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Rating:Three Things to Know About John Hancock from Manulife's Earnings Not Rated 5.0 Email Routing List Email & Route  Print Print
Monday, May 06, 2013

Three Things to Know About John Hancock from Manulife's Earnings

Reported by Tommy Fernandez

It was a good year for the Canadian insurer Manulife, parent of John Hancock.

The parent reported first quarter net income of $540 million, with core earnings of $619 million.

This is what president and chef executive officer Donald Guloien had to say about the company's mutual fund successes:
Manulife also achieved solid results in our U.S. operations in 2012, and as Steve said, this is a great story. Strong sales of retirement plans, services and mutual funds contributed to record funds under management in both of these businesses. Our Wealth Management business in the United States delivered an impressive full year sales of $20.2 billion. If I may, for a moment, put that in perspective, that is almost equivalent to the entire mutual fund sales for the entire industry here in Canada, just a point of reference.

John Hancock Retirement Plan Services grew their funds under management by 14% from 2011 to the end of 2012. John HancockFunds, our mutual fund company, had full year sales of $13 billion and saw increases across all of its sales channels.
If you peruse the SeekingAlpha transcript of the analyst call, as well as the company's earnings information, you'll note at least three themes which are important for following through on John Hancock's growth this year.

They are:

THEME 1: Manulife Has a Four-Pronged Strategy
THEME 2: Overseas Will Be Key
THEME 3: Branding Is Also Very Important

Now to drill down further into these points:

THEME 1: Manulife Has a Four-Pronged Strategy

Guloien had this to say about the four-point strategy during the analyst call:

Donald A. Guloien - Chief Executive Officer, President and Director Looking ahead, I want to provide more detail on how we will develop the growth strategies. We have 4 central ambitions: we want to build a premier, top-tier, pan-Asian life insurance and wealth franchise that is well positioned to satisfy the protection and retirement needs of a fast-growing customer base in that region; we want to build a world-class asset management company, providing innovative investment solutions to retail and institutional investors; we want to build a broad-based diversified financial services company in Canada that develops and delivers integrated solutions to address our customers' protection and retirement needs; and we want to build a leading company in the United States that helps Americans with their retirement long-term care and the state planning needs very effectively.
THEME 2: Overseas Will Be Key

Chief financial officer and senior executive vice president Stephen Bernard Roder, had this to say about Manulife's overseas strategies:
Let's begin with a recap of our growth strategies, which have remained unchanged since 2010, namely: develop our Asian opportunity to the fullest; grow our wealth and asset management businesses in Asia, Canada and the United States; continue to build our balanced Canadian franchise; and continue to grow higher ROE, lower risk U.S. businesses. I'm pleased with the progress we have made on the execution of each of these growth strategies.

I will now go into some more detail on each of these strategies. We continue to develop our Asian opportunity to the fullest. And in 2012, we achieved record insurance sales of USD 1.4 billion and record wealth sales of USD 5.7 billion. We achieved strong growth in our professional agency force in several key markets, ending the year with a record number of agents of over 53,000, an increase of 88% from 5 years ago.

We secured and deepened strategically important distribution agreements with key partners, particularly in Japan and Indonesia, which contributed to the record sales for the year. And we also further increased our pan-Asian footprint by entering our 50th city in China and becoming the first wholly foreign-owned life insurer to commence operations in Cambodia.

In summary, our efforts to further strengthen our distribution capabilities and geographic footprint in Asia led us to excellent sales results in 2012. More importantly, our successes in 2012 position us to better satisfy the protection and retirement needs of the fast-growing Asian markets in the future.

We also continue to grow our wealth and asset management businesses in Asia, Canada and the United States. We ended the year with all-time record funds under management of $532 billion. Manulife Asset Management added significant new institutional mandates totaling over $7.8 billion. We increased the number of 4- and 5-star rated funds by Morningstar to 65, a notable increase of 7 funds from 2011.
THEME 3: Branding Is Also Very Important

Guloien had this to say about branding during the call:
To make this work, we need to get closer to our customers. We need to increase the use of technology to achieve brand recognition, to attract and retain customers, to service them better and to improve collaboration across our business units and divisions.

Our company has 2 very significant brands that have a lot of brand equity: John Hancock in the United States and Manulife here and in the rest of the world. We will need both of these brands to attain leading rankings in their respective markets. We will need to provide people with choices on how they get their financial advice, continuing to focus on our adviser-based distribution strategy, which is core to what we do, but also supplementing it with other channels as dictated by customer preference. We will continue to build a world-class asset management operation, one that provides innovative investment solutions to both retail and institutional customers.
To learn more, read the SeekingAlpha transcript of the analyst call, as well as the company's earnings information

Correction: A prior version of this story gave the wrong first name for Manulife's president and CEO. His name is Donald Guloien.

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