Delivering Results Preparing for the Future Annual Meeting Thursday May 5, 2016
In Memory of Syd Jackson President: 1972-1985 CEO: 1985-1987 Chairman: 1978-1990 Vice Chairman: 1990-1994 2
3 Recognizing Employees
Annual Meeting Calling the Meeting to Order 4
Caution Regarding Forward-Looking Statements This presentation consists of these slides and the associated remarks and comments, which are related and intended to be presented and understood together. This presentation contains forward-looking statements which are made pursuant to the safe harbour provisions of Canadian provincial securities laws and the U.S. Private Securities Litigation Reform Act of 1995. The forward-looking statements in this presentation include, but are not limited to, statements with respect to our 2016 management objective for core earnings, Core ROE expansion over the medium term and the drivers of such expansion, annual core earnings per share growth over the medium term and dividend growth over time, and estimated net pre-tax savings in 2016 from our E&E initiative. The forward-looking statements in this presentation also relate to, among other things, our objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates, and include statements concerning possible or assumed future results. Although we believe that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements and they should not be interpreted as confirming market or analysts expectations in any way. Certain material factors or assumptions are applied in making forward-looking statements, including in the case of our 2016 management objective for core earnings, the assumptions described under Key Planning Assumptions and Uncertainties in our 2015 Annual Report and actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from expectations include the factors identified in the Caution regarding forward-looking statements in our 2015 Annual Report. Additional information about material risk factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in this presentation as well as under Risk Factors in our most recent Annual Information Form, under Risk Management, Risk Factors and Critical Accounting and Actuarial Policies in the Management s Discussion and Analysis in our most recent annual report, in the Risk Management note to consolidated financial statements in our most recent annual and interim reports and elsewhere in our filings with Canadian and U.S. securities regulators. The forward-looking statements in this presentation are, unless otherwise indicated, stated as of the date hereof and presented for the purpose of assisting investors and others in understanding our financial position and results of operations as well as our objectives and strategic priorities, and may not be appropriate for other purposes. We do not undertake to update any forward-looking statements except as required by law. 5
Manulife Financial Corporation The Manufacturers Life Insurance Company Notice of Meeting Confirmation of Quorum Voting Instructions 6
Manulife Financial Corporation Election of Directors Joseph P. Caron John M. Cassaday Susan F. Dabarno Richard B. DeWolfe Sheila S. Fraser Donald A. Guloien Luther S. Helms Tsun-yan Hsieh P. Thomas Jenkins Pamela O. Kimmet Donald R. Lindsay John R.V. Palmer C. James Prieur Andrea S. Rosen Lesley D. Webster 7
The Manufacturers Life Insurance Company Election of Directors Policyholders Directors: Joseph P. Caron John M. Cassaday Susan F. Dabarno Richard B. DeWolfe Luther S. Helms Shareholder s Directors: Sheila S. Fraser Donald A. Guloien Tsun-yan Hsieh P. Thomas Jenkins Pamela O. Kimmet Donald R. Lindsay John R.V. Palmer C. James Prieur Andrea S. Rosen Lesley D. Webster 8
Manulife Financial Corporation The Manufacturers Life Insurance Company Appointment of Auditors Ernst & Young LLP, Chartered Accountants 9
Manulife Financial Corporation Advisory Resolution Accepting Approach to Executive Compensation Resolved, on an advisory basis and not to diminish the role and responsibilities of the board of directors, that the shareholders accept the approach to executive compensation disclosed in the management information circular delivered in advance of the 2016 annual meeting of common shareholders of Manulife Financial Corporation. 10
Manulife Financial Corporation The Manufacturers Life Insurance Company 2015 Consolidated Financial Statements and Reports of Manulife Financial Corporation 2015 Consolidated Financial Statements and Reports and Information for Participating Policyholders of The Manufacturers Life Insurance Company 11
2016 Annual Meeting Stephen B. Roder Senior Executive Vice President & Chief Financial Officer
Strong top line growth Wealth & Asset Management Gross Flows (C$ billions) +24% +46% +89% Insurance Sales (C$ billions) 2.5 22% 23% 55% 2014 3.4 19% 24% 57% 2015 69.2 12% 60% 15% 13% 2014 114.7 19% 53% 14% 14% 2015 Other Wealth Sales (C$ billions) 3.9 53% 47% 2014 7.5 48% 52% 2015 U.S. Canada Asia Institutional See End notes on page 53 for a description of each of the three top line metrics shown above. 13
which helped drive new business value and embedded value higher New Business Value (NBV) (C$ billions) Embedded Value (EV) (C$ billions) +37% +21% 697 17% 955 8% 20% 39.4 47.8 25% 72% 58% 2014 2015 Dec. 31, 2014 Dec. 31, 2015 U.S. Canada Asia 14
Increasing efficiency General expenses as % of assets under management and administration (AUMA) (%; based on C$ reporting) 1.0 General expenses as % of premiums and deposits (P&D) (%, based on C$ reporting) 8 0.81% 0.81% 0.83% 0.77% 0.69% 0.67% 6 5.9% 6.1% 5.8% 5.2% 4.9% 4.1% 0.5 Launch of E&E Initiative 4 Launch of E&E Initiative 2 0.0 2010 2011 2012 2013 2014 2015 0 2010 2011 2012 2013 2014 2015 Note: All amounts are pre-tax. E&E stands for Efficiency & Effectiveness. 15
Strong core earnings growth in 2015 Net income was impacted by the decline in oil and gas prices Core earnings (C$ billions) Net income attributed to shareholders (C$ billions) +19% -37% 3.4 3.5 2.9 2.2 2014 2015 2014 2015 16
Executing on a strategy that is expected to lead to sustainable Core ROE expansion For illustrative purposes only. Relative proportions Not to scale. Core Return on Equity (ROE) expansion over the medium term 1 13%+ Impact of normalized investment gains Reported Core ROE 10.3% Other areas of continuing focus Generation of free cash flow for profitable redeployment Balance sheet optimization Critical appraisal of our in force blocks Macro factors outside management s control Interest rates Equity markets performance Oil and gas prices Foreign exchange rates 2015 Core ROE 1 See End notes on page 53. Organic Growth Contributions from Transactions E&E Initiative Medium Term 17
Maintaining a high degree of financial flexibility Regulatory capital ratio 1 for MLI (%) 211 248 248 223 Financial leverage ratio (%) 32.7 31.0 27.8 23.8 2012 2013 2014 2015 2012 2013 2014 2015 Note MLI refers to The Manufacturers Life Insurance Company. 1 See End notes on page 53. 18
Core earnings growth trajectory facilitating sustainable dividend increases Quarterly dividend (Cents per common shares; As of declaration date) +42% 15.5 /sh 17.0 /sh 18.5 /sh Three dividend increases in less than two years 13.0 /sh Target dividend payout ratio range of 30-40% Dividend increases expected over time as earnings grow 1 Expected average annual Core EPS growth of 10-12% over the medium term May 2014 Aug. 2014 Nov. 2014 Feb. 2015 May 2015 Aug. 2015 Nov. 2015 Feb. 2016 1 See End notes on page 53. 19
1Q16 financial highlights Strong operating performance from our operations around the world: Insurance sales up 14% 1 vs. 1Q15 New business value up 70% vs. 1Q15 Wealth and asset management net flows of $1.7 billion, and gross flows up 15% vs. 1Q15 Core earnings of $905 million, up 14% vs. 1Q15 Net income attributed to shareholders of $1,045 million Strong regulatory capital ratio 2 of 233 % for MLI Note MLI refers to The Manufacturers Life Insurance Company. 1,2 See End notes on page 53. 20
Summary Generating strong top line growth and new business value growth Growing more efficiently with our E&E Initiative Delivering strong underlying core earnings growth Executing on a strategy that is expected to expand Core ROE Maintaining a high degree of financial flexibility Focusing on regular and sustainable dividend increases as earnings grow Off to a strong start in 2016 and well-positioned to continue to deliver sustainable growth moving forward 21
Preparing for the Future Donald A. Guloien President & CEO Manulife
Net income trajectory Net income attributed to shareholders (C$ millions) 3,130 3,501 1,810 2,191 129 (1,663) 2010 2011 2012 2013 2014 2015 23
Net income trajectory Net income attributed to shareholders (C$ millions) 3,130 3,501 1,810 2,191 129 (1,663) 2010 2011 2012 2013 2014 2015 24
Core earnings growth Core earnings (C$ millions) 3,428 2,169 2,249 2,617 2,888 2011 2012 2013 2014 2015 25
Delivering outstanding growth 34,000 employees 61,000 agents 26
Delivering outstanding growth $24.6B paid to customers $935B assets under management and administration 27
Delivering outstanding growth +46% gross flows $34.4B net flows 28
Delivering outstanding growth +24% insurance sales +37% new business value 29
Delivering outstanding growth $47.8B embedded value $24 per share 30
Growing our highest ROE businesses Asia Wealth and Asset Management 31
Our strategy 1 2 3 Develop more holistic and long-lasting customer relationships Build and integrate our global wealth and asset management businesses Leverage skills and experiences across our international operations 32
Redesigning our products around our customers - Pakho Chau - Cantopop Musician 33
Investing to innovate our customer offering 28 days to 24 hours 34
35 Marking a milestone in China
36 Embracing innovation
37 and new technology
38 Growing new distribution channels
Recent acquisitions and strategic partnerships Exclusive regional distribution agreement with DBS covering four markets in Asia Acquisition of New York Life s Retirement Plan Services business Acquisition of Canadian-based operations of Standard Life Acquisition of Standard Chartered s existing pension businesses in Hong Kong and exclusive Mandatory Provident Fund distribution partnership Announced: September 10, 2015 1 1 See End notes on page 53. 39
40 Strong Japan growth despite challenging economy
Our strategy 2 1 3 Develop more holistic and long-lasting customer relationships Build and integrate our global wealth and asset management businesses Leverage skills and experiences across our international operations 41
Our strategy 3 1 2 Develop more holistic and long-lasting customer relationships Build and integrate our global wealth and asset management businesses Leverage skills and experiences across our international operations 42
43 Awards and recognition
44 Awards and recognition
45 Remembering Syd Jackson
Thank you We operate as John Hancock in the United States and Manulife in other parts of the world. 46
Manulife Financial Corporation The Manufacturers Life Insurance Company Voting Results 47
Manulife Financial Corporation The Manufacturers Life Insurance Company Conclusion of Business 48
Manulife Financial Corporation The Manufacturers Life Insurance Company Question & Answer Period 49
Thank you We operate as John Hancock in the United States and Manulife in other parts of the world. 50
Delivering Results Preparing for the Future Annual Meeting Thursday May 5, 2016
Note to users - Performance and Non-GAAP Measures We use a number of non-gaap financial measures to measure overall performance and to assess each of our businesses. A financial measure is considered a non-gaap measure for Canadian securities law purposes if it is presented other than in accordance with generally accepted accounting principles used for the Company s audited financial statements. Non-GAAP measures referenced in this presentation include: Core Earnings; Core ROE, Diluted Core Earnings Per Share; Constant Currency Basis; Premiums and Deposits (P&D); Assets under Management and Administration; Net Flows; Gross Flows; New Business Value; and Sales. Non-GAAP financial measures are not defined terms under GAAP and, therefore, are unlikely to be comparable to similar terms used by other issuers. Therefore, they should not be considered in isolation or as a substitute for any other financial information prepared in accordance with GAAP. For more information on non-gaap financial measures, including those referred to above, see Performance and Non-GAAP Measures in our 2015 Management s Discussion and Analysis. 52
End notes Slide 13: 1 Insurance sales consists of all individual and group insurance businesses. Wealth and Asset Management gross flows consist of mutual fund, group retirement and institutional advisory products. Other Wealth sales include all new deposits into variable and fixed annuity contracts in Asia and Canada, as well as certain single premium products in Asia. As we discontinued sales of new variable annuity contracts in the U.S. in 1Q13, subsequent deposits into existing U.S. variable annuity contracts are not reported as Other Wealth sales. Slide 17: 1 Assumes common share dividend payout ratio of 35%, i.e. mid-point of the 30-40% target dividend payout ratio range communicated at Investor Day 2015. Dividend levels are set by the Board of Directors. Slide 18: 1 Refers to the Minimum Continuing Capital and Surplus Requirements (MCCSR) ratio for The Manufacturers Life Insurance Company (MLI). Slide 19: 1 Dividend levels are set by the Board of Directors. Slide 20: 1 Growth (decline) in sales and gross flows stated on a constant currency basis. 2 Refers to the Minimum Continuing Capital and Surplus Requirements (MCCSR) of The Manufacturers Life Insurance Company (MLI). Slide 39: 1 The transaction is anticipated to close in the second half of 2016, subject to the receipt of all necessary approvals and other customary closing conditions. 53