Manulife Financial Corporation
Manulife Financial Corporation, headquartered in Toronto, provides a wide range of INSURANCE and other financial services to individual and institutional clients in Canada, the US, and numerous Asian countries. For 2003, the company reported total revenues of $16.
Manulife Financial Corporation
Manulife Financial Corporation, headquartered in Toronto, provides a wide range of INSURANCE and other financial services to individual and institutional clients in Canada, the US, and numerous Asian countries. For 2003, the company reported total revenues of $16.7 billion, assets of $149 billion, and about 13 000 employees (not including agents).
Manulife was incorporated as "The Manufacturers Life Insurance Company" by Act of Parliament on 23 June 1887 and was headed by Canada's prime minister, Sir John A. MACDONALD, and Ontario's lieutenant-governor, Sir Alexander CAMPBELL (there were no conflict-of-interest guidelines at the time and it was not unusual for public persons to be involved in private industry). The idea for the company came from J.B. Carlile, who came to Canada as an agent for the North American Life Assurance Company. It was his first-hand experience on which the new company's product portfolio was based.
As managing director of the company, Carlile concentrated very quickly on expanding its reach across the country, establishing representations in Ontario, Québec, and Nova Scotia, and in the still to be fully discovered West. These aggressive efforts paid off. By the time of the first annual meeting on 17 January 1888 (6 months after its incorporation), the company had sold 915 policies for a total of $2.5 million in insurance coverage (an estimated $50 million in current dollars), earning itself the nickname "The young Canadian Giant" by the press. By comparison, it had taken Canada Life, a competitor, nine years to sell $3 million worth of policies.
In 1893, under the leadership of George Gooderham, an initial backer of the company who succeeded Sir John, Manufacturers began to expand internationally, starting with its first international policy in Bermuda and continuing on to other parts of the Caribbean and South America as well as China and India. But the company did not lose sight of the Canadian market and merged with the Temperance and General Life Assurance Company in 1901, with the latter eventually agreeing to give up its name and see its operations integrated. In 1903 Manufacturers began to sell insurance in the US market.
Sun-Life, Canada's largest life insurance company (20 percent market share compared to Manufacturers' 6) struck up talks with Manufacturers in 1915 to discuss the possibility of a merger, a transaction that would have resulted in a $94 million company. Following a review by the government advising against it, the talks were abandoned in early 1916.
After a construction period of more than a year, the company moved its headquarters to a location it occupies to this day - Toronto's Bloor Street - in 1925. From there it was able to weather the downturn in business brought about by the Great Depression. Proceeds from new business during World War II outnumbered claims (as they had done during World War I) and by 1946 the company had assets of $330 million and business in force (total coverage) of $970 million - up from $10 million and $80 million respectively in 1912.
In the mid-1950s, Manufacturers became entangled in the growing economic nationalism movement and, fearing a takeover itself, mutualized in 1958. That is, a special shareholder meeting's vote allowed the company to buy up its own shares - a process that was completed 10 years later. Business continued to be strong and with representations in Hong Kong, the United Kingdom, and Singapore, the company's contracted coverage surpassed the $3 billion mark in 1959, and reached $1 billion in assets in 1961.
Aiming to be at the forefront of technological advances, the company was one of the first companies to introduce a Hollerith tabulating machine, and in 1956 it became the first insurance company to move to a mainframe computer system with the installation of an IBM 650.
In 1971 came a turning point for the company with the ascension of long-time employee Sydney Jackson to the post of president and chief executive officer. Under his leadership, the company adopted a less risk-averse and less top-down style of doing business, an approach that led to increased levels of innovation and business opportunities and, eventually, the number one spot in the industry with assets rising from $2 billion in 1972 to $16.4 billion in 1985 (Sun Life had about $500 million less at that time).
Having expanded far beyond the provision of life insurance products, Manufacturers decided to change its name to reflect its wider range of products and services on offer. In 1990 the name was changed to "Manulife Financial," setting the stage for further expansion and growth. Over the course of the following years, Manulife acquired (and also sold) various insurance and investment companies from around the world.
In the late 1990s, the company decided to demutualize and, once again, to be owned by public shareholders rather than its clients and so be better able to raise capital in the market. Its shares began trading on the TSX and the NYSE on 24 September 1999 and, three days later, in Hong Kong and the Philippines.
Four years later, on 28 September 2003, Manulife announced its plans to merge with John Hancock Financial Services, a $15 billion transaction which, when it closed in April 2004, created the fifth largest life insurance company worldwide, the second largest in the US, and the largest such company in Canada. The global headquarters of the new company is located in Toronto.
Manulife's business, which brought in $16.7 million dollars in revenues in 2003, comprises life and health insurance products, pension plans, and investments. It is organized into six segments: US (37 percent of revenues), Canada (34 percent), Asia (12 percent), Japan (9 percent), Reinsurance (6 percent), and Corporate, providing miscellaneous services. In the Globe and Mail's 2003 listing of Top 1000 publicly traded Canadian companies measured by assets, Manulife ranked 11th.
The US division of Manulife (operating mostly under the "John Hancock" brand name) provides services to wealthy individuals, manages pension plans for small and medium-sized businesses, and mutual fund products to medium-sized companies. In 2003 the division generated income for its shareholders of $455 million and had funds worth $78.9 billion under management.
The Canadian division is the second largest division and, owing to the Canadian origins of Manulife, offers the broadest range of services from various types of corporate and individual life and health insurance and mutual funds to banking services through the Manulife Bank of Canada. In addition to medium to high-income earners, the Canadian division also aims its products at members of various professional, alumni and retiree associations and groups. In 2003 the company had shareholder attributable earnings of $497 million and $39.9 billion in funds under management.
The Asian division traces its roots back to 1897, when Manulife first entered the continent. It offers insurance and wealth management products to groups and individuals, adding $319 million of shareholder income in 2003 and possessing $13.4 billion of assets under management.
The Japan division serves one of the largest insurance market in the world and thus has been rightly set up as a distinct entity. In 2003 it reported $106 million in shareholder income and had $11.6 billion in funds under management.
Finally, the reinsurance division helps to manage risk by providing insurance products to other insurers. It also intends to focus more on the long-term-care market. More specialized and focused than Manulife's other divisions, it has operations in Canada, the US, Barbados and Germany, which contributed $216 million in shareholder income in 2003.
A global company, Manulife supports community and social causes around the world. In 2003 some 800 organizations worldwide received a total of $6.4 million in contributions, in the form of sponsorships or outright donations. Seventy-three percent of the contributions were made to Canadian organizations.
Manulife focuses its charitable efforts in three programs: Healthy Futures - support of organizations engaged in the prevention or treatment of age-related illnesses and diseases; Leaders of Tomorrow - funding of scholarships at the post-secondary level across a number of disciplines; and Partners in the Community - a program designed to encourage employee involvement in the community through matching donations or by donating to organizations where employees volunteer.
James, Fleming Merchants of Fear - An Investigation of Canada's Insurance Industry (1986); Manufacturers Life Insurance Co., Toronto, And all the past is future (1962).