9x our holistic solutions 2.3x 77% Improve health and protection NBV margin goal2 product mix • Transform CI offerings to address customer needs • Enhance the health sales process, expa
Slide 26: Drive operational excellence and further enhance customer experience
Operational excellence Drive operational Straight-through-processing Digital, customer leader excellence and further enhance customer experience +4pps Drive expense efficiency 88% • Leverage Asia and global scale, and 84% continuing to sustain a culture of efficiency • Further automation to achieve
Slide 27: Looking ahead: Summary
Looking ahead: • Clear Asia ambition with strong focus on Summary execution • To achieve ambition by being the #1 choice for customers • Confidence in our market-level strategies in capturing future growth opportunities 27
Slide 28: Raising the Bar
‘'' Manulife Raising the Bar
Slide 29: Appendix
Appendix • Spotlight on Japan • Spotlight on mainland China • Footnotes • Caution regarding forward-looking statements • Non-GAAP and other financial measures 29
Slide 30: Spotlight on Japan: Execute on value maximization strategy
Spotlight on Japan: Execute on value maximization strategy by positioning as a wealth and retirement specialist Market opportunities Future strategy • Rapidly aging population1 • Capture growing asset accumulation and retirement needs • Growing retirement funding gap2 • Optimize value creation and •
Slide 31: Spotlight on mainland China: Quality distribution and optimizing branch presence
Spotlight on mainland China: Quality distribution and optimizing our branch presence to grow sustainably Market opportunities Future strategy • Attractive long-term market outlook • Capture growth opportunity from branch footprint covering 15 provinces and #2 52 cities World insurance market1 • Deep
Slide 32: Footnotes
Footnotes Slide Footnote 1 Real GDP. Source: IMF World Economic Outlook. 2 Source: Brookings, the unprecedented expansion of the global middle class (2017), middle class is defined as household with incomes between $11-$110 per person/day (“PPP”). 4 3 Source: Knight Frank 2023 wealth report, Asia Pa
Slide 33: Footnotes
Footnotes Slide Footnote 1 Percentage changes in APE sales and NBV are stated on a constant exchange rate basis. APE sales includes non-controlling interests. Unless otherwise specified, all items are net of non-controlling interests. 2017 and 2022 figures include International HNW (IHNW) for compar
Slide 34: Footnotes
Footnotes Slide Footnote 17 1 APE sales includes non-controlling interests. Unless otherwise specified, all items are net of non-controlling interests. 1 Core earnings is a non-GAAP financial measure (2023 Asia net income attributed to shareholders is US$995 million). For more information, see "Non-
Slide 35: Caution regarding forward-looking statements
Caution regarding Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially counterparties to meet their obligations; the availability, affordability and adequacy of reinsurance; legal and regulatory proceedings, from those expr
Slide 36: Non-GAAP and other financial measures
Non-GAAP and other financial measures Manulife prepares its Consolidated Financial Statements in 2022 Comparative Results under IFRS 17 and IFRS 9 accordance with International Financial Reporting Standards (“IFRS”) Manulife adopted IFRS 17 “Insurance Contracts” and IFRS 9 “Financial as issued by th
Slide 37: Reconciliation: Core earnings, CER basis
Reconciliation: Core earnings, CER basis 2017 ($ millions, post-tax and based on actual foreign exchange rates in effect in Global Corporate Asia Canada U.S. Total the applicable reporting period, unless otherwise stated) WAM and Other Core earnings (post-tax) 1,453 1,209 1,609 816 (522) 4,565 CER a
Slide 38: Reconciliation: Expenses
Reconciliation: Expenses ($ millions, and based on actual foreign exchange rates in effect in 2023 the applicable reporting period, unless otherwise stated) Asia 1,138 Canada 1,329 U.S. 703 Global WAM 2,865 Corporate and Other 515 Core expenses 6,550 Amounts per financial statements General expenses