Manulife Hong Kong reports strong results for the first quarter of 2019

Hong Kong – The Manulife group of companies operating in Hong Kong (“Manulife Hong Kong”) today reported strong results for the first quarter of 2019. 

Key results as compared to the same period of 2018:  

• Core earnings up 17% to HK$1.3 billion
   
• Annualized premium equivalent (APE) sales up 11% to HK$1.3 billion
   
• New business value (NBV) up 7% to HK$0.8 billion
   
• Wealth and asset management gross flows down 12% to HK$7.4 billion
   
• Mandatory Provident Funds (MPF) market share remained the largest with 23.1% based on assets under management as at March 31, 2019, and 26.4% based on estimated net cash flows for the period from January 1 to March 31, 2019.
   
• Agency force: up 14% over the prior year period to 8,696 agents

“We saw a good start to 2019 with all-time high quarterly core earnings and strong growth in insurance sales,” said Guy Mills, Chief Executive Officer of Manulife Hong Kong. “As a top insurance brand and No. 1 MPF scheme sponsor, we pride ourselves on our ability to respond to customer aspirations with a broad range of bespoke solutions. As we know our customers want choice, we further enhanced our product portfolio in the beginning of the year with new savings plans that help customers build wealth not just for themselves but also for their next generations.”

Core earnings in the first quarter of 2019 was a record HK$1.3 billion, up 17% from HK$1.1 billion for the same quarter of 2018. This was attributable to double-digit growth in insurance sales across all distribution channels.  

Quarterly APE sales rose to HK$1.3 billion, an increase of 11% from HK$1.2 billion in the same quarter of 2018, driven by more appealing product offerings enhanced with new saving products and by higher sales particularly from bank and brokerage channels. 

NBV in the quarter increased by 7% year on year to HK$0.8 billion, due to higher sales volume. 

This quarter’s wealth and asset management gross flows were HK$7.4 billion, down 12% from HK$8.4 billion in the same quarter of 2018, due to the impact of enduring market volatility. 

“The Hong Kong government implemented new tax policies on April 1, which we believe presents great opportunities for Manulife. The tax benefits will incentivize Hong Kong people to review their health and retirement coverage for themselves, as well as for their family members.  Manulife is in a prime position to offer our expertise and advice as a key player that can provide customers with comprehensive tax-deductible solutions,” added Mr. Mills. 

Manulife’s tax-deductible health and retirement solutions comprise certified Standard Plan and Flexi Plan under the HKSAR Government’s Voluntary Health Insurance Scheme (VHIS), the MPF Tax Deductible Voluntary Contributions (TVC) account, and the Qualifying Deferred Annuity Policy (QDAP). Further to the launch of its VHIS plans and MPF TVC account on April 1, 2019, Manulife’s QDAP offering has been approved by the Insurance Authority and is poised for launch in mid-May 2019. 

About Manulife Hong Kong

Manulife Hong Kong, through Manulife International Holdings Limited, owns Manulife (International) Limited, Manulife Asset 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. We operate primarily as John Hancock in the United States and Manulife elsewhere. We provide financial advice, insurance, as well as wealth and asset management solutions for individuals, groups and institutions. At the end of 2018, we had more than 34,000 employees, over 82,000 agents, and thousands of distribution partners, serving almost 28 million customers. As of March 31, 2019, we had over C$1.1 trillion (HK$6.5 trillion) in assets under management and administration, and in the previous 12 months we made C$29.4 billion in payments to our customers. Our principal operations in Asia, Canada and the United States are where we have served customers for more than 100 years. With our global headquarters in Toronto, Canada, 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. 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 First Quarter 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 shares are measured by scheme sponsor share of asset under management and net cash flows. Source: Table on p. 5 of Mercer MPF Market Shares Report as at March 31, 2019.