Manulife Hong Kong reports double-digit growth in core earnings, APE sales and new business value in 2019

HONG KONG,Feb. 13,2020 -- The Manulife group of companies operating in Hong Kong ("Manulife Hong Kong") today announced strong growth for the fourth quarter and full-year 2019.

Results overview:

Core earnings

Core earnings of HK$5.8 billion in 2019,up 26% from 2018,and HK$1.6 billion in 4Q19,up 31% from 4Q18

Annualized premium equivalent (APE) sales

APE sales of HK$6.7 billion in 2019,up 33% from 2018,and HK$1.8 billion in 4Q19,up 22% from 4Q18

New business value (NBV)

NBV of HK$4.2 billion in 2019,up 28% from 2018,and HK$1.2 billion in 4Q19,up 19% from 4Q18

Wealth and asset management (WAM) gross flows

WAM gross flows of HK$37.2 billion in 2019,up 13% from 2018,and HK$10.4 billion in 4Q19,up 29% from 4Q18

Mandatory Provident Funds (MPF) market share:Manulife remained the largest MPF scheme sponsor with a market share of 23.8% based on assets under management as at December 31,2019 and 36.8% in terms of estimated net cash flows for the period from October 1 to December 31,2019

Agency force:up 14% from 2018 to 10,083 agents

"We are pleased to report record results for full-year 2019," said Damien Green,Chief Executive Officer of Manulife Hong Kong. "Since the second quarter,we have been a front-runner in the tax-deductible solutions market. Manulife is one of a few insurers capable of offering all of these solutions to customers as a one-stop shop. Demand for these health protection and retirement savings plans has been consistently strong,driving much of our growth over the year,and we're happy to see our customers enjoying tax savings as a result."

Core earnings in the fourth quarter increased 31% to HK$1.6 billion from HK$1.3 billion in the same quarter of 2018. Full-year core earnings increased 26% to a record HK$5.8 billion from HK$4.6 billion in 2018. The strong growth on both a quarterly and full-year basis was driven by improved policyholder experience,higher new business volumes and in-force business growth.

APE sales grew to HK$1.8 billion in the fourth quarter of 2019,up 22% from HK$1.5 billion in the prior year quarter,driven by an increase in sales across all distribution channels,double-digit growth in our agency force and the success of recently-launched products. On a full-year basis,APE sales of HK$6.7 billion increased 33% from HK$5.1 billion in 2018,primarily driven by the success of tax deductible solutions including Voluntary Health Insurance Scheme (VHIS) and Qualified Deferred Annuity Policy (QDAP) products,as well as participating products launched during the year.

NBV in the fourth quarter was HK$1.2 billion,up 19% from HK$1.0 billion in the prior year quarter. NBV was HK$4.2 billion in 2019,up from HK$3.3 billion in 2018 and represented an increase of 28%. The strong NBV growth in both periods was driven by higher sales.

WAM gross flows in 4Q19 increased 29% to HK$10.4 billion from HK$8.1 billion in 4Q18,driven by mutual fund growth in our retail business. On a full-year basis,gross flows of HK$37.2 billion,increased 13% from HK$32.9 billion in 2018,due to stable growth in our retail and retirement businesses.

Over the fourth quarter,Manulife further enhanced its product portfolio with new health and retirement solutions including ManuLeisure Deferred Annuity (ManuLeisure),a tax-deductible QDAP. ManuLeisure is developed with young and middle-aged pre-retirees in mind. Aside from tax concession benefits,this new annuity offers customers a steady stream of retirement income and flexibility when payouts begin.

ManuVital Care,launched last November,was a new addition to Manulife's comprehensive protection suite of products. This critical illness solution offers essential coverage for more than 110 critical illnesses and diseases at affordable,guaranteed premiums. With scale-up features including a unique step-up premium plan and an option to convert to a more comprehensive critical illness solution,the product best suits customers looking for critical illness protection and financial flexibility at earlier stages of their careers.

As part of its drive to enhance the customer experience,Manulife delivered another insurtech service during the fourth quarter. The new Cashless Day Surgery eService is the market's first all-digital cashless service that enables customers to obtain speedy claim pre-approval for colonoscopy and gastroscopy day surgery. Customers can benefit from the service by simply entering their Hong Kong Identity Card (HKID) number and date of birth on a designated online platform. The eService,now available to Manulife's VHIS Flexi Plan customers,has been phased in across 70 designated specialists and 10 surgical centres in Hong Kong.

Mr. Green said: "Demand for protection products will continue to grow as people become wealthier and more health-conscious as life expectancy lengthens. As a pre-eminent health and retirement expert in the industry,we're thinking ahead for our customers and providing them with customizable solutions to help fulfil their aspirations at all stages of life. Our 10,000-strong force of financial advisors and hundreds of distribution partners are here to advise and support customers as they plan for their future."

Notes:

i. Manulife Hong Kong includes all our Hong Kong businesses including insurance,insurance-based wealth accumulation products,and our wealth and asset management businesses.

ii. All percentage changes are stated on a year-over-year basis,except for MPF market share.

iii. Core earnings for Manulife Hong Kong include insurance and insurance-based wealth accumulation products,and exclude our wealth and asset management businesses. Core earnings is a non-GAAP profitability measure. For full definition of core earnings,see "Performance and Non-GAAP Measures" in Manulife Financial Corporation's 2019 Management's Discussion and Analysis.

iv. Annualized premium equivalent ("APE") sales are presented to provide consistency of scope for NBV disclosures and industry practice. APE sales consist of insurance and insurance-based wealth accumulation products,and exclude our wealth and asset management businesses. They comprise 100% of regular premiums/deposits sales and 10% of single premiums/deposits sales.

v. New business value ("NBV") is the change in embedded value as a result of sales in the reporting period. NBV is calculated as the present value of shareholders' interests in expected future distributable earnings,after the cost of capital,on actual new business sold in the period using assumptions that are consistent with the assumptions used in the calculation of embedded value. NBV excludes businesses with immaterial insurance risks,such as Hong Kong's wealth and asset management businesses. NBV is a useful metric to evaluate the value created by Manulife Hong Kong's new business franchise.

vi. Wealth and asset management ("WAM") gross flows is a new business measure comprised of all deposits into mutual funds and pension products. Gross flows is a common industry metric for WAM businesses as it provides a measure of how successful the businesses are at attracting assets.

vii. MPF market share is measured share of assets under management and estimated net cash flows by scheme sponsor. Source: Table on p. 5 of Mercer MPF Market Shares Report as at December 31,2019.

About Manulife Hong Kong

Manulife Hong Kong,through Manulife International Holdings Limited,owns Manulife (International) Limited,Manulife Investment Management (Hong Kong) Limited and Manulife Provident Funds Trust Company Limited. As a member of the Manulife group of companies,Manulife Hong Kong offers a diverse range of protection and wealth products and services to individual and corporate customers in Hong Kong and Macau.

About Manulife

Manulife Financial Corporation is a leading international financial services group that helps people make their decisions easier and lives better. With our global headquarters in Toronto,Canada,we operate as Manulife across our offices in Canada,Asia,and Europe,and primarily as John Hancock in the United States. We provide financial advice,insurance,and wealth and asset management solutions for individuals,groups and institutions. At the end of 2019,we had more than 35,000 employees,over 98,000 agents,and thousands of distribution partners,serving almost 30 million customers. As of December 31,2019,we had C$1.2 trillion (HK$7.2 trillion) in assets under management and administration,and in the previous 12 months we made C$29.7 billion in payments to our customers. Our principal operations are in Asia,Canada and the United States where we have served customers for more than 100 years. We trade as 'MFC' on the Toronto,New York,and the Philippine stock exchanges and under '945' in Hong Kong.