Manulife promises stability, Asian growth
By Cameron French
TORONTO (Reuters) - Manulife Financial Corp (MFC.TO: Quote) is increasing its dependence on Asia as a means to reach a C$4 billion core profit goal by 2016 and promises a departure from the volatile earnings that have plagued recent quarters.
"We expect to see less volatile and far more sustainable earnings than the earnings of the past," Donald Guloien, chief executive of Canada's largest insurer, said at a company investor presentation in Toronto.
The profit goal represents a near doubling of Manulife's current level of profitability, as the insurer had core profit - which excludes the direct impact of financial markets - of C$1.65 billion through the first 9 months of 2012.
The goal, affirmed last week, represents a slight reduction on its previous target of C$4 billion in net profit by 2015.
That projection assumed it would get the largest contribution from its U.S. operation, which includes John Hancock Insurance, and a slightly smaller profit from its Canadian and Asian divisions.
Now, the insurer sees Asia producing the largest chunk of profit where Manulife currently operates in 11 markets and is considering entering more, including Myanmar, said Bob Cook, head of the insurer's Asia division.
Manulife sees its Asian division producing $1.65 billion in core profit by 2016, while its U.S. division is seen with $1.5 billion. It expects C$1.45 billion will come from its Canadian division.
In Asia, Manulife is looking to take advantage of a demographic shift as hundreds of millions of people join the ranks of the middle class over the next several years. Markets such as Cambodia, which Manulife entered in the past year, are just starting to embrace the idea of insurance. Continued...