Manulife Financial Corporation · TSX:MFC

Manulife Financial — Investor Day (May 2001)

12 slides from Manulife Financial's investor day presentation, May 24, 2001

  1. Slide 1: Embedded Value

    Embedded Value Geoff Guy Executive Vice President & Chief Actuary May 24, 2001

  2. Slide 2: EV Formula

    EV Formula For the technically minded: Value of future after-tax earnings, adjusted for the cost of capital PLUS Value of shareholders’ equity

  3. Slide 3: Value of Inforce Business

    Value of Inforce Business Projected forward Income Income statement Statement for each for each business+ business required + required capital capital Discounted back at x%

  4. Slide 4: Value of Shareholders' Equity

    Value of Shareholders’ Equity The book value of assets in shareholders’ equity that representing free capital are marked to market Shareholders Equity Allocated: Included in business EV Free capital marked to market

  5. Slide 5: CIA Guidelines

    CIA Guidelines • Discount rate – Long term risk free rate…. plus – Risk premium: 3% to 5% • MCCSR multiple at least 150% • “Free Surplus” at market • Assumptions generally the same as best estimates for valuation

  6. Slide 6: Manulife's Principal Assumptions

    Manulife’s Principal Assumptions CIA Manulife Discount Rate LT risk free 10 year Gov’t rate plus plus 4-6% 3-5% MCCSR At least 150% 150% Free Surplus At market At market Assumptions Same as best Equal to estimates for actuarial valuation assumptions in B/S

  7. Slide 7: Change in Embedded Value

    Change in Embedded Value 2000 Currency ($200 million) $9.7 billion $9.9 billion New Business ($600 million) Inforce business ($1.0 billion) Shareholder dividends ($200 million) $11.3 billion GROWTH: +16% (on year end exchange rates)

  8. Slide 8: Sensitivity

    Sensitivity Sensitivity to Changes in Discount Rate +1% -1% -$0.6 bn +$0.7 bn

  9. Slide 9: An Important Business Tool

    An Important Business Tool • Assists comprehension of business results • Creates a value today for today’s events

  10. Slide 10: EV as a Valuation Tool

    EV as a Valuation Tool • Helps compare valuations across borders • EV is the base from which acquirers estimate takeover valuations • Measure of progress in creating shareholder value – Change from period to period is very important

  11. Slide 11: P/EmV: MFC vs European Peers

    MFC vs European Peers Price / Embedded Value 3.0 Aegon 2.5 P/EmV 2.0 ING Prudential AXA MFC 1.5 AllianzCGNU Legal & General CLI Munich Re 1.0 6% 8% 10% 12% 14% 16% 18% 2001E ROE As of May 11, 2001

  12. Slide 12: a global vision

    a global vision

Manulife Financial — Investor Day (May 2001) on 6ix