Manulife Financial Corporation · TSX:MFC
Manulife Financial — DBS Pulse of Asia Investor Conference 2016
33 slides from Manulife Financial's conference presentation, Jan 6, 2016
Slide 1: Manulife Asia: Making it happen
Manulife Asia: Making it happen DBS Pulse of Asia Investor Conference Singapore January 6, 2016 Steve Roder Senior Executive Vice President and Chief Financial Officer
Slide 2: Caution regarding forward-looking statements
Caution regarding forward-looking statements From time to time, MFC makes written and/or oral forward-looking statements, including in this presentation. In addition, our representatives may make forward-looking statements orally to analysts, investors, the media and others. All such statements are
Slide 3: Agenda
Agenda Manulife at a glance Manulife in Asia 2
Slide 4: Manulife is a leading global financial services company
Manulife is a leading global financial services company C$41 billion C$888 billion market capitalization1 assets under management and administration1 30,000+ 8th largest employees1 life insurer in the world3 C$3.5 billion 3rd largest net income2 life insurer in North America3 1 As at September 30, 2
Slide 5: We have a major presence in…
We have a major presence in… …Four of the world’s 10 largest … And some of the fastest growing economies… markets on the planet Gross Domestic Product Gross Domestic Product Growth (US$ trillion, 2015P, current prices) (10-year CAGR, 2004-2014, US$ Constant Prices) U.S.A 18.1 China 9.9% China 11.2 C
Slide 6: Asia already a significant contributor and becoming ever more important
Asia already a significant contributor and becoming ever more important Core Earnings Wealth & Asset Management Gross Flows (C$ millions) (C$ millions) 2,569 83,597 2,175 39% 51,279 42% 63% 30% U.S. 69% 28% U.S. Canada 19% 31% 17% Canada 30% Asia 14% 18% Asia 3Q14 YTD 3Q15 YTD 3Q14 YTD 3Q15 YTD New
Slide 7: Despite the macro environment, our underlying businesses are delivering sustainable and growing core earnings
Despite the macro environment, our underlying businesses are delivering sustainable and growing core earnings Core Earnings1 (C$ billions) Expect average annual Core EPS1 growth of 4.0 10-12% over the 2.9 medium term2 2.2 2012 2014 2016 Post-2016 actual actual objective (per Investor Day 2012) Note:
Slide 8: Execution of our strategy is expected to lead to sustainable ROE expansion
Execution of our strategy is expected to lead to sustainable ROE expansion For illustrative purposes only. Relative proportions – Not to scale. Core ROE expansion over the medium term1,2 Other levers being actively explored Balance sheet optimization − Blocks of business with suboptimal ROEs are a
Slide 9: Our fast growing Asia and Wealth & Asset Management businesses generate our highest returns…
Our fast growing Asia and Wealth & Asset Management businesses generate our highest returns… Core earnings growth1 Core ROE1 (From 3Q14YTD to 3Q15YTD) (For 3Q15YTD period) Global Wealth and 29.1% 23.2% Asset Management Asia ex. WAM 26.9% 18.3% All other businesses2 18.5% 8.5% Balance Sheet Optimizat
Slide 10: … and have been the focus of our major acquisitions and partnerships
… and have been the focus of our major acquisitions and partnerships Acquisition of Standard Life’s Acquisition of New York Life’s Canadian operations Retirement Plan Services business1 Date effective: January 30, 2015 Date effective: April 14, 2015 Acquisition of Standard Chartered’s 15-year exclus
Slide 11: Agenda
Agenda Manulife at a glance Manulife in Asia 10
Slide 12: Well positioned insurance and wealth management platform in Asia
Well positioned insurance and wealth management platform in Asia Japan China Strong presence in Asia Taiwan 118 years in Asia Hong Macau Kong 7 million customers Thailand Leading professional agency Vietnam Philippines Cambodia 100+ bank partners Over US$73 billion assets Malaysia under ma
Slide 13: Significant business that is well diversified…
Significant business that is well diversified… Total (APE) Sales1 (US$2,236 million) By channel By geography By product Others Alternative Professional Japan Indonesia Term, A&H And Mutual funds, & Others Agency Critical Illness pensions 7% 5% Japan 29% 33% 27% 41% 31% 43% 49% Other Asia 35% Hong Ko
Slide 14: … and delivering substantial growth
… and delivering substantial growth Core Earnings Insurance Sales (US$ millions) (US$ millions) 755 1,091 684 914 +18% +31% 3Q14 YTD 3Q15 YTD 3Q14 YTD 3Q15 YTD Other Wealth Sales Wealth & Asset Management Net Flows (US$ millions) (US$ millions) 2,093 1,031 1,133 +106% +120% 468 3Q14 YTD 3Q15 YTD 3Q1
Slide 15: New Business Value is growing at an accelerated pace and NBV margin is improving
New Business Value is growing at an accelerated pace and NBV margin is improving New Business Value (NBV)1 NBV Margin1 (US$ millions) (%) +58% 71% 65% Hong Kong +47% +38% 34% 155 Total 26% 25% 115 Japan 95 98 78 16% Other 69 18% 13% 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 1Q14 1Q15 2Q14 2Q15 3Q14 3Q15 No
Slide 16: Investing significantly in initiatives and partnerships to accelerate our growth trajectory…
Investing significantly in initiatives and partnerships to accelerate our growth trajectory… Company-wide focus on Additional Asia-specific customer centricity areas of focus Unsurpassed customer experience Building the premium agency in Asia — Simplification is key — Already ranks 1st on customer s
Slide 17: Rolling out initiatives at a fast pace throughout the region
Rolling out initiatives at a fast pace throughout the region 1st foreign invested joint- venture life insurer New sales licensed to sell mutual channel with funds in China WeChat in China Consolidation of Launch of Asia wealth & Partnership with ManulifeMOVE asset management DBS in four in Hong Kong
Slide 18: 15-year exclusive partnership with DBS went live in Singapore, Hong Kong, mainland China and Indonesia
15-year exclusive partnership with DBS went live in Singapore, Hong Kong, mainland China and Indonesia 17
Slide 19: DBS has an extensive market presence and is a natural partner for Manulife
DBS has an extensive market presence and is a natural partner for Manulife Strong and well-staffed branch network in the four markets covered by the agreement Compatible DNA China 29 Hong Kong 50 >200 branches >2,000 sales professionals Singapore 89 Indonesia 39 DBS branches1 1 Source: Company websi
Slide 20: Partnership solidifies Manulife's leading pan-Asian insurance and wealth management franchise
Partnership solidifies Manulife’s leading pan-Asian insurance and wealth management franchise What it means for Manulife in Asia Deepens and diversifies our distribution Increases our scale and capabilities Creates a more balanced portfolio − Singapore is expected to become our 3rd largest bus
Slide 21: Joint DBS-Manulife team is confident that the partnership has been positioned for optimized results
Joint DBS-Manulife team is confident that the partnership has been positioned for optimized results Extensive range of products, with more to be introduced later this year Intensive training for more than 1,000 frontline employees Added over 200 employees across the four markets Sales incent
Slide 22: Formed a 15-year pension distribution partnership with Standard Chartered
Formed a 15-year pension distribution partnership with Standard Chartered The MPF industry is experiencing … and we are partnering with a rapid growth… leading player in Hong Kong Mandatory Provident Fund (“MPF”) industry assets under management1 (US$ billions) +20% CAGR 3rd largest 6,000 bank in Ho
Slide 23: Strengthens our position as the #2 MPF provider by AUM and #1 by net cash flows
Strengthens our position as the #2 MPF provider as measured by AUM, and the #1 MPF provider by net cash flows MPF competitive landscape (excl. ORSO) Rank1 Scheme Sponsor Est. AUM Market Share Market Share2 (US$ billions) (by AUMA) (by net cash flows) #1 18.2 22.8% 15.8% #2 + 17.1 21.5% 25.0% #2 15.1
Slide 24: Launched MOVE in Hong Kong and Macau, a new approach to life insurance
Launched “MOVE” in Hong Kong and Macau, a new approach to life insurance that rewards customers for active living… The old “pre-MOVE” customer journey William applies for insurance Receives policy Vative coverage Makes claims and enquiries Receives premium notice 23
Slide 25: … and helps forge a highly engaging and positive relationship with customers
… and helps forge a highly engaging and positive relationship with customers The whole new customer journey GET READY TO MOVE William buys an Redeems free Downloads MOVE Enrolls in Mobile App and insurance policy device ManulifeMOVE connects his device associated with MOVE at webcart Hello! Keeps en
Slide 26: Early results have been very positive
Early results have been very positive Differentiated Manulife from competitors Enhanced our ability to attract millennials Uplifted Manulife brand perception1 Achieved initial enrollment target faster than planned 1 Source: Post-MOVE Campaign Survey; Nielsen November 2015 25
Slide 27: Rolling-out an electronic point-of-sale (ePOS) tool that covers the end-to-end sales journey
Rolling-out an electronic point-of-sale (ePOS) tool that covers the end-to-end sales journey Allows customers to easily compare needs-based solutions and complete their purchase during a single meeting with their advisor, thanks to automated underwriting capability1 Interactive and engaging design
Slide 28: Results from ePOS pilot launched in mainland China give us a promising outlook
Results from ePOS pilot launched in mainland China in July 2014 give us a promising outlook for other markets ePOS adoption is leading to improved sales productivity China ePOS adoption rate China insurance agency sales1 (US$ millions) 82% 118 68% 81 47% +46%2 33% 3Q14 4Q14 1Q15 2Q15 12 months 12 mo
Slide 29: In September we began selling insurance through WeChat
In September we began selling insurance through WeChat, one of China’s most popular messaging apps 550 m 400 m Monthly active WeChat Wallet users Accounts 46% 63% Use WeChat as Have 50+ 1st preference contacts Source: Andressen Horowitz
Slide 30: WeChat drives customer acquisition through an enhanced and interactive digital experience
WeChat drives customer acquisition through an enhanced and interactive digital experience Ease of transacting 27,000 policies Simple product options sold in the first One-minute purchase time Instant mobile payment 2 weeks Improved experience User-friendly interface Self-service platform M
Slide 31: Summary
Summary Global financial services company with significant presence in Asia Well positioned to deliver accelerated growth and enhance value creation Customer focused strategy driven by innovative solutions DBS accelerates, deepens and diversifies our business 30
Slide 32: 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. A financial measure is considered a non-GAAP measure for Canadian securities law purposes if it is presented other than in accordance wi
Slide 33: Thank you
Thank you Investor Relations contacts Robert Veloso, MBA, CFA Eileen Tam, ACCA, HKICPA David Rancourt, M.Sc., CFA Vice President Assistant Vice President Assistant Vice President robert_veloso@manulife.com eileen_tam@manulife.com david_rancourt@manulife.com (416) 852-8982 (852) 2220-1101 (416) 852-8
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