Manulife Financial Corporation · TSX:MFC
Manulife Financial — Merger or Acquisition (December 2023)
17 slides from Manulife Financial's merger presentation, Dec 11, 2023
Slide 1: Manulife announces $13 billion reinsurance transaction, including $6 billion of Long-Term Care
Manulife announces $13 billion reinsurance transaction, including $6 billion of Long-Term Care Largest ever LTC reinsurance transaction December 11, 2023
Slide 2: Caution regarding forward-looking statements
Caution regarding forward-looking statements From time to time, Manulife makes written and/or oral forward-looking statements, including in this presentation. In addition, liabilities or asset impairments arising from acquisitions and dispositions of businesses; the realization of losses arising fro
Slide 3: Conference call participants
Conference call participants Roy Gori, Colin Simpson President & Chief Executive Officer. Chief Financial Officer Marc Costantini Halina von dem Hagen Global Head of Inforce Management Chief Risk Officer Steve Finch Scott Hartz Chief Actuary Chief Investment Officer 3
Slide 4: Reinsurance transaction unlocks significant value for shareholders, while reducing risk
Reinsurance transaction unlocks significant value for shareholders, while reducing risk 1. Significant milestone in our journey to reshape our portfolio: reinsuring $13 billion of reserves1 across 4 legacy/low ROE blocks, including significant LTC risk reduction – Reinsuring $6 billion of LTC reserv
Slide 5: Unlocking significant value for shareholders
Unlocking significant value for shareholders Accretive to key financial metrics Attractive deal multiples (pro forma, post-share buybacks) $1.2B ~9.5x 1.0x +$0.01 +$0.07 Capital Earnings Book value Core EPS4 EPS4 release multiple1 multiple2 accretion accretion $130M $15M +0.13pps +0.33pps Foregone F
Slide 6: Accumulated experience supported transaction on LTC block with more generous policyholder benefits
Accumulated experience supported transaction on LTC block with more generous policyholder benefits Further validation of LTC reserving by 3rd party Summary of LTC block benefits reinforces existing robust reserving practices • Transacted LTC block1 has more generous policyholder • Under Canadian acc
Slide 7: Reducing risks from LTC
Reducing risks from LTC Reduces LTC IFRS reserves1 Reduces LTC morbidity sensitivities (C$ billions) (C$ billions, post-tax, potential impact on reserves3 for a 5% adverse change in LTC morbidity assumptions) -14% 42.5 -12% 3.2 36.5 2.8 Pre-transaction Post-transaction Pre-transaction Post-transacti
Slide 8: Driving additional organic actions while continuing to pursue inorganic opportunities
Driving additional organic actions while continuing to pursue inorganic opportunities Premium increases Buyout programs Strong track-record of obtaining Making cash buyout a standard approvals (over US$10 billion cumulative alternative to premium increases; premium increase approvals to-date); relea
Slide 9: Key messages
Key messages 1. Significant milestone in our journey to reshape our portfolio 2. Reinsuring $13 billion of legacy/low ROE blocks, including $6 billion of LTC reserves, reducing LTC risk 3. Deal unlocks significant shareholder value; returning freed up capital to shareholders 4. Further validates our
Slide 10: Appendix
• Transaction summary • Structural protection Appendix • Overview of LTC risk characteristics 10
Slide 11: Transaction summary
Transaction summary • We have entered into an agreement to reinsure four legacy/low ROE blocks of business to Global Atlantic and its partners. The reinsured blocks are portions of U.S. LTC, U.S. structured settlements, and two Japan whole life products. • Full risk transfer backed by trust and coll
Slide 12: Full risk transfer with significant structural protections
Full risk transfer with significant structural protections Reinsurance of diverse blocks by product and Full risk transfer geography enhances valuation for counterparties Backed by trust and collateral protection • 80% quota share of the ceded LTC block • Insurance coverage to provide • 100% quota s
Slide 13: Overview of LTC risk characteristics
Overview of LTC risk characteristics Transacted LTC block1,2 Retained LTC blocks Overview Average issue date 2001 2006 Benefits % Lifetime benefit by policy count 19% 8% Inflation Protection % Inflation protection by policy count 71% 57% Average attained age of active life reserve (ALR) 83 72 Attain
Slide 14: Non-GAAP and other financial measures
Non-GAAP and other financial measures Manulife prepares its Consolidated Financial Statements in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. We use a number of non-GAAP and other financial measures to evaluate overal
Slide 15: Footnotes
Footnotes Slide Footnote Note: See slide entitled “Caution regarding forward-looking statements” above. All data as of September 30, 2023, unless otherwise noted. All figures and estimates based on exchange rate of US$1.00 to C$1.352. 1 IFRS 17 current estimate of present value of future cashflows +
Slide 16: Investor Relations contact information
Hung Ko Jun Bu Global Head, Investor Relations AVP, Investor Relations hung_ko@manulife.com jun_bu@manulife.com Investor Relations 416 806 9921 200 Bloor Street East 437 423 8267 200 Bloor Street East contact information Toronto, ON M4W 1E5 Toronto, ON M4W 1E5 Yan Decelles Craig Knight AVP, Investor
Slide 17: Manulife
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