Manulife CEO Sees India Becoming Big Part of Asia Business

Since 1897

Manulife has been in Asia since 1897, when the insurer sold its first policy in the region, in Shanghai. It now has a presence in more than a dozen Asian markets, with more than 11,000 employees and 80,000-plus contracted agents offering insurance, wealth-management products and asset-management services. Manulife's assets under management in Asia amounted to the equivalent of $147 billion in U.S. dollars, as of March 31.

India's population — which now totals about 1.4 billion, and is forecast to surpass China's in the next decade — is fueling "tremendous" growth in the asset-management industry, Gori said. The industry has posted a compound annual growth rate of 15% in the past 10 years.

"It's clear that there is further growth and upside in terms of the industry and its evolution," Gori said.

Gori is one year into a transformation plan for the 132-year-old insurer, with goals for 2022 that include accelerated growth in four "high potential" areas: Asia insurance; wealth and asset management; behavioral insurance (which encourages clients to lead healthier lifestyles through the use of technology); and Canada group benefits. The plan is to push those areas to about two-thirds of core earnings from about half currently.

"We're going to be investing more resources, more capital, more expense into growing those businesses, because we see they have not only tremendous opportunity and upside, but also that they're delivering great returns for our shareholders," Gori said. "We're feeling pretty good about the progress we're making."

John Hancock

"A third of our profitability comes from the U.S. today and Hancock has operated in the U.S. for 150-plus years," Gori said. "It's a very strong, well-recognized brand that's been in the marketplace for a long period of time and for us contributes significant profitability.

"We feel that it's a market that we have the capability to succeed in," he said. "Our growth over the last five years demonstrates that we've actually been making good progress."

Gori also talked about John Hancock's Vitality wellness incentive program.

"We believe that we can't simply be complacent with the solutions that we're offering, which is why we've pivoted to Vitality," he said. "We think the industry in the U.S. has been a little bit stale. It has operated through very traditional products over a very long period of time, and the consumer needs new products to really have insurance be in their consideration set."

Capital

"That financial flexibility that comes with reducing our leverage is something that we're going to continue to focus on, and that is our No. 1 priority as it relates to our capital position," he said. Debt will be repaid at renewal periods rather than being paid down early, he added.

Returning capital is the next priority: "We announced our buyback program last year and we've been steadily buying back our stock," Gori said. "We're going to continue to be looking for opportunities, because we believe our stock price today is undervalued versus its potential and certainly where we believe the value exists."

Manulife may also consider acquisitions, though those will likely be "opportunistic" and aren't needed for Manulife to reach its earnings growth targets. "We're in a great position in that we don't need that to get growth and to really achieve our aspirations from a company business perspective."

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