DBRS Confirms Ratings on Manulife Financial Corporation and Affiliates

DBRS Limited (DBRS) has today confirmed its ratings on Manulife Financial Corporation (Manulife or the Company) and its affiliates including The Manufacturers Life Insurance Company, its primary operating company. All trends are Stable.

The ratings reflect the Company’s strong position in a number of geographic and product markets including Canada, the United States through the John Hancock brand and in the fast-growing Asian market through the Manulife brand. The Company is also well diversified by customer, distribution channel and product line. Risk management policies and procedures are thorough and supported with advanced modelling techniques. The Company’s general account has a diversified high-quality asset portfolio. Legacy issues associated with the Company’s prior product designs continue to be a potential source of adverse reserve development, given the uncertainty in macroeconomic and regulatory environments and potential adverse policyholder behaviour. DBRS regards the Company’s reduction of market-related risks over the past few years as having been critical to maintaining its high rating. DBRS also notes that, under its methodology, with Manulife’s unexceptional financial risk metrics, it is the Company’s franchise strength and business which provide most of the rating strength.

The Company has set out a strategy to build more interactions directly with the end purchaser to augment and enhance its existing distribution channels. Manulife is in the process of implementing this strategy, which entails a significant investment in technology and new processes as well as an accompanying cultural shift. This change presents both new opportunities and risks for the organization.

Notes:
The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link to the right under Related Research or by contacting us at info@dbrs.com.

The applicable methodologies are Rating Companies in the Canadian Life and Health Insurance Industry (January 2015), Rating Holding Companies and Their Subsidiaries (January 2015), Preferred Share and Hybrid Criteria for Corporate Issuers (January 2015) and DBRS Criteria: Commercial Paper Liquidity Support for Non-Bank Issuers (April 2015), which can be found on our website under Methodologies.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

The Fixed/Floating Senior Debentures and Fixed/Floating Subordinated Debentures of Manulife Finance (Delaware), L.P. and the Senior Unsecured Notes of Manulife Finance Holdings Limited are guaranteed by Manulife Financial Corporation.