Manulife Hong Kong reports record-high core earnings for fourth quarter and full-year 2020

HONG KONG,Feb. 17,2021 -- The Manulife group of companies operating in Hong Kong and Macau ("Manulife Hong Kong") today announced financial results for the fourth quarter and full year of 2020. Despite headwinds from the COVID-19 pandemic,both fourth-quarter and full-year core earnings grew 10% year-on-year to a record high driven by strong execution and momentum of its agency force.

Damien Green,CEO of Manulife Hong Kong and Macau,said,"We delivered record-level core earnings in both reporting periods. Faced with an enormous,year-long challenge,this is a true reflection of resilience of our team and the strength of the Manulife Hong Kong franchise.Over the year our team was impeccable in its execution driven by a winning mindset at all times."

"Our agency force,in particular,was truly outstanding in 2020," continued Mr. Green. "Agency remains our key distribution channel,making up 70% of APE sales in 2020. Compared with the record year in 2019,our Agency APE sales performed very strongly in 2020 and were down only 2%. Our agency APE sales saw a rebound in November and December driven by factors including strong productivity. Our active recruitment drive also helped us deliver an agency headcount growth of 6% year over year and we finished 2020 with a new record of 10,706 agents."

Manulife Hong Kong'sResults Overview:

Core earnings

Core earnings of HK$6.3 billion in 2020,up 10% from 2019,and HK$1.8 billion in 4Q 2020,up 10% from 4Q 2019

Annualized premium equivalent (APE) sales

APE sales of HK$6.0 billion in 2020,down 10% from 2019,and HK$1.5 billion in 4Q 2020,down 15% from 4Q 2019

New business value (NBV)

NBV of HK$3.6 billion in 2020,down 14% from 2019,and HK$1.0 billion in 4Q 2020,down 15% from 4Q 2019

Wealth and asset management (WAM) gross flows

WAM gross flows of HK$39.5 billion in 2020,up 7% from 2019,and HK$10.0 billion in 4Q 2020,down 3% from 4Q 2019

Agency force performance

Number of agents reached a new record of 10,706 as at December 31,2020,up 6% from 2019

Agency APE sales made up 70% of total APE sales in 2020

Agency APE sales in 2020 were down 2% from 2019

Agency-driven Mandatory Provident Fund ("MPF") sales in 2020 rose 38% from 2019

MPF market share:Manulife Hong Kong was the largest scheme sponsor with a share of 24.6% based on assets under management as at December 31,2020 and 39.4% in terms of estimated net cash flows for the period from October 1,2020 to December 31,2020. Manulife Hong Kong formed a strategic alliance with Allianz Global Investors in the fourth quarter of 2020 to further reinforce its MPF market leadership. Inclusive of the strategic partner's market share,Manulife Hong Kong would have had a 25.5% share based on assets under management at the end of 2020.

Full-year core earnings increased 10% to HK$6.3 billion in 2020 from HK$5.8 billion in 2019. Fourth-quarter 2020 core earnings hit HK$1.8 billion,up 10% from HK$1.6 billion in the same quarter of 2019. Core earnings in 2020 and 4Q 2020 increased compared with 2019 and 4Q 2019,respectively,from in-force business growth,favourable new business product mix,and improved policyholder experience,partially offset by lower new business volume.

APE sales in 2020 were HK$6.0billion,down 10% from HK$6.7 billion in 2019,driven by the adverse impact of COVID-19 containment measures,and lower sales to Mainland Chinese Visitors ("MCV"). Excluding MCV sales,full-year APE sales would have grown by 3%. Fourth-quarter 2020 APE sales dropped 15% to HK$1.5 billion from HK$1.8billion in the same period of 2019,due to the extended impact of the pandemic.

NBV was HK$3.6 billion in 2020,down 14% from HK$4.2 billion in 2019,driven by lower sales and a decline in market interest rates. NBV in the fourth quarter of 2020 was HK$1.0 billion,down 15% from HK$1.2 billion in the same quarter of 2019.

WAM gross flows in 2020 were HK$39.5 billion,7% higher than HK$37.2 billion in 2019. In 2020,pension fund sales grew 24% year over year,primarily due to some large cases and the success of agency-driven MPF sales. Fourth-quarter 2020 WAM gross flows were HK$10.0 billion,down 3% from HK$10.4 billion in the same quarter of 2019.

Mr. Green added: "For 2021,we will continue with our ambitious plans to drive our growth agenda and meet customer needs. We will be actively recruiting for our professional agency force,with a long-term goal of double-digit growth in annual headcount. On digital acceleration,we've already earmarked over HK$230 million to invest in customer digital touchpoints and agency sales tools. We'll also continue to deliver new health and retirement solutions and customer services,bearing in mind the increasing protection needs in Hong Kong,Macau and other cities in the Greater Bay Area."

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 2020,we had more than 37,000 employees,over 118,000 agents,and thousands of distribution partners,serving over 30 million customers. As of December 31,we had C$1.3 trillion (HK$7.9 trillion) in assets under management and administration,and in the previous 12 months we made C$31.6 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 155 years. We trade as 'MFC' on the Toronto,New York,and the Philippine stock exchanges and under '945' in Hong Kong.

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. Percentage changes are stated on a year-over-year or quarter-over-quarter basis.

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 2020 Management's Discussion and Analysis.

iv. Annualized premium equivalent ("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. For full definition of APE,see "Performance and Non-GAAP Measures" in Manulife Financial Corporation's 2020 Management's Discussion and Analysis.

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 fund 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 by 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 31,2020.

Manulife Hong Kong announced today its fourth quarter and full-year 2020 financial results. Present at the press briefing were (from left to right): Raymond Ng,Head of Employee Benefits; Rockson Leung,Chief Financial Officer; Damien Green,Chief Executive Officer; Wilton Kee,Chief Product Officer and Head of Health; and Ivan Chan,Chief Agency Officer.