Manulife Financial Corporation · TSX:MFC
Manulife Financial — Scotia Capital Financial Summit 2010
30 slides from Manulife Financial's conference presentation, Sep 16, 2010
Slide 1: Scotia Capital Financial Summit 2010
Scotia Capital Financial Summit 2010 Donald A. Guloien President & Chief Executive Officer September 16, 2010
Slide 2: Legal Disclaimer
Legal Disclaimer Caution Regarding Forward-Looking Statements This presentation 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
Slide 3: Agenda
Agenda Vision, Strength and Priorities Addressing the Challenges Head-On Financial Strength and Business Growth Concluding Remarks 3 3
Slide 4: Manulife Vision
Manulife Vision To be the most professional financial services organization in the world, providing strong, reliable, trustworthy and forward-thinking solutions for our clients’ most significant financial decisions 4 4
Slide 5: Manulife Competitive Strengths
Manulife Competitive Strengths Global competitor of significant scale with established brands, broad product offerings, proven multi-channel distribution and, as a result, leading market positions Firmly established presences, positioned to expand in many of the fastest growing economies in the
Slide 6: Manulife Priorities
Manulife Priorities Growth Maintain strong capital / financial strength Improve ROE Manage risk Continue to offer a quality value proposition to clients 6 6
Slide 7: Key Challenges for the Company and Investor Concerns
Key Challenges for the Company and Investor Concerns Key Challenges Investor Concerns Equity market risk of VA Capital adequacy guarantees Interest rate risk of long Risk management term guaranteed products Morbidity risk on Long Growth Term Care 7 7
Slide 8: Vision, Strength and Priorities / Addressing the Challenges Head-On
Vision, Strength and Priorities Addressing the Challenges Head-On Financial Strength and Business Growth Concluding Remarks 8 8
Slide 9: Addressing the Challenges Head-On
Addressing the Challenges Head-On Substantial revisions to business mix, product design and pricing Reallocation of capital and resources to businesses with higher margins, lower inherent volatility, lesser capital intensity, and potential for robust growth Providing capital to support a high
Slide 10: Reducing New Business Risk Exposures
Reducing New Business Risk Exposures Variable Annuity Sales1 Actively constraining variable (C$ millions) US annuity sales in all geographic Dow Asia Canada markets to limit growth of VA- n 67 2,809 % related equity risk exposure 2,565 2,028 700 730 Substantially reduced sales of book 847 764 64
Slide 11: Reducing VA-related Equity Market Exposure
Reducing VA-related Equity Market Exposure Amount at Risk (Unhedged) VA Exposure Hedged or Reinsured (as a % of Gross Guarantee Value) (in-the-money amounts) (C$ Billions) Hedged Reinsured 28.3 51 51 Do wn 12 12 60 % 19.9 35 30 26 13 23 13.3 13 11.6 11.4 14 39 39 15 8.1 22 17 12 8 1Q09 2Q09 3Q09 4Q0
Slide 12: More Products Growing than Shrinking
More Products Growing than Shrinking U.S U.S Wealth Canada Asia & Japan Reinsurance Insurance Management JH Life JH Wealth Asset Individual Insurance Hong Kong Life & Non-Life Variable Universal Life Management Universal Life Individual Insurance Life Universal Life Defined Contribution Whole Life G
Slide 13: Focus on Higher Return Products and Markets
Focus on Higher Return Products and Markets So what is growing? Insurance Wealth Management Insurance sales1 up 14% on Wealth Management (ex VA) a constant currency basis in sales1 on a constant currency 1H10 vs. prior year, led by: basis up 17% in 1H10, led by: Hong Kong up 47%2 JH Mutual F
Slide 14: Vision, Strength and Priorities / Financial Strength and Business Growth
Vision, Strength and Priorities Addressing the Challenges Head-On Financial Strength and Business Growth Concluding Remarks 14 14
Slide 15: Capital Strength
Capital Strength MCCSR Capital Ratio (MLI)1 Manulife has a history of operating with an MCCSR well above 150% Strong MCCSR of 221% as at June 243 240* 30, 2010… 234 221 221 …with a cushion for equity market and 213 interest rate movements …after having strengthened reserves for today’s interest rate
Slide 16: Ratings Among the Strongest in the Industry
Ratings Among the Strongest in the Industry Agency Financial Strength Rating AA Aa3 AA- A+ Rating Outlook Negative Under Review Stable Under Review AAA, Aaa, A++ AA+, Aa1, A+ AA, Aa2, A AA-, Aa3, A- A+, A1, B++ A, A2, B+ A-, A3, B MFC GWO SLF MET PRU LNC PFG HIG PRU Plc AXA ING ALLIANZ GENERALI CL A
Slide 17: Risk Management
Risk Management Manulife Financial is among only a small number of North American insurers that have earned a "Strong" Enterprise Risk Management designation from Standard & Poor's Manulife Financial continues to focus on its risk management culture; significant resources are devoted to the offi
Slide 18: Diversified High Quality Asset Mix Remains A Strength
Diversified High Quality Asset Mix Remains A Strength Diversified, high quality portfolio: Total Invested Assets 12% in Cash & Policy Loans (C$199.3 billion) 16% in high quality Mortgages 60% in high quality Public & Private Bonds Government 95% of Bonds are Investment Grade, highly diversif
Slide 19: Assets Managed for Third Parties: Growth, Market Share, Recognition
Assets Managed for Third Parties: Growth, Market Share, Recognition External Client AUM1 John Hancock Funds (C$ Billions) YTD sales1 up 75% vs. prior year 116.6 Gross sales market share2 increased from 109.9 0.98% last year to 1.27% Ranked2 sixth in net new flows1 this year 93.9 95.6 through J
Slide 20: Assets Managed for Third Parties: Recognition for Outperformance
Assets Managed for Third Parties: Recognition for Outperformance John Hancock Global Opportunities Fund rated #1 Global Equities Fund by Bloomberg Markets Magazine John Hancock Strategic Income Fund rated in the Top-10 for Global Bond Funds Rankings based on 1, 3 and 5 year total returns, as w
Slide 21: Actively Managing the Manulife Brand
Actively Managing the Manulife Brand Objective: Reinforce our key qualities: Strong, Reliable, Trustworthy, Forward-Thinking Support growth and premium pricing Facilitate increased cross-selling Attract and retain the best talent Communicating: Much more than insurance; “For your future”
Slide 22: Asia Growth Strategy
Asia Growth Strategy MFC is one of only a handful of companies with a significant pan-Asian strategy. Our competitive advantages in Asia include our long- established presence and the breadth of our professional agency force distribution. 22 22
Slide 23: Manulife is Well Represented in the Top Economies in the World
Manulife is Well Represented in the Top 3 Economies in the World and in 4 of the Top 10 Source: Wall Street Journal, International Monetary Fund 23 23
Slide 24: One of the Few Large Pan-Asian Operators
One of the Few Large Pan-Asian Operators Gross Premium1 of Selected Foreign Life Insurers in Asia (US$ billions) Pan-Asian Strategy Single-Country Dominated 17.5 15.0 12.5 10.0 7.5 5.0 2.5 0.0 AIG (excl. AIA) AXA Aviva MetLife-ALICO AIA Allianz Manulife New York Life ING Pru UK Pru US HSBC Sun Life
Slide 25: Long Established and Well Positioned in Many of the Fastest Growing Economies of Asia
Long Established and Well Positioned in Many of the Fastest Growing Economies of Asia M A N U L I F E O P E R A T I O N S Net Income $1.7 billion (2009) R AG %C 28.7 $139 million (1999) Japan 1 FUM China Taiwan $57.2 billion (2009) R AG %C Hong Kong 22.9 Macau $7.2 billion (1999) Philippines Vietnam
Slide 26: Concluding Remarks
Vision, Strength and Priorities Addressing the Challenges Head-On Financial Strength and Business Growth Concluding Remarks 26 26
Slide 27: Manulife Historic Profitability
Manulife Historic Profitability Net Income1 (C$ Billions) 4.0 4.2 CGAAP 3.3 3.4 3.2 3.2 USGAAP 3.1 2.6 2.6 1.5 1.6 1.4 0.5 1.4 1.0 1.1 (0.8) (1.2) 2002 2003 2004 2005 2006 2007 2008 2009 1H10 Return on Equity2 17.7% 18.4% 16.2% 16.8% 13.7% 14.1% 2.0% 5.2% 2002 2003 2004 2005 2006 2007 2008 2009 1 Se
Slide 28: Manulife Competitive Strengths
Manulife Competitive Strengths Global competitor of significant scale with established brands, broad product offerings, proven multi-channel distribution and, as a result, leading market positions Firmly established presences, positioned to expand in many of the fastest growing economies in the
Slide 29: Question & Answer Session
Thank You Question & Answer Session 29 29
Slide 30: 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; Constant Currency Basis; Premiums and Deposits; Premiums and Premium E
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