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Manulife Financial Corporation (NYSE:MFC)

February 12, 2013 2:30 pm ET

Executives

Paul L. Rooney - Chief Operating Officer, Senior Executive Vice President, Chief Executive Officer of Manulife Canada Ltd. and President of Manulife Canada Ltd.

Analysts

Gabriel Dechaine - Crédit Suisse AG, Research Division

Gabriel Dechaine - Crédit Suisse AG, Research Division

Hi, good afternoon. My name is Gabriel. I'm the Canadian financial services analyst. And first of all, I'd like to thank all of you for showing up today, and thank you to Manulife for taking the time to come down to our conference. And I know it was a big ask to leave freezing weather for Miami this time of year, but appreciate it nonetheless.

Just briefly on Manulife, the company is in a very interesting position right now. They're emerging from a period where the company was more inwardly focused on stabilizing the company de-risking and so on and so forth. And now feels like a more focused transition on growth and delivering efficiency throughout the organization, which is something Paul will be intimately involved in over the next few years. Paul Rooney is Manulife's Chief Operating Officer. He's been with Manulife since 1986, ran the Canadian Division from 2007 to 2012, and just took on the role of Chief Operating Officer on January 1. So without further ado, Paul, take it away.

Paul L. Rooney

Good afternoon, everyone, and thank you for attending today. It's a standing-room-only crowd I see, so we appreciate that very much. It's a great pleasure to be here in Miami. Gabriel, thank you very much for inviting us, and we're pleased to be here. Unfortunately, I didn't get my scheduling correct. While we were out standing on the balcony earlier today having lunch, I realized that I should have booked tomorrow off for a golf day. So we'll have to do something about that in the future, won't we?

Unknown Analyst

[indiscernible]

Paul L. Rooney

Good. Thank you.

Today, I'd like to focus my presentation on how we're delivering disciplined growth in the business and in our earnings going forward. We're a leading financial services company.

Oh, sorry, I better get the caution about forward-looking statements and the usual cautions. You can see the verbiage and read it quite quickly.

We're a leading global financial services company, well positioned in the key economies, we're the third largest public life insurance company in North America by market cap and amongst the largest in the world. We have a well-balanced contribution to earnings from our global operations in the 3 largest insurance markets in the world, including our home country of Canada, the fastest growing markets in Asia and in the U.S., where we operate under the John Hancock brand. I'm sure you're familiar with that. Like some of our peers, we have significantly de-risked our business, as well as shifted our business mix towards higher return, less capital-intensive businesses.

Additionally, we have deep roots in Asia and have been operating there for the last 115 years. And Asia is our growth engine for the future. And it's a little different than other companies who aspire to have Asia as their growth engine for the future. We've been in Asia for 115 years, we know the people, we know the culture, we know the ways of doing business, and this is a current story for us with over 1/3 of our earnings now coming from our Asian territories.

In terms of our business mix, it's well diversified by product and by geography. We have well-balanced contribution from our 3 operating divisions, approximately 1/3 each from Asia, John Hancock and Canada. And on a product basis, we generate just over 50% of our earnings from insurance businesses, with the remainder coming from our fee-based wealth management businesses.

Just turning to our 2012 financial highlights and strategic highlights. We reported full year net income of $1.7 billion, a significant progression in earnings since 2010 and an improvement of $1.6 billion since 2011. Core earnings in 2012 were $2.2 billion despite increased expenses associated with additional hedging, specific investments in growth initiatives, most notably in Asia, and significant additional strain caused by lower interest rates prior to product de-risking and repricing. We achieved record levels of insurance in wealth product sales with individual records in many of our businesses around the world. And throughout 2012, we maintained our financial strength with our MCCSR ratio coming in at 211% at the end of 2012, a 7-percentage-point improvement over the prior quarter. We also ended the year with funds under management of $532 billion, another record. Lastly, we are very proud to have exceeded our goals for interest rate and equity market risk reduction 2 years ahead of schedule, we had the goal to achieve these targets by 2014 and have achieved them by the end of 2012. So overall, we are pleased with the progress we have made in 2012. And as we mark -- embark on 2013, I'm confident that Manulife is well positioned to deliver and continue to deliver disciplined and sustainable growth.

So where do we go from here? On Slide 6, you can see that our last Investor Day in November, we announced our 2016 financial objective of $4 billion in core earnings and a core ROE of 13%. And while we recognize these objectives are ambitious, we also believe they're achievable.

How will we get there? Well, there's 3 key ways we will drive the success: First, we will continue to pursue our strategic priorities, which I will talk about in a minute; secondly, we will continue to invest in growth opportunities; and last, we will drive efficiencies and effectiveness throughout the organization through our E&E initiative. The balance of this presentation will focus on these 3 areas.

First of all, in pursuing our 4 strategic priorities to generate earnings growth, first, we want to develop our Asian opportunity to the fullest and build the premiere, top-tier pan-Asian life insurance franchise; secondly, we are growing our wealth and asset management businesses globally, building world-class asset management capabilities, providing simple yet innovative solutions for retail and institutional clients; thirdly, we want to continue to build our balanced Canadian franchise, where we have a variety of products and services from fund management to banking to group products and retail insurance products; and lastly, we want to continue to grow our high-ROE, lower-risk U.S. businesses, with a particular focus on leveraging our strong John Hancock brand.

Let me talk about each of these in a little more detail, starting with Asia and our goal to develop the Asian opportunity to the fullest. We have highlighted some of the key strategies for Asia in the top left corner, where we are building a large pan-Asian footprint with operations in 11 countries. We continue to manage and expand distribution channels, and we are also increasing our focus on wealth management in order to drive further customer penetration into the middle class. We are investing heavily in our brand in Asia and, as a result, have seen increased brand awareness in Indonesia, Singapore and Taiwan. And lastly, we continue to develop a diversified business and geographic portfolio in the region. And these strategies have served us very well. In 2012, we ended the year with record Asian insurance sales of $1.4 billion and record wealth management sales of $2.1 billion, excluding variable annuities. As you can see from the graph on the right, insurance sales have more than doubled in the last 5 years, and the growth rate for our fee-based wealth business is even stronger, albeit from a smaller base. We continue to grow in the fastest-growing economies in Asia and, in 2012, commenced operations in Cambodia as the first wholly owned foreign life insurance company to operate there. In China, we continue to expand our geographic footprint, and we received our 50th city license just last year. We also had a great success in Japan as we launched our strategic income fund, which is really a fund that was launched in North America, in both Canada and the U.S. to great success, and we exported that success to Japan. And in just a few short months, we've already delivered over $0.5 billion of sales in the strategic income fund in Japan.

In Asia, we continue to grow our professional agency force while concurrently partnering with other distribution networks, such as banks and independent advisers. And in 2012, we further enhanced and diversified our distribution network with key strategic partners in Indonesia, Malaysia and Japan. And I think in the bottom right, you'll notice the significant shift in our business mix amongst our distributors, which is -- which puts us in a better offensive and defensive position.

On Slide 9, you can see the key strategic priorities for the Canadian Division, and we understand in Canada, it's not enough to be simply a life insurance company or a mutual fund company. It is a smaller country of only 35 million people, and therefore, we need to be more diversified in banking, in wealth management and in insurance. We also need to find niche opportunities, like our Affinity Markets business, as well as our -- serving our institutional clients through group benefits and group pensions. We're focusing on integrated solutions to address our customer and retirement needs and building out new and innovative products like Synergy, which is an all-in-one insurance products. We continue to focus on growing higher-return, less capital-intensive businesses. And cross-selling and collaboration had been a real theme for the Canadian Division, where we have over 25 initiatives working across businesses to leverage the opportunities to cross-sell.

In the Group businesses alone last year, over 20% of all of our group pension [ph] sales came from existing Group Benefits clients. In 2012, we also had record sales in our Group Benefits business, our Mutual Fund business and our Affinity Markets business. And our Group Benefits and Group Retirement Solutions businesses led the industry in sales for 2012. And our Group Pensions business has led the industry in sales for 11 consecutive quarters.

Further, we have a very strong and growing bank, with record assets in 2012 exceeding $21 billion. And as you can see from the graph on the top right, there's a 61% increase in the statutory earnings in the bank between 2012 and -- 2008 and 2012.

We also strategically plan on growing our less guarantee-dependent Wealth and Asset Management businesses. Our key strategies for Wealth and Asset Management include growing a global Wealth and Asset Management business through our 2 premier brands, Manulife Asset Management and John Hancock Asset Management. In each of our divisions, we seek to leverage this expertise to professionals both in the institutional space, the pension space and the retail mutual fund space. In 2012, Manulife Asset Management was awarded a substantial fixed income investment mandate, increased its 4- and 5-Star Morningstar-rated funds to 65, an increase of 7 from the prior year, and grew external assets under management by over 12% to $238 billion. As well, we achieved record funds under management for the company as a whole in 2012.

And now moving on to Slide 11. We continue to focus on our higher-ROE, lower-risk U.S. business while constantly looking to leverage the wonderful John Hancock brand. We're expanding sales of our de-risked Life and Long-term Care businesses in the U.S. And we're continuing to leverage our asset allocation franchise and strong brand leadership to expand market opportunities.

We made great progress in 2012. We had record sales driven by our Retirement Plan Services and Mutual Fund businesses, which led to record funds under management in both businesses. As you can see in the bottom right-hand corner, between 2008 and 2012, we experienced significant growth of mutual fund deposits at John Hancock. We expanded our distribution and focused on areas that had historically been underrepresented, such as the fund-to-fund 401(k) platforms, we're on multiple preferred lists and preferred portfolios with major distributors. This is actually the fastest-growing part of our U.S. business.

We also had strong life insurance sales with a favorable mix in 2012. If you look to the 2 pie charts on the top right, you can see the real shift in our sales mix. Two years ago, about 55% of our sales came from long-duration guaranteed products. Today, we have grown the non-guaranteed business and sold a lot less of the de-risked long-tail business to the point where it's now only 6% of our new business. And this has been a very conscious effort. And we've launched a new suite of life products that are performing very, very well. We continue to have a leading market position in the small case 401(k) market and recently launched a new platform to expand into the small to midsize market. We've also made significant progress on repricing our Long-term Care business. And to-date, we have 43 state approvals for the new enforced price increases.

Turning now to investing for earnings growth, the second driver to our $4 billion goal. Throughout the financial crisis, we have continued to invest in our company, with a focus on accelerating our future earnings growth. And some of those elements over the last 4 years include a number of acquisitions. The TEDA acquisition accelerated our expansion into China's large and high-growth market for institutional and retail wealth management services. The objective was to take advantage of China's growing asset management industry, which is expected to become one of the world's largest. We acquired the retail funds business from AIC in 2009 and added scale to our capabilities in the mutual fund industry in Canada. In 2012, we acquired Wellington West Financial Services, which expanded our broker-dealer reach, with 39 additional financial advisers and just under $1 billion in assets. We also acquired Pottruff & Smith in the travel insurance space and added Benesure through the mortgage broker channel in Canada.

Moving to the middle of the slide, we highlight the investments that we have made in new markets. We entered the Korean asset management market, which is a significant institutional asset management market that are growing at 14% per annum. We also launched a private wealth business in Canada, a unique and seamlessly integrated approach to the wealth management space, including investment management, banking and advisory services.

And lastly, on the right hand side, you will notice the expansion of our existing businesses. Our expanded bancassurance relationships, such as Bank Danamon in Indonesia is contributing to record sales in Indonesia. We're achieving record growth in the agent network in Southeast Asia and are expanding the geographic footprint of our agency force into the second- and third-tier cities. The number of agents in Southeast Asia alone have grown from 15,000 in 2008 to 28,000 at the end of 2012. On a total basis in Asia, we have increased our agents in the region to over 50,000 at the end of 2012.

And lastly, on Slide 13, I'd like to speak briefly about Efficiency & Effectiveness, and this program is designed to support our core earnings growth and ROE objectives, to leverage the scale and global reach of our company and to enhance our competitive positioning. And if you look on the right-hand side of the slide, you'll notice our traditional organizational structure of our geographic territories between Asia, Canada, U.S. and investments, and we've been very successful with that general manager concept of driving success by business unit. However, what we left off the table is the efficiencies of our global reach, of providing services, of integrating services and operations, back-office technologies, as well as opportunities to leverage offshore resources. And so we've organized this initiative not by geographical footprint but by functional alignment, operations, IT, procurement, finance, et cetera. And we've challenged all of these different areas to come up with different and unique operating models to drive our significant savings.

We've also embarked on an organizational redesign, where we're looking at the number of layers in the organization, managerial layers, as well as the spans of control in those layers. And we're taking significant action as we speak in the latter part of 2012 and into 2013 to increase our spans of control of our managers and to delayer the organization. You would have noticed at the end of 2012, we took a $78 million pretax charge to cover some of the costs of this organizational redesign.

So in summary, Manulife is a leading global financial services player, with well-balanced contributions from our -- all of our global operations. We have significantly de-risked the business model and are poised to reap the rewards. And we have a very strong Asian franchise. We've been there for 115 years. We know how to operate in Asia, and we're poised perfectly for future growth in Asia.

This completes my formal remarks, and I'm now glad to take questions. Thank you.

Question-and-Answer Session

Gabriel Dechaine - Crédit Suisse AG, Research Division

Actually, Paul, I'll get it going. You finished off with the Efficiency & Effectiveness slide. Just, I know you're hesitant to give any specifics on how big that initiative could be in terms of pretax cost reduction, but maybe you can frame it in a -- how big is the cost base that you're looking at across the organization? And would it be a meaningful percentage of that cost base that one could expect to see it reduced?

Paul L. Rooney

Sure. Thanks, Gabriel. I don't want people to just look at the E&E initiative as simply a cost reduction strategy because it's not. We're really looking at our organization and how we operate, clarifying roles and accountabilities within the organization to make us more effective and to compete more effectively in the marketplace, to provide better services for our customers, to provide better services for our advisers and to generate disproportionate growth around the world. Now part of it is about becoming more efficient and reducing our cost base, but to an end, meeting our $4 billion goal and becoming more relevant in all of the markets we do business. In terms of -- our total expense base at Manulife is about $4 billion globally. But of course, that isn't a fully addressable spend because a lot of that spend is related to acquisition costs, distributor costs, et cetera, which we don't intend to -- we do intend to meet the market on its own terms. But also a very significant proportion of that is internal costs: IT costs, HR costs, operation costs, management costs, et cetera. And our objective is to take -- to see a sizable percentage reduction in those total costs. But again, at this point, we're not in the position to share what those targets are although we expect them to make a substantial -- a meaningful contribution to our goal of $4 billion by 2016.

Gabriel Dechaine - Crédit Suisse AG, Research Division

And how does this initiative rank in terms of your priorities and your new role in the organization?

Paul L. Rooney

Well, as Donald and I have chatted about, the key priorities for me in my new role are, first of all, to ensure we drive a global strategy. He has asked me to ensure we have a very clear and crisp strategy globally and then ensure that all the businesses are working within those strategic intents, and we talked about those strategic intents here today. To lead the mergers and acquisition area, to align it with the stated strategy and to be proactive in the marketplace, to look for opportunities that fit with our risk parameters and also with our disciplined acquisition priorities. And those are key objectives. The other key objective is delivering on the E&E objectives that have been set out for the -- by the board to the board in terms of our commitment towards the 2014 goals. And the last key piece is to take all these functional areas from business development, strategy, HR, branding, communications, IT, global resourcing -- I'm probably forgetting a couple -- and ensuring that the functional areas are much more cohesively aligned with the businesses. The days where we have a corporate office, which is separate from the businesses and seen as an impediment to success or not well aligned, one of my key objectives is to end that and to ensure that the functional areas in the organization and the group functions or corporate functions are providing value to the businesses, are giving -- delivering service level agreements to the businesses and delivering unit cost improvements to the businesses to help grow the business. So those are some of the key priorities for me, and E&E is certainly in the top 3 or 4.

Gabriel Dechaine - Crédit Suisse AG, Research Division

Okay. Just switching gears here to some of the top line momentum we've seen in the past few quarters and notably in the most recent quarter have been very impressive, strong sales growth. The bottom line hasn't tracked that as closely. And my question is, are we making too big of a deal of the strain issue, just to pick on that? The wealth component seems to be driving up the strain. Is this a short-term headwind and the trade-off is we're going to see earnings emerging sooner from that type of activity?

Paul L. Rooney

Well, I guess I'll just start with the fact that North American analysts and North American investors sometimes tend to put too heavy an emphasis on current period earnings or quarterly earnings, especially for industries that are such -- have such a long tail as ours. In other parts of the world, they focus almost -- much less on these kinds of measures. And in the wealth space, they really don't focus on net income. They focus on EBITDA and other key spread measures. We're an amalgam of businesses, and we constructed our earnings by source and the way we talked about the company in insurance terms, like new business strain, which is different than if you went to a wealth management company. They wouldn't be talking about new business strain. They would be talking about EBITDA, and they would be talking about investments, and they would accept losses in the first year because they can't capitalize and amortize those costs, and then they would reap the fee benefits going forward. In the insurance space, however, you put up some pads at the beginning of any new life sale, and sometimes you take on strain or new business strain. I think we are making too much of it. I look at the new business embedded value and the growth in the new business embedded value to speak to the future earnings potential of the company. Some of the issues of strain have been a declining interest environment. And as we've been repricing and increasing the price of our insurance products, we've been catching up with the dropping interest rates. Now that interest rates have flattened out and made it beyond the upswing, you'll see the strain from the insurance side becoming a smaller and smaller proportion of our total business strain. But as you look at our Banking business, as you look at our Wealth Management business, you should look to what we call new business strain or losses in the first year as a very positive sign because we expend so much of those costs in the first year and reap all fee benefits in the later years. So I do think we're making too much of it, and we're going to have to find a way to disclose the information in a more palatable way that our investors can understand it.

Gabriel Dechaine - Crédit Suisse AG, Research Division

So just now we've talked about...

Paul L. Rooney

Any questions from the floor?

Unknown Analyst

[indiscernible]

Gabriel Dechaine - Crédit Suisse AG, Research Division

I have to repeat that one for the audience. The question was about the new business embedded value and how much of it is split between Insurance and Wealth?

Paul L. Rooney

Yes, I don't have those stats in front of me. I don't know. Do you have the stats with you? Yes, about half and half. Yes, that's what I thought. But we're seeing the more significant growth coming from the Wealth side. And if we continue to see the sales success, you'll continue to see the Wealth side getting -- attaining a disproportionately large share of our new business embedded value. Now we'd like in most territories to get the split up to half the value of the organization from Wealth businesses, half from Life. And in order to do that, more of the new business embedded value in the near term will have to come from the Wealth businesses in order to bridge the gap. And the amount of capital you have to outlay in most of these businesses is quite a bit smaller. So you should continue to see new business embedded value from the Life side outstripping -- sorry, the Wealth side outstripping the Life side in the near term. Other questions? Yes?

Unknown Analyst

[indiscernible] independent, and I'm just wondering, what have you done to grow that business? Have you de-emphasized independent asset managers for proprietary products, et cetera?

Paul L. Rooney

Yes, so your question is focused on the Canadian market, but I'll broaden it to the global space as well. In Canada, we've seen excellent growth in our Mutual Fund business. We had a focused strategy a few years ago of -- three-pronged strategy, increasing our brand and brand awareness that Manulife is in mutual funds and successful in mutual funds; penetrating further multiple distribution channels, including bank-owned distribution; and thirdly, increasing the number of 4- and 5-Star fund managers. And we've been performing very well in Canada on all 3 fronts and -- by growth in AUM, the fastest-growing mutual fund complex, as rated by S&P Canada. Now it's a smaller company, the denominator is smaller, but we're very pleased with the growth in Canada. And again, those 3 key strategic themes remain: Building the brand that we are a mutual fund company, not an insurance company; two, that we are significantly increasing our -- the number of 4- and 5-Star Morningstar-rated funds; and thirdly -- I forgot -- oh, penetrating all of these unique distribution channels. Globally, the themes are quite the same. In John Hancock and in Asia, we're really focusing on brand and getting the message out there that we're more than just a life insurance company, and that's resonating very well. We've invested heavily on our asset -- institutional asset management space. You remember Donald Guloien saying they used to celebrate $50 million wins in the institutional asset management space. Now we have $5 billion mandates on a day and no one bats an eye anymore. Our external asset management assets are now at $238 billion, up 12% from last year. Our sales success in John Hancock on the mutual funds side is remarkable. We had $13 billion of new sales, mutual fund sales, at John Hancock in 2012. I know a lot of companies, mutual fund companies, that don't have $13 billion in assets. And John Hancock has enabled to put $13 billion of new assets on in 1 year. In Asia, we're seeing a great success in Asia. We're up to over $2 billion in sales, significantly up from the prior year. And we're also exporting capabilities. For example, in North America, we had tremendous success with the strategic income fund, which was driving significant growth in both Canada and the U.S. We launched that in the latter part of 2012 in Japan and in a very few short months have generated well over $0.5 billion of new sales. So we'll continue to look to take successes from one territory and export them to other territories in the mutual fund space as we continue to grow out our asset management capabilities. We've had fund managers lift-outs [ph] that have been very successful for us and will continue along that vein as well. Other questions?

Gabriel Dechaine - Crédit Suisse AG, Research Division

Got one on the Long-term Care business.

Paul L. Rooney

Yes.

Gabriel Dechaine - Crédit Suisse AG, Research Division

You have been going through the repricing process for almost 2 years now. The 43 states that have approved price increases, can you give a sense of how those price increases have matched what's being approved versus what you've requested or assumed in the reserves?

Paul L. Rooney

Sure. So the long-term care price increases, we have achieved 43 state approvals, and it's a good cross-section of all of the states, so we're very pleased with that. We want to get to the finish line and get all the state approvals. I believe in every sense, we received 100% of the asked-for increases. There might be some small exceptions to that but nothing material. So overall, we're probably close to 100% of the requested price increases, and we're moving expeditiously towards getting 100% approval in the remaining states.

Gabriel Dechaine - Crédit Suisse AG, Research Division

What about the regulatory environment in Canada? It seems like it's gotten more favorable. OSFI put the roadmap out last September, outlining a few of the key capital regulation themes that they want to look at over the next few years, we've just received a bit of a boost from lower lapse charge, capital charges, and that's giving a little boost to Manulife, amongst others. Is it okay to think that the regulatory environment is indeed getting better?

Paul L. Rooney

Thanks, Gabriel. I'm always thrilled to talk about our regulators.

Gabriel Dechaine - Crédit Suisse AG, Research Division

Welcome.

Paul L. Rooney

That was facetious, okay. In Canada, we've enjoyed a very stable ride through a financial crisis. And I believe that's for 2 very specific reasons: One, a reasonable leadership and management of our financial institutions in Canada; and two, a very cautious and capable regulator in Canada. And the combination of those 2 things have allowed us to come through the financial crisis quite unscathed. There's no financial service company in Canada that has asked for $0.01 of help from their taxpayer base, nor do I foresee that ever happening. So I think the balance and the prudence exists. I think through the financial crisis, OSFI was quite appropriately, more concerned about financial institutions and ensuring that there was sound levels of capital throughout the industry. And I think as we look at things today, and they've talked with companies about the risk on their balance sheet, including ours and our peers, in terms of our strategies for de-risking and changing our balance sheet, I think they're pleased with the progress that we've made as an organization in terms of de-risking and reshaping our portfolio, and also our prospects for growth. And I think that the best news of all was when they came out with their most recent report, they said that they found the assets in the financial services industry in Canada to be sufficient overall and that there is plenty of capital backing these financial institutions, that they're comfortable with the total safety net for the industry. Coming from a regulator, that's high praise indeed. And so I think the tone is good. I think the relationship with OSFI is good. And while we won't always see eye to eye on everything, I think it provides us with a very balanced approach for us to think about how we move forward as an organization.

Gabriel Dechaine - Crédit Suisse AG, Research Division

Any other questions from the audience? I've got one more.

Paul L. Rooney

Okay. Last one?

Gabriel Dechaine - Crédit Suisse AG, Research Division

Last one for me anyway.

Paul L. Rooney

Okay.

Gabriel Dechaine - Crédit Suisse AG, Research Division

Actually, I forget it. Oh yes, bancassurance. You've signed up the Bank Danamon in Indonesia not too long ago, and that seems to be progressing well. Are there any other prospects on the horizon for additional bancassurance deals? Manulife has been more historically focused on agency, now embracing bancassurance more readily. What are the -- what's the outlook there for other agreements?

Paul L. Rooney

Well, yes, I think there'll be a lot of opportunities for bancassurance relationships throughout Asia. Many of the banks and insurance companies have entered into agreements or JVs or distribution relationships in the past, some to great success and others with varying success. And like any business model, there will be changing dance partners from time to time. And while we might have been a little late to the game and focused more on agency, the bancassurance model is still in its infancy in Asia, and we plan to be a significant participant in that. And as opportunities come up, all of these deals have finite lifespans, that the ones that haven't gone as well will have an opportunity to convince the bank regardless of what country they operate in that we are a right -- the right partner because of our execution capabilities. If you think back to when a lot of these deals were struck, I think a lot of focus was put on the joint venture itself and the potential financial outcomes for the banks and the insurance companies. And in some cases, there probably wasn't enough attention to execution on the need to distribute insurance products through banks and the unique aspects of distributing insurance that the banks didn't really understand. We're outstanding at that. We know how to deliver insurance solutions to people around the world and to bring insurance capabilities to any customer, whether they're a customer of the bank or anyone else. And I think as you see new bank relationships become available and new bank relationships emerge, that the focus will be on the financials, but more and more, you'll see it being focused on who can execute and who can deliver the sales and the upside that the banks can see. And I think our day will come. I think the Bank Danamon deal was an outstanding opportunity for us and one that we plan on replicating.

Gabriel Dechaine - Crédit Suisse AG, Research Division

Okay.

Paul L. Rooney

If there are no further questions, thank you very much, and have a great afternoon.

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Source: Manulife Financial Corporation Presents at 2013 Credit Suisse Financial Services Forum, Feb-12-2013 02:30 PM
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