QUOTE AND NEWS
Forbes  Feb 13  Comment 
The company’s core earnings also dropped by nearly 6% y-o-y to C$713 million in the fourth quarter. Although the company benefited from an increase in business volume, unfavorable policyholder experience in North America and other expenses more...
Wall Street Journal  Feb 12  Comment 
Insurance giant Manulife Financial Corp. cautioned Thursday that lower interest rates and the recent slide in oil prices could weigh on its financial results in 2015.
Market Intelligence Center  Feb 6  Comment 
MarketIntelligenceCenter.com's option-trade picking algorithms have identified an attractive covered-call trade on Manulife Financial Corp (MFC). Look at the Sep. '15 $17.00 covered call for a net debit in the $16.11 area. This trade has a...
The Hindu Business Line  Jan 30  Comment 
Retreat to cash makes this expectation realistic




 

Manulife Financial Corporation (NYSE: MFC) is a broad-based financial services firm headquartered in Toronto, Canada. The company provides a wide range of financial products and services, including life insurance, group life and health insurance, pension products, annuities, and mutual funds to individual and group customers in the US, Canada, Asia, and Japan. The company operates as Manulife Financial in Canada and Asia, and primarily through John Hancock (which merged with Manulife in April 2004) in the United States. As an insurance provider, MFC will seek to profit from increasing insurance demand due to the aging "baby boomer" population. In addition, the firm's large portfolio of assets make it at risk to fluctuating interest rates.

Business Overview

In the past fiscal year, Manulife incurred declining revenue and a loss in net income.[1] For the current fiscal year, Manulife's presence in Japan may affect the firm's annual net income, as the March tsunami has caused a spike in insurance claims.[2]

Trends and Forces

Aging US Population Causes Shift in Insurance Demand

The "baby boomer" generation is heading towards retirement, which is expected to create robust demand for various insurance and wealth accumulation products. Increased longevity means that that this group will need to generate enough wealth to last decades into retirement. As a top insurance company with strong brand recognition and a diversified portfolio of products, MFC is very well positioned to take advantage of this demographic shift.

Changing Interest Rates cause Risk in MFC's Portfolio.

Interest rates will affect any firm involved in any type of investment or firm that issues corporate debt or equity. Changes in the interest rate will invariably change the fundamental values of both equity and debt, since the fundamental value of debt is determined by the time weighted average of payments discounted by current short or long interest rates, and the fundamental value of equity is determined by the value of a firm today along with any projects in the future discounted by some factor over the risk free interest rate. Manulife's large assets makes it particularly effected by the interest rate.

Competition

References

  1. MFC 2010 Annual Report
  2. Seeking Alpha, "Tsunami Raises Alarms at Manulife," 03/15/2011
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