Manulife Financial Corporation The Manufacturers Life Insurance Company. Annual and Special Meeting May 6, 2010

Transcription

1 Manulife Financial Corporation The Manufacturers Life Insurance Company Annual and Special Meeting May 6, 2010

2 Opening Remarks Gail Cook-Bennett Chair, Board of Directors Manulife Financial Corporation The Manufacturers Life Insurance Company

3 Platform Introductions Michael Bell, Senior Executive Vice President and Chief Financial Officer Donald Guloien, President and Chief Executive Officer J-P. Bisnaire, Senior Executive Vice President, Business Development and General Counsel Angela Shaffer, Vice President and Corporate Secretary

4 The Stars of Excellence This year s honourees come from 12 countries and territories: China Germany Hong Kong Indonesia Japan Malaysia Singapore Taiwan The Philippines Vietnam The United States of America Canada

5 Retiring Board Member Lino J. Celeste Director Since: 1994 Manulife Financial Corporation The Manufacturers Life Insurance Company

6 Calling the Meeting to Order Manulife Financial Corporation The Manufacturers Life Insurance Company

7 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 These forward-looking statements include, but are not limited to, statements with respect of our estimated adjusted earnings from operations. The forwardlooking statements in this presentation also relate to, among other things, our objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates, and can generally be identified by the use of words such as may, will, could, should, would, likely, suspect, outlook, expect, intend, estimate, anticipate, believe, plan, forecast, objective, seek, aim, continue, embark and endeavour (or the negative thereof) and words and expressions of similar import, and include statements concerning possible or assumed future results. Although we believe that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements and they should not be interpreted as confirming market or analysts expectations in any way. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from expectations include but are not limited to: general business and economic conditions (including but not limited to performance of equity markets, interest rate fluctuations and movements in credit spreads, currency rates, investment losses and defaults, market liquidity and creditworthiness of guarantors, reinsurers and counterparties); the ability to execute strategic plans and changes to strategic plans; changes in laws and regulations; changes in accounting standards; downgrades in our financial strength or credit ratings; the ability to maintain the Company s reputation; level of competition and consolidation; the ability to market and distribute products through current and future distribution channels; unforeseen liabilities or asset impairments arising from acquisitions and dispositions of businesses; impairments of goodwill or intangible assets or the establishment of valuation allowances against future tax assets; the ability to implement effective hedging strategies; the ability to source appropriate non-fixed income assets to back the Company s long dated liabilities; the realization of losses arising from the sale of investments classified as available for sale; the accuracy of estimates used in applying accounting policies and actuarial methods used by the Company; Company liquidity, including the availability of financing to satisfy existing financial liabilities on their expected maturity dates when required; obligations to pledge additional collateral; the availability of letters of credit to provide capital management flexibility; accuracy of information received from counterparties and the ability of counterparties to meet their obligations; the availability, affordability or adequacy of reinsurance; legal and regulatory proceedings, including tax audits, tax litigation or similar proceedings; the ability to adapt products and services to the changing market; the ability to attract and retain key executives, employees and agents; the appropriate use and interpretation of complex models or deficiencies in models used; political, legal, operational and other risks associated with the Company s non-north American operations; acquisitions and the ability to complete acquisitions including the availability of equity and debt financing for this purpose; the disruption of or changes to key elements of the Company s or public infrastructure systems; environmental concerns; and the ability of the Company to protect its intellectual property and exposure to claims of infringement. Additional information about material factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forwardlooking statements may be found in the body of this presentation as well as under Risk Factors in our most recent Annual Information Form, under Risk Management and Critical Accounting and Actuarial Policies in the Management s Discussion and Analysis in our most recent annual and interim reports, in the Risk Management note to consolidated financial statements in our most recent annual and interim reports and elsewhere in our filings with Canadian and U.S. securities regulators. We do not undertake to update any forward-looking statements except as required by law.

8 Notice of Meeting and Confirmation of Quorum Manulife Financial Corporation The Manufacturers Life Insurance Company

9 Election of Directors Manulife Financial Corporation The Manufacturers Life Insurance Company

10 Election of Directors of Manulife Financial Corporation Manulife Financial Corporation

11 Nominees for the Election of Directors of Manulife Financial Corporation Linda Bammann John Cassaday Gail Cook-Bennett Thomas d Aquino Richard DeWolfe Robert Dineen Pierre Ducros Donald Guloien Scott Hand Robert Harding Luther Helms Thomas Kierans Lorna Marsden John Palmer Hugh Sloan Gordon Thiessen

12 Election of Directors of The Manufacturer Life Insurance Company The Manufacturers Life Insurance Company

13 Nominees for Election of Policyholders Directors of The Manufacturers Life Insurance Company John Cassaday Thomas d Aquino Richard DeWolfe Thomas Kierans Hugh Sloan Gordon Thiessen

14 Election of the Shareholder s Directors of The Manufacturers Life Insurance Company Linda Bammann Robert Dineen Pierre Ducros Donald Guloien Scott Hand Robert Harding Luther Helms Lorna Marsden John Palmer Gail Cook-Bennett

15 Appointment of Auditors Ernst & Young LLP, Chartered Accountants Manulife Financial Corporation The Manufacturers Life Insurance Company

16 Confirmation of Amendments to By-Law No. 1 Increasing the Aggregate Annual Remuneration Payable to the Board of Directors Manulife Financial Corporation The Manufacturers Life Insurance Company

17 Approval by Shareholders of Manulife Financial Corporation of Advisory Resolution to Accept Approach to Executive Compensation Manulife Financial Corporation

18 Tabling of 2009 Consolidated Financial Statements and Reports of the Auditor and Actuary Thereon Manulife Financial Corporation The Manufacturers Life Insurance Company

20 Presentation by the Chief Financial Officer Manulife Financial Corporation The Manufacturers Life Insurance Company

21 Michael W. Bell Senior Executive Vice President and Chief Financial Officer

22 Overview Financial Results 2009 Q Competitive Advantages

23 Highlights Delivered Higher Earnings Achieved Strong Capital Levels Reduced Risk Rebalanced Business Mix Maintained Top Quartile Financial Strength Ratings

24 Shareholder Earnings C$ billions $1.4B Net income of $1.4 billion $0.5B

25 25 Achieved Strong Capital MLI MCCSR * REGULATORY TARGET: 150% 100 MLI refers to The Manufacturers Life Insurance Company MCCSR Minimum Continuing Capital and Surplus Requirements Post U.S. legal entity reorganization

26 Reduced Risk Net amount at risk (i.e. amount in the money ) 70% to $8.1B Product changes Hedging strategies C$ billions $28.3B 20% 35% 51% Dec Dec Mar Percentage of guarantee value hedged or reinsured $8.1B Mar Mar

27 Rebalanced Business Mix Strong sales in Asia Increased relative focus on insurance and wealth products excluding variable annuities Insurance Wealth (excl VA) Variable Annuities

28 Financial Strength Top quartile financial strength AA + rating from Standard & Poors

29 Solid Investment Portfolio Average of 5 Largest US Public Life Cos* Manulife Financial Fixed Income Gross Unrealized Losses as a % of Regulatory Surplus 48% Remainder of Gross Unrealized Losses Portion of Gross Unrealized Losses > 20% for 6 Months or More 29% Average of 5 Largest US Public Life Cos* 9% 4% MFC As at December 31, 2009 * Average of Prudential, MetLife, Lincoln, Principal, and Hartford. MetLife regulatory surplus as of September 30, MFC regulatory surplus represents available capital as of December 31, 2009 Source for US peer information: JP Morgan

30 Q Results Net earnings of $1.14 billion Return on Equity of 16.8%

31 Q1 Sales 1 Insurance Wealth (excl VA) Variable Annuities 20% 21% 39% 1 Constant Currency

32 Continued Financial Strength 1Q10 MCCSR of 250% 250 Investment credit performance 1Q10 MCCSR Minimum Continuing Capital and Surplus Requirements

33 2009 Summary Delivered Higher Earnings Strengthened Capital Improved Risk Profile Rebalanced Business Mix Maintained Top Quartile Ratings

34 Competitive Advantage

35 Financial Strength Growth Opportunities Financial Strength Ratings International Scale / Diversification

36 Talent a Competitive Advantage STARs of Excellence

37

39 Presentation by the President and Chief Executive Officer Manulife Financial Corporation The Manufacturers Life Insurance Company

40 Donald A. Guloien President and Chief Executive Officer

41 41 Overview 2009 Objectives 2010 Priorities Senior Executive Changes Global Regulatory Reform

42 2009 Priorities Strengthen Capital Levels Reduce Risk Rebalance Business Mix

43 43 Rebalance Business Mix Insurance Sales up 20% Worldwide US Retirement Sales up 66% Mutual Fund Sales: More than doubled in the US Almost four-fold increase in Canada MFC Global now manages $115 Billion for third party clients

44 2010 Priorities 1. Growth 2. Maintaining Strong Capital & Financial Strength 3. Improving ROE 4. Managing Risk 5. Continuing to Offer a Quality Value Proposition for Our Clients

45 Growth

46 Maintaining Strong Capital / Financial Strength Our 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

47 We help people with their BIG financial decisions.

48 Improving ROE For premium products charge premium price Disciplined in our use of capital

49 Managing Risk

50 Quality Value Proposition for Clients... providing strong, reliable, trustworthy and forward-thinking solutions for our clients most significant financial decisions. 50

51 Quality Value Proposition for Clients $16 Billion in High Quality Assets 44% CAGR (lending assets) since 2000

52 Quality Value Proposition for Clients Mandatory Provident Fund 2 nd Largest MPF Provider 32% CAGR (FUM) since inception

53 Quality Value Proposition for Clients $115 Billion in External Client FUM 30% CAGR (FUM) since 2001

54 Senior Executive Changes John DesPrez Simon Curtis Cindy Forbes Diane Bean Stephani Kingsmill

55 Global Regulatory Reform Why should the most successful and prudent institutions in the world be penalized by the failures and excesses of others?

56 Speech from the Throne make Canada an even stronger world financial centre. continue to push for stronger financial market regulation, modeled after Canada s world-leading practices.

57 Life Insurance Industry s Value to Canada Canada s Insurance Industry: Provide products & services 26 million Canadians Pay out $58 billion in benefits a year Provide $3.3 trillion in life insurance coverage Employ over 130,000 Canadians

58 Life Insurance Industry Investments in Canada Invests over $400 billion into the economy Purchases two-thirds of corporate bonds and more than one-third of commercial mortgage loans Provides huge support to small, medium, and large businesses