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Questions and Answers
THE COMBINED COMPANY
• Why is the merger good for stakeholders in the Company?
• Who is leading the organization?
• What governance practices are in place to assure investors that their interests will be
protected in the combined company going forward?• What countries does Manulife now operate in?
• How does Manulife now rank by size?
• What is the impact on Manulife’s size in Canada?
• How many jobs will be lost?
• Where does Maritime Life fit into all of this? Will jobs be lost in Halifax as a result of
the transaction? • Will you retain operations where they are now?
• Where will the various Head Offices be located?
BRANDING
• What will be the name of the combined companies?
• Will Maritime Life be renamed?
• What brand will be used to market the products?
• Why did you choose to embrace John Hancock’s brand?
CUSTOMER IMPACT
• What will happen to my Manulife/John Hancock/Maritime Life insurance and/or long-
term care insurance policies? Annuity contracts?• Whom will I call with questions?
COMMUNITY GIVING
• What commitment are you willing to make about community giving?
• What community giving plans do you have in your business centres?
THE COMBINED COMPANY
Why is the merger good for stakeholders in the Company?
The merger between Manulife Financial and John Hancock Financial Services has many benefits for its stakeholders.
This combination turns two exceptionally strong companies into an integrated leader whose scale and capital base will enable even greater growth and shareholder value.
These two companies also complement each other in ways that maximize their respective strengths as well as unlock new opportunities for earnings growth that would not exist but for this combination.
The anticipated benefits to the new entity and shareholders include revenue, distribution and expense drivers:
- Access to deeper and more diversified distribution capabilities;
- A more diverse and competitive product line, and the ability to make each company’s best products available to all distributors;
- Several strong, high-quality brands to market, including John Hancock, which is the primary brand in the United States; and Manulife, which is the primary brand in Canada, Asia and Japan;
- Increased capacity to grow profitable lines of business;
- Stronger and leading market positions in all core business lines;
- A consolidation of operations in the United States, Canada and Asia that is expected to result in an estimated cumulative cost savings of approximately Cdn$350 million (pre-tax) or US$255 million phased in over three years.
1 Note: This is based on 2002-reported net income and is a combination of US GAAP and CGAAP figures.
Who is leading the organization?
As President and CEO of Manulife, Dominic D’Alessandro oversees all aspects of the Company’s business from its global headquarters in Toronto, including investments, reinsurance, operations in Japan and Asia, and central corporate functions.
David D’Alessandro, who reports to Dominic D’Alessandro, chairs the committee overseeing integration of the two companies and leads its consolidated North American operations. The North American operations will encompass all insurance, annuity, group health, mutual fund, pension and 401(k) business lines in the United States and Canada. Maritime Life will be integrated into Canadian operations, as we have previously successfully integrated acquired businesses in our other transactions in the past.
Learn more about our Company Management.
What governance practices are in place to assure investors that their interests will be protected in the combined company going forward?
Manulife Financial’s vision is to be "the most professional life insurance company in the world" and this vision is consistent with the high regard of John Hancock and its global brand. Implicit in our shared vision is our commitment to strong governance procedures and balances to safeguard the interests of our stakeholders. This commitment is reflected in Manulife Financial’s annual high standing in independent corporate governance studies that have been published in Canada.
For more information, please refer to our Corporate Governance section.
What countries does Manulife now operate in?
Manulife Financial operates in 19 countries and territories worldwide — Canada, the United States, Japan, Hong Kong, China, Macau, Indonesia, Philippines, Singapore, Taiwan, Vietnam, Thailand, Malaysia, UK, Germany, Belgium, Australia, Barbados and Bermuda.
How does Manulife now rank by size?
By market capitalization, Manulife Financial is the largest life insurer, the second largest financial institution and second largest public company in Canada (as at March 11, 2004)2.
Manulife Financial is North America’s second largest life insurer by market capitalization (as at March 11, 2004)3 and fourth largest life insurer based on total assets (as at December 31, 2003)4.
The combination creates an exceptionally strong and diversified global market leader in life insurance with leading franchises in the U.S., Canada and Asia. It is the fifth largest life insurance company in the world based on market capitalization (as of March 11, 2004)5.
2 The Royal Bank is Canada’s largest financial institution and public company.
3 AIG is North America’s largest insurer by market capitalization.
4 AIG, MetLife and Prudential are North America’s first, second and third largest life insurers by assets.
5 AIG, ING, AXA and Assic Generali are the world’s largest life insurers by market capitalization, respectively.
What is the impact on Manulife’s size in Canada?
The new combined Canadian operation now has enhanced scale and a pre-eminent position in the Canadian marketplace. Combined, Manulife has one of the most extensive life-insurance based financial service operations in Canada, with a more diverse product line and broader, deeper distribution.
Manulife is the largest life insurer, second largest financial institution and second largest public company in Canada, based on market capitalization, as of March 31, 2004. It ranks number one or number two in Canada in virtually every product area.
How many jobs will be lost?
This is a complementary merger, not an overlapping one.
This merger is very much about growth, and for that we need talented, engaged people in every department. It is expected that the strong growth prospects of the combined company, as well as natural attrition, will ultimately minimize the number of job reductions. And to increase opportunities for the existing staff, the “controlled hiring policy” will remain in place throughout the integration process.
Where does Maritime Life fit into all of this? Will jobs be lost in Halifax as a result of the transaction?
We expect Maritime Life will be integrated successfully into our operations, as we have previously integrated acquired businesses in the past, and it will significantly add to our Canadian operations. Maritime Life has grown through acquisitions itself, contributed a great deal to John Hancock's earnings and has been recognized among Canada's Top-50 employers.
We are very aware of how important the company is to Halifax. It is our intent to maintain a significant presence in this great community and take advantage of the talented work force at Maritime Life.
Will you retain operations where they are now?
We are maintaining significant Canadian operations in Halifax, Montreal, Toronto, Kitchener-Waterloo and regional offices around the country. In addition, we are maintaining major presences in Boston, Hong Kong, Japan and Southeast Asia.
Where will the various Head Offices be located?
The head office of Manulife Financial is located in Toronto. The North American head office is located in Boston, the Canadian head office in Kitchener-Waterloo, and the Asian head office is located in Hong Kong.
BRANDING
What will be the name of the combined companies?
The legal name of Manulife Financial Corporation remains the same, as does the legal name of John Hancock Financial Services, Inc., which is now a wholly owned subsidiary of Manulife Financial.
Will Maritime Life be renamed?
Maritime Life will be integrated into Manulife’s Canadian operations, as we have previously successfully integrated acquired businesses in the past, and will significantly add to our Canadian operations. Maritime Life has grown through acquisitions itself, contributes a great deal to John Hancock's earnings and has been recognized among Canada's Top-50 employers.
Maritime Life products will be sold under the Manulife umbrella, and transition to the Manulife name. Our research has found that while Maritime unquestionably has developed a very good and positive brand in Canada, Manulife is either equally strong or stronger across the country. We feel that consumers are going to be very receptive to the transition from Maritime to Manulife. So, the brand will be enhanced in Canada by very skillfully and seamlessly integrating the Maritime name and products into Manulife’s.
What brand will be used to market the products?
Manulife Financial is the primary brand in Canada. The products and services of Maritime Life, John Hancock’s Canadian subsidiary, are marketed under the Manulife Financial brand name.
John Hancock will be the primary brand for retail and group products and services in the United States following full entity legal name changes expected in late 2004. Where appropriate, however, certain Manulife Financial products are being marketed in the U.S. under their own brand.
Why did you choose to embrace John Hancock’s brand?
The John Hancock brand is one of the strongest brand names in United States business. Consumer surveys have shown that the Hancock brand is among the best known and most highly regarded in life insurance, annuities and other financial products. Although the Manulife name is an excellent one, the reality is that in the United States the John Hancock brand is simply better known. In fact, the New York Times selected John Hancock as one of the most powerful brands in the 20th century.
Manulife wholesalers should find it easier to sell products here because the John Hancock brand is known, trusted and well-defined to consumers. However, among certain top producers and advisors in the high-end estate planning marketplace, Manulife enjoys a very powerful niche recognition. So certain niche products will continue to be branded ‘Manulife.’
CUSTOMER IMPACT
What will happen to my Manulife/John Hancock/Maritime Life insurance and/or long-term care insurance policies? Annuity contracts?
The completion of the merger has no impact on the benefits, premiums, values or guarantees of current policies or contracts issued by Maritime Life, John Hancock or Manulife. Any policy eligible to receive dividends prior to the merger is eligible for dividends today.
Some policies will change name (e.g. Maritime Life to Manulife). Customers will be notified.
Whom will I call with questions?
For the short term, customers should continue to contact us through their current customer service representatives or agents. Customers will be notified of changes to customer service operations that may result from the integration process.
COMMUNITY GIVING
What commitment are you willing to make about community giving?
Manulife has committed to maintaining the current level of charitable giving for both itself and its John Hancock subsidiary.
What community giving plans do you have in your business centres?
Manulife adheres to the principle of giving forward – giving proactively to groups that will make a positive difference for the future, tackling issues in preventative ways, addressing issues related to health education and community.
Manulife and Maritime will come together with a shared commitment to healthy futures. Maritime’s emphasis has been on education and health programs for young people, including the need to address the more than half of all Canadian children not meeting the minimum recommended exercise requirements, which costs the Canadian health-care system billions of dollars each year. Maritime’s Community Action Program has focused on promoting, educating, and involving Canadians in active living. Manulife also supports programs that encourage people to adopt healthy lifestyles, programs, often geared to an aging population. These efforts include cardiac and cancer prevention and rehabilitation initiatives at hospitals across Canada.
In Boston, both Manulife and John Hancock are already known for their support of children, education and non-profits. Manulife, for example, is partnered with the Edward Everett School and provides significant assistance for Horizons for Homeless Children. John Hancock is partnered with Boston English High School, Lucy Stone School and Samuel Mason Elementary School and is a strong sponsor of Boston’s AIDS Action Committee.
In Asia, where there is little operation overlap, Manulife will continue to partner with its communities. In Vietnam, for example, Manulife donates funds each year to provide reconstructive surgery to 200 impoverished children and young adults, while Manulife Vietnam employees volunteer to assist in this medical program called Operation Smile. In Singapore, and representatives help raise money for school children who need assistance for lunches and public transportation. In the Philippines, Manulife supports a program that provides jobs for the blind.
Learn more at the Corporate Giving section of our website.
The statements, analyses, and other information contained herein relating to the proposed merger and anticipated synergies, savings and financial and operating performance, including estimates for growth, trends in each of Manulife Financial Corporation’s and John Hancock Financial Services, Inc.’s operations and financial results, the markets for Manulife’s and John Hancock’s products, the future development of Manulife’s and John Hancock’s business, and the contingencies and uncertainties to which Manulife and John Hancock may be subject, as well as other statements including words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “will,” “should,” “may,” and other similar expressions, are “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Such statements are made based upon management’s current expectations and beliefs concerning future events and their potential effects on the companies.
Future events and their effects on Manulife and John Hancock may not be those anticipated by management. Actual results may differ materially from the results anticipated in these forward-looking statements. For a discussion of factors that could cause or contribute to such material differences, potential risks and uncertainties are discussed in Manulife’s most recent Annual Report on Form 40-F for the year ended December 31, 2003, John Hancock’s most recent Annual Report on Form 10-K for the year ended December 31, 2003 and John Hancock’s quarterly reports on Form 10-Q and other documents filed by Manulife and John Hancock with the Securities and Exchange Commission (“SEC”). These risks and uncertainties include, without limitation, the following: changes in general economic conditions; the performance of financial markets and interest rates; customer responsiveness to existing and new products and distribution channels; competitive and business factors; new tax or other government regulation; losses relating to our investment portfolio; volatility in net income due to regulatory changes in accounting rules, including changes to United States generally accepted accounting principles, Canadian generally accepted accounting principles and statutory accounting; the ability to achieve the cost savings and synergies contemplated by the proposed merger; the effect of regulatory conditions, if any, imposed by regulatory agencies; the reaction of John Hancock’s and Manulife’s customers and policyholders to the transaction; the ability to promptly and effectively integrate the businesses of John Hancock and Manulife; diversion of management time on merger-related issues; and increased exposure to exchange rate fluctuations.
The companies specifically disclaim any obligation to update or revise any forward looking information, whether as a result of new information, future developments or otherwise.
