A NEW WORLD OF OPPORTUNITY

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A NEW WORLD OF OPPORTUNITY
Presentation to the International Insurance
Societys 41st Annual Seminar in Hong Kong
Dominic DAlessandro President CEO Manulife
Financial July 11th 2005
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A New World of Opportunity

• Industry has changed dramatically over the last
  10 years
• Significant opportunities for future growth
• High growth geographies, evolving product lines
  and further consolidation
• Manulife is well positioned for a leading role in
  the future of the life insurance industry

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Significant Opportunities for Growth

• Select Geographic Markets
• China, India, South East Asia
• Evolving Product Segments
• Pensions, Long Term Care
• Consolidation Opportunities
• United States, Asia

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Select Geographic Markets

• North America
• Wave of demutualizations
• Consolidation driven by need for scale
• Europe
• Erosion of market capitalizations following
  equity market decline
• Asia
• Negative spreads / industry restructuring in
  Japan
• High growth in other countries

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Select Geographic Markets Asia
Source Swiss Re Sigma (Study 3/2004) and CIA
World Factbook.
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Select Geographic OpportunitiesProduct
Portfolios Vary
Breakup of premium income ()
Source Boston Consulting Group
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Select Geographic MarketsChina
Inforce Life Premium Growth
RMBBillions
CAGR 32
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Select Geographic OpportunitiesIndia

• Insurance industry in India has made significant
  progress in recent years
• New competitors, products and distribution
  channels
• Immense size and increasing prosperity will
  create significant opportunity

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Select Geographic MarketsKey Issues for Emerging
Markets

• Exponential growth can create unstable
  environments
• Regulators are stretched
• Lack of experienced management
• Poorly trained agents
• Poor persistency
• Insufficient attention to expense control
• Little concern for consumers
• Ownership restrictions can limit control

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Select Geographic MarketsKey Issues for Emerging
Markets

• Challenging conditions and lack of scale make
  success elusive
• Majority of Manulifes acquisitions have been
  departures by foreign firms

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Evolving Product SegmentsDemographic Shift
World population is aging
Average annual growth rates ()
Source U.S. Census Bureau
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Evolving Product SegmentsHigh Growth Products

• Aging population creating new pressure points
• Governments cannot shoulder entire burden of
  progressively costly schemes
• Individuals realizing need to actively plan for
  retirement needs
• Long term care and pension products well suited
  to fill demand

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ConsolidationCreating Opportunity for Growth

• Benefits of scale continue to drive consolidation
• Rate of consolidation varies by geographic sector
• Western Europe, Canada consolidated markets
• Eastern Europe, United States, parts of Asia
  remain fragmented

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ConsolidationActive Consolidation
Value and number of life insurance transactions
US Millions
Source Morgan Stanley, Zephyr and Bloomberg.
Transactions are reported as of the date
announced, not all deal values were available.
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Manulife Financial
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ManulifeTen Years of Change
1994

• Divestitures of non-core businesses
• Renewed focus on core capabilities
• Acquired Confederation Lifes Group business
  (94)
• Amalgamation with North American Life (96)
• Chinas 1st JV life insurance company (96)
• Expanded into four additional countries in Asia
  (96 -04)
• Entered Japan via JV and subsequent acquisition
  of significant in force block (99)
• Demutualization (99)
• Selective acquisitions in Canada
• Acquired John Hancock Financial Services (04)

2005
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ManulifeTen Years of Growth
10 Years of Strong Earnings Growth
CAGR 25
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ManulifeGlobal Operations

• Asia
• Hong Kong (1897), Philippines (1907), Singapore
  (1980), Indonesia (1985),
• Taiwan (1992), China (1996),
• Macau (1996), Vietnam (1999)
• Thailand (2004), Malaysia (2004)
• Individual Life Insurance
• Group Life Health Insurance
• Pension Products
• Mutual Funds

• Canada (1887)
• Individual Insurance
• Individual Wealth Management
• Group Benefits
• Group Pensions

Investments United States, Canada, United
Kingdom, Japan, Australia, Hong Kong, Southeast
Asia

• United States (1903)
• Individual Insurance
• Long-term Care
• Group Pensions
• Annuities
• College Savings
• Mutual Funds
• Guaranteed Structured Financial Products

• Japan (1999)
• Individual Insurance
• Annuities

• Reinsurance
• United States
• Canada
• Europe
• Asia

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Manulife China Operations Profitable Growth
Ningbo
Dongguan
Foshan
Office established
Licenses granted
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Manulife Product Opportunities

• Significant expertise in both pensions and long
  term care
• Opportunity to expand business by leveraging
  expertise into evolving markets

• A Leader in Pensions and Long Term Care
• 1 in U.S. small case pension market
• 2 in Hong Kong (MPF)
• 1 International pension provider in Indonesia
• 2 in U.S. Long Term Care market

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ManulifeKey Elements of Success

• Core Competencies
• Customer Focus
• Distribution Excellence
• Product Innovation
• Technology
• Risk and Investment Management
• Focus on the bottom line

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Summary

• The life industry provides limitless
  opportunities for well-established players
• Emerging economies, shifting demographics and
  consolidation to drive growth
• Life insurers well suited to provide solutions to
  emerging middle-class in Asia and aging
  populations
• Manulife is positioned as consolidator with
  premium franchises in high growth markets