Manulife Financial Corporation · TSX:MFC
Manulife Financial — The Association of Insurance and Financial Analysts 35th Annual Conference (March 2010)
31 slides from Manulife Financial's conference presentation, Mar 2, 2010
Slide 1: John Hancock's Retirement Plan Services: A Growing Defined Contribution Business
The Association of Insurance and Financial Analysts 35th Annual Conference John John Hancock’s Hancock’s Retirement Retirement Plan Plan Services Services A A Growing Growing Defined Defined Contribution Contribution Business Business Hugh McHaffie, EVP US Wealth Management John Hancock Financial Se
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: Agenda
Agenda Overview of John Hancock’s Market Position Growth Potential of Small Plan Market John Hancock’s Product Positioning Washington Initiatives John Hancock’s Income Solutions 3
Slide 4: Retirement Plan Services: Strategic Focus
John Hancock Retirement Plan Services: Strategic Focus Continued excellence smaller end of market – Remained #1 in assets and plan sales* in less than 100 participate market segment – < 100 participant segment = dominant market share* – < 500 participant segment = leading share among competitors*
Slide 5: Retirement Plan Services: Sales by Market Segment
John Hancock Retirement Plan Services: Sales by Market Segment 12,000 30.0% 11,000 29% 29% 27.5% 28% 10,000 25.0% 25% 25% 9,000 22.5% 24% Plan Sales (# of Plans) 8,000 18% 20.0% Market Share * 17% 17% 7,000 17.5% 6,000 15.0% 243 243 5,000 12.5% 281 4,000 2,728 2,632 10.0% 3,000 2,637 7.5% 2,000 5.0%
Slide 6: Retirement Plan Services: Business Growth
John Hancock Retirement Plan Services: Business Growth Defined Contribution Plans (In-force Cases) 50,000 45,000 AGR C 40,000 11% 35,000 30,000 Funds Under Management* ($US Billions) 25,000 55 50 20,000 GR 45 15,000 40 CA 18% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 35 30 Premiums and Depos
Slide 7: Retirement Plan Services: Earnings
John Hancock Retirement Plan Services: Earnings* 200 150 $US Millions 100 50 0 2005 2006 2007 2008 2009 Strong earnings contributor providing a diversification in earnings stream Recent earnings trend reflect reduced fees on reduced market values but should increase as markets recover Business
Slide 8: Industry Growth in Pensions
Industry Growth in Pensions 401(k) has been the fastest growing retirement plan segment Private Sector Public DB Plans DC Plans 401(k) Only Sector Assets $1,900B $2,665B $2,325B $2,590B Growth -0.4% 2.8% 3.9% 1.4% 2003-2008 Source: Retirement Market in Focus (RRI, RG Wuelfing) May 2009 8
Slide 9: Overall Growth in 401(k) Assets 2000-2014E
Overall Growth in 401(k) Assets 2000-2014E Assets declined from 2007 but are expected to rise again through 2014 4000 3,758 3,511 3500 3,275 3,009 3,050 2,847 3000 2,768 2,665 2,393 $US Billions 2500 2,311 2,187 1,922 2000 1,725 1,682 1,573 1500 1000 500 0 0 1 2 3 4 5 6 7 8 9E 0E 1E 2E 3E 4E 200 2
Slide 10: 401(k) Assets By Segment
401(k) Assets By Segment Most of the assets are with the largest plans, but the future potential is with smaller plans. 401(k) Market Segments 1,389 Plan Size By Participant $US Millions 431 380 322 143 Micro Small Middle Large Mega <100 100-499 500-999 1,000-4,999 >5,000 # Plans 405,000 60,000 9,
Slide 11: How John Hancock Serves Its 'Core' Market
How John Hancock Serves Its ‘Core’ Market Sponsors in small plan market want: 1. Service for them: relieve administrative burden; flexibility 2. Service for employees: education/enrollment 3. Value at reasonable cost John Hancock’s value proposition: – Local plan design expertise (TPA) – Local F
Slide 12: John Hancock's Industry Leading Distribution
John Hancock’s Industry Leading Distribution Top distribution partners Ameriprise Merrill Lynch AXA Morgan Stanley Smith Barney Edward Jones North Western Mutual Life John Hancock Financial Networks UBS LPL Wells Fargo Loyal/repeat 401(k) financial advisors & TPAs – 21%* of FAs use JH as one of
Slide 13: Expansion: Distribution Opportunities and Capacity
John Hancock Expansion: Distribution Opportunities and Capacity 80 70 60 50 40 Wholesalers 30 Sales Desk 20 10 0 2007 2008 2009 Expansion supports Access to 32,000 new advisors through recent addition, Ameriprise, Bank of America, Edward Jones, Morgan Stanley 13
Slide 14: Product Proposition
John Hancock Product Proposition Communications Materials Packaged Product GIFL Select Lifestyle Funds • Asset Allocation Expertise • Multi-Manager “Lifestyle “Lifestyle funds” funds” has has been been aa core core component component of of RPS RPS brand brand and and value value proposit
Slide 15: Lifestyle/Lifecycle: Current Utilization
John Hancock Lifestyle/Lifecycle: Current Utilization Dec 31, 2009 Lifestyle Lifecycle LS + LC Assets $24.9B $3.1B $28.0B % of Total 401k Assets 46% 6% 52% Premiums & Deposits $5.1B $1.3B $6.4B % of Total 401k P&D 46% 12% 58% Investment Performance – Favorable results relative to benchmarks and pe
Slide 16: Washington's Concern: Trends in Participation and Savings
Washington’s Concern: Trends in Participation and Savings Department of Labor(1): – Active participants in DB plans 27 million 1975, 20 million 2006 – Active participants in DC plans 11 million 1975, 66 million 2006(1) Government Accountability Office(2): – Only 36 percent of workers participate
Slide 17: Retirement Preparedness Hasn't Changed Following Market Downturn
Retirement Preparedness Hasn’t Changed Following Market Downturn 39% still not saving Despite market down turn 62% have not adjusted retirement planning Soon to retire 55-63 olds – Believe they need $2 million saved – 51% have saved less than $500,000 – 52% now believe they will retire later t
Slide 18: Pension Protection Act: Auto Enrollment
Pension Protection Act (PPA): Auto Enrollment Auto Enrollment – Has grown in popularity especially in large plans (5000+) – Viewed as a vehicle to combat participant inertia Uptake of auto features not as fast as people expected(1) – Auto Enrollment: 42% of plans – Auto Increase: 34% of plans
Slide 19: Pension Protection Act: Investment Selection
Pension Protection Act: Investment Selection Qualified Default Investment Alternatives (QDIA’s) – Life-cycle or targeted-retirement-date fund; – Balanced fund; or – Professionally managed account. 2008 poor returns puts focus on target-date funds – Senator Kohl wants to require target date fund
Slide 20: Washington's Focus on Annuities
Washington’s Focus on Annuities “The Unloved Annuity Gets a Hug From Obama(1)” Issue – Fewer employers offering defined benefit placing responsibility for savings onto participant – Savings must last throughout retirement – Increased focus on annuities in 401(k) plans and how they can help The
Slide 21: Changing Demographics Trends: Income Management
Changing Demographics Trends: Income Management Aging population and changing employment will shift more 401(k) participants into income management and decumulation 401(k) Participants by Type (millions) 100 80 36.9 33.2 13.2 18 25.1 28.6 28.7 29.7 11.9 60 11 40 58.4 60.6 58 54.6 52.4 50.5 51.9 52
Slide 22: Guaranteed Income for Life Select
John Hancock: Guaranteed Income for Life Select What if Will I have Will my savings something goes enough to last through wrong with the retire? retirement? markets? Predictable Greater certainty Protection from growth, year throughout unpredictable after year retirement markets 22
Slide 23: Guaranteed Income For Life Select
John Hancock: Guaranteed Income For Life Select A simple option for A wide choice of asset employees allocation portfolios Upside potential at Early income option X retirement Access to market value Optional enrollment Benefit base that will not Spousal Option decline in poor markets A portable solu
Slide 24: Guaranteed Income For Life Select Portability Options
John Hancock Guaranteed Income For Life Select Portability Options Participant “distributable event”: – Call rollover into an IRA product that is the mirror image of the 401(k) product – Any built up guarantee is transferred from the 401(k) to the IRA Plan sponsor leaves John Hancock: – Return o
Slide 25: Retirement Income & Rollover Solutions
John Hancock Retirement Income & Rollover Solutions Internal tele-services desk providing direct participant support services upon retirement or termination Provides educational assistance in transfer from existing plan to new plan and/or IRA 2009 rollovers retained $297 million Over 16,000
Slide 26: Appendix
Appendix 26
Slide 27: Lifestyle Performance (YTD thru January 31, 2010)
John Hancock Lifestyle Performance (YTD thru January 31, 2010) 1-Year 3-Year 5-Year 10-Year Performance as of 1/31/20102 Return Return Return Return Lifestyle Aggressive (10/2/97)1 41.42% -6.87% 1.24% 0.97% Morningstar Large Blend Category 34.15% -7.17% 0.19% 0.12% S&P 500 Index 33.14% -7.24% 0.18%
Slide 28: Lifestyle Performance (YTD thru December 31, 2009)
John Hancock Lifestyle Performance (YTD thru December 31, 2009) As of 12/31/093 10- Fund Sales & 1-Year 3-Year 5-Year Year Expense Service Expense Performance as of 12/31/20092 Return Return Return Return Ratio AMC Fee Ratio Lifestyle Aggressive (10/2/97)1 36.56% -5.02% 1.71% 0.96% 0.98% 0.10% varie
Slide 29: Performance Notes
Performance Notes 1. Date sub-account or Guaranteed Interest Account first available under group annuity contract. The class introduction date is the same as the sub-account Inception Date. A "class" represents a pre-determined level of the Sales & Service Fee that is applied to all investment optio
Slide 30: Performance Notes
Performance Notes 3. *There may be an asset charge which is calculated on the total value of assets under your plan’s contract. The range is 0% to 4%. For more details contact your plan administrator. A Sales & Service Fee, or the Sales Expense Recovery Charge (SERC) may be included in the total ann
Slide 31: 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. Non-GAAP measures include: Return on Common Shareholders’ Equity; Premiums and Deposits; Premiums and Premium Equivalents; Funds under M