Manulife Financial Corp.

I N S T I T U T I O N A L E Q U I T Y R E S E A R C H Robert Sedran, CFA 1 (416) 594-7874 Robert.Sedran@cibc.com Koki Akala, CFA 1 (416) 956-3723 Koki.Akala@cibc.com Maurissa Bell, CPA, CA 1 (416) 594-7283 Maurissa.Bell@cibc.com Canadian Insurance Manulife Financial Corp. Q3/15 First Look -- Securities Losses Behind The Miss Manulife Financial (MFC-SO) reported Q3/15 headline EPS of $0.30, below our estimate of $0.41. The variance was largely owing to the annual assumption review, which resulted in a net charge of $285 million after-tax primarily relating to the lapse reserve (that was $0.14 per share, we had not included a guess on that one). On a core basis, EPS was $0.43, below our estimate of $0.46 and consensus of $0.45. Book value ended the quarter at $18.98, up from $17.89 last quarter. The MCCSR ratio moved down to 226% from 236% owing to debt maturities. Core ROE was 9.2%. Sector Weighting: Ticker: Stock Rating: I N T R A D A Y N O T E November 12, 2015 M A R K E T W E I G H T MFC-TSX Sector Outperformer Price (11/12/15): $22.16 On a Sources of Earnings basis, variances to our core estimate were positive on expected profit and strain, both with a variance of $0.04/share. This quarter also saw $51 million of investment-related experience charges included in core earnings (which was just to reverse the gain included in core last quarter, the company actually had $220 million in investment-related negative experience that was mainly treated as non core and was mainly owing to its energy exposure). In terms of the segments, earnings increased in both the Asia and Canadian operating divisions sequentially and Y/Y. Asia was up 19% Q/Q and up 30% Y/Y, while the Canadian division was up 11% Q/Q and up 39% Y/Y. The U.S. division was down 2% Q/Q but up 15% Y/Y. Sales were mixed on a sequential basis, though generally up Y/Y. Asia insurance sales were up 8% Q/Q and 30% Y/Y, while Asia total wealth gross flows were down 51% Q/Q, though up 22% over the same period a year ago. In Canada, insurance sales were down 15% Q/Q, and down 1% Y/Y, while total wealth sales increased 3% Q/Q and 92% Y/Y. In the U.S., insurance sales were up 15% Q/Q and 22% Y/Y, while total wealth sales were up 25% Q/Q and 87% Y/Y. Overall, when investment-related experience is poor (especially when it was not an unexpected potential source of stress) and remaining trends show better, the reaction to the quarter should focus less on the earnings miss and more on the underlying trends. Asia showed well (and so did Canada, for that matter), sales were good and higher quality sources of earnings lines were also positive variances. We think those items are the more important takeaways. We will be publishing more details following the conference call (2:00 p.m, 1-800-769-8320). All figures in Canadian dollars, unless otherwise stated. 15-139129 2015 CIBC World Markets Corp., the U.S. broker-dealer, and CIBC World Markets Inc., the Canadian broker-dealer (collectively, CIBC World Markets Corp./Inc.) do and seek to do business with companies covered in its research reports. As a result, investors should be aware that CIBC World Markets Corp./Inc. may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For required regulatory disclosures please refer to "Important Disclosures" beginning on page 3. Find CIBC research on Bloomberg, Reuters, firstcall.com CIBC World Markets Inc., P.O. Box 500, 161 Bay Street, Brookfield Place, Toronto, Canada M5J 2S8 (416) 594-7000 and ResearchCentral.cibcwm.com CIBC World Markets Corp., 425 Lexington Avenue, New York, NY 10017 (212)-856-4000

Exhibit 1. MFC Source Of Earnings Review Q3-15 Source of Earnings ($million) Q3-14 Q4-14 Q1-15 Q2-15 Reported CIBC Est. Variance Expected Profit on In-Force Business 943 981 1,038 1,137 1,190 1,090 100 Impact of New Business (60) (42) (75) (40) 33 (76) 109 Experience Gains 565 (102) (61) (628) 255 (45) 300 Assumption Changes & Mgmt Actions (96) (323) (148) (161) (495) (35) (460) Earnings on Operations 1,352 514 754 308 983 935 48 Earnings on Surplus Funds 97 111 103 162 (17) 88 (105) Other (62) 32 (18) 102 (28) 45 (73) Income Before Taxes 1,387 657 839 572 938 1,067 (129) Income Taxes (287) (17) (116) 28 (316) (213) (103) Shareholder s Net Income 1,100 640 723 600 622 854 (232) Preferred Shares Dividends (28) (28) (29) (29) (29) (29) 0 Common Shareholders Net Income 1,072 612 694 571 593 825 (232) Other (345) 73 74 302 248 100 148 Core Net Income 727 685 768 873 841 925 (84) Est. Weighted Avg. Shares Outstanding 1,883 1,887 1,959 1,992 1,977 1,992 (15) Quarterly EPS $0.39 $0.36 $0.39 $0.44 $0.43 $0.46 ($0.04) Source: Company reports and CIBC World Markets Inc. Exhibit 2. Core Earnings By Segment Change C$million Q3-15 Q2-15 Q1-15 Q4-14 Q3-14 Q/Q Y/Y Asia 356 300 296 260 273 19% 30% Canadian 338 304 262 224 243 11% 39% U.S. 393 402 392 338 342 (2% ) 15% Corporate & Other (excl. macro hedge expected) (104) (109) (109) (112) (107) (5% ) (3% ) Macro Hedge Expected (62) (46) (44) (47) (46) 35% 35% Investment related experience in core earnings (51) 51 0 50 50 nmf (202% ) Total Core Earnings 870 902 797 713 755 (4% ) 15% Less: Preferred Share Dividends (29) (29) (29) (28) (28) nmf nmf Core Net Income to Shareholders 841 873 768 685 727 (4% ) 16% Core EPS $0.43 $0.44 $0.39 $0.37 $0.39 (3% ) 10% Source: Company reports and CIBC World Markets Inc. Exhibit 3. Sales By Geography C$million Q3-15 Q2-15 Q1-15 Q4-14 Q3-14 Q/Q Y/Y U.S. Insurance 165 144 146 175 135 14.6% 22.2% Canada 142 166 214 172 143 (14.5% ) (0.7% ) Asia 496 461 419 413 382 7.6% 29.8% Total Insurance Sales 803 771 779 760 660 4.2% 21.7% U.S. Wealth Management 17,036 13,642 12,059 10,100 9,133 24.9% 86.5% Canada 4,994 4,846 5,443 3,234 2,605 3.1% 91.7% Asia 3,512 7,190 4,084 3,384 2,872 (51.2% ) 22.3% Investments (Corporate and Other) 2,165 10,987 3,024 2,276 962 (80.3% ) 125.1% Total Consolidated Wealth Gross Flows (1) 27,707 36,665 24,610 18,994 15,572 (24.4%) 77.9% 1) Consolidated Wealth sales includes both Wealth and Asset Management and Other Wealth. Source: Company reports and CIBC World Markets Inc. 2

IMPORTANT DISCLOSURES: Analyst Certification: Each CIBC World Markets Corp./Inc. research analyst named on the front page of this research report, or at the beginning of any subsection hereof, hereby certifies that (i) the recommendations and opinions expressed herein accurately reflect such research analyst's personal views about the company and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report. Analysts employed outside the U.S. are not registered as research analysts with FINRA. These analysts may not be associated persons of CIBC World Markets Corp. and therefore may not be subject to FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account. Potential Conflicts of Interest: Equity research analysts employed by CIBC World Markets Corp./Inc. are compensated from revenues generated by various CIBC World Markets Corp./Inc. businesses, including the CIBC World Markets Investment Banking Department. Research analysts do not receive compensation based upon revenues from specific investment banking transactions. CIBC World Markets Corp./Inc. generally prohibits any research analyst and any member of his or her household from executing trades in the securities of a company that such research analyst covers. Additionally, CIBC World Markets Corp./Inc. generally prohibits any research analyst from serving as an officer, director or advisory board member of a company that such analyst covers. In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report, CIBC World Markets Corp./Inc. may have a long position of less than 1% or a short position or deal as principal in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon. Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures set forth below, may at times give rise to potential conflicts of interest. Important Disclosure Footnotes for Manulife Financial Corp. (MFC) Manulife Financial Corp. is a client for which a CIBC World Markets company has performed investment banking services in the past 12 months. CIBC World Markets Inc. has managed or co-managed a public offering of securities for Manulife Financial Corp. in the past 12 months. CIBC World Markets Inc. has received compensation for investment banking services from Manulife Financial Corp. in the past 12 months. CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services from Manulife Financial Corp. in the next 3 months. CIBC World Markets Corp., CIBC World Markets Inc., and their affiliates, in the aggregate, beneficially own 1% or more of a class of equity securities issued by Manulife Financial Corp. 3

CIBC World Markets Corp./Inc. Stock Rating System Abbreviation Rating Description Stock Ratings SO Sector Outperformer Stock is expected to outperform the sector during the next 12-18 months. SP Sector Performer Stock is expected to perform in line with the sector during the next 12-18 months. SU Sector Underperformer Stock is expected to underperform the sector during the next 12-18 months. NR Not Rated CIBC World Markets does not maintain an investment recommendation on the stock. R Restricted CIBC World Markets is restricted (due to potential conflict of interest) from rating the stock. Sector Weightings (note: Broader market averages refer to S&P 500 in the U.S. and S&P/TSX Composite in Canada.) O Overweight Sector is expected to outperform the broader market averages. M Market Weight Sector is expected to equal the performance of the broader market averages. U Underweight Sector is expected to underperform the broader market averages. NA None Sector rating is not applicable. "Speculative" indicates that an investment in this security involves a high amount of risk due to volatility and/or liquidity issues. Ratings Distribution*: CIBC World Markets Corp./Inc. Coverage Universe (as of 12 Nov 2015) Count Percent Inv. Banking Relationships Count Percent Sector Outperformer (Buy) 151 42.2% Sector Outperformer (Buy) 146 96.7% Sector Performer (Hold/Neutral) 162 45.3% Sector Performer (Hold/Neutral) 155 95.7% Sector Underperformer (Sell) 37 10.3% Sector Underperformer (Sell) 32 86.5% Restricted 7 2.0% Restricted 7 100.0% Ratings Distribution: Canadian Insurance Coverage Universe (as of 12 Nov 2015) Count Percent Inv. Banking Relationships Count Percent Sector Outperformer (Buy) 1 25.0% Sector Outperformer (Buy) 1 100.0% Sector Performer (Hold/Neutral) 2 50.0% Sector Performer (Hold/Neutral) 2 100.0% Sector Underperformer (Sell) 1 25.0% Sector Underperformer (Sell) 0 0.0% Restricted 0 0.0% Restricted 0 0.0% Canadian Insurance Sector includes the following tickers: GWO, IAG, MFC, SLF. *Although the investment recommendations within the three-tiered, relative stock rating system utilized by CIBC World Markets Corp./Inc.do not correlate to buy, hold and sell recommendations, for the purposes of complying with FINRA rules, CIBC World Markets Corp./Inc. has assigned buy ratings to securities rated Sector Outperformer, hold ratings to securities rated Sector Performer, and sell ratings to securities rated Sector Underperformer without taking into consideration the analyst's sector weighting. The distributions above reflect the combined historical ratings of CIBC World Markets Corp. and CIBC World Markets Inc. Important disclosures required by applicable rules can be obtained by visiting CIBC World Markets on the web at http://researchcentral.cibcwm.com. Important disclosures for each issuer can be found using the "Coverage" tab on the top left of the Research Central home page. Access to the system for rating investment opportunities and our dissemination policy can be found at the bottom of each page on the Research Central website. These important disclosures can also be obtained by writing to CIBC World Markets Corp., 425 Lexington Avenue, New York, NY 10017 (212-856-4000) or CIBC World Markets Inc.,161 Bay Street, 4th Floor, Toronto, ON M5H 2S8, Attention: Research Disclosures Request. 4

CIBC World Markets Corp./Inc. Price Chart HISTORICAL PERFORMANCE OF CIBC WORLD MARKETS CORP./INC. RECOMMENDATIONS FOR MANULIFE FINANCIAL CORP. (MFC) Date Change Type Closing Price Rating Price Target Coverage 01/14/2013 14.32 SP 15.00 Robert Sedran, CFA 02/07/2013 14.55 SO 16.00 Robert Sedran, CFA 05/03/2013 15.61 SO 17.00 Robert Sedran, CFA 07/02/2013 16.98 SO 19.00 Robert Sedran, CFA 08/09/2013 17.73 SO 20.00 Robert Sedran, CFA 11/08/2013 19.72 SO 22.00 Robert Sedran, CFA 01/27/2014 20.56 SO 24.00 Robert Sedran, CFA 09/04/2014 22.05 R - Robert Sedran, CFA 09/15/2014 22.04 SO 24.00 Robert Sedran, CFA 01/07/2015 21.26 SO 25.00 Robert Sedran, CFA 01/29/2015 20.57 SO 24.00 Robert Sedran, CFA 04/21/2015 22.07 SO 25.00 Robert Sedran, CFA 05/08/2015 22.98 SO 26.00 Robert Sedran, CFA 10/28/2015 22.57 SO 25.00 Robert Sedran, CFA The chart above reflects the combined historical recommendations of CIBC World Markets Corp. and CIBC World Markets Inc. 5

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