Manulife Financial Corporation reports quarterly results



    
    Equity market declines continue to detract from core business results

    TSX/NYSE/PSE: MFC; SEHK: 0945
    

    TORONTO, May 7 /CNW/ - Manulife Financial Corporation ("MFC") today
reported a shareholders' net loss of $1,068 million for the first quarter
ended March 31, 2009, compared to net income of $869 million in the first
quarter of 2008. Fully diluted loss per share was $0.67 compared to earnings
per share of $0.57 in 2008. The Manufacturers Life Insurance Company ("MLI")
reported an MCCSR ratio of 228 per cent as at March 31, 2009, up from 198 per
cent last year.
    "This was obviously a difficult quarter, reflecting the impact of the
global economy on equity markets, other asset values and sales," said Donald
A. Guloien, Manulife's incoming President and Chief Executive Officer. "Our
global franchises remain strong, our capital position is near the high end of
its historical range, and we enjoy high credit ratings."
    "In the past six months, Manulife has proven it can successfully access
the capital markets through common equity and preferred share issuance, bank
loans and public debt," said Mr. Guloien. "We have earned the right to these
alternatives as a result of our enviable financial condition and strong
ratings. But as we look forward, knowing that there is risk of further turmoil
in capital markets, our focus is going to be on balancing our business mix,
reducing risk, and strengthening our capital levels."
    The quarter's net loss was primarily driven by continued declines across
all equity markets, particularly in the U.S. Reserve strengthening for
segregated fund guarantees resulted in an accounting charge of $1,146 million
and credit impairments were $121 million. Also affecting earnings this quarter
were fair value adjustments of $277 million primarily for declines in
commercial real estate values, $255 million of equity related charges and $72
million related to credit downgrades. Earnings for the quarter, excluding
these items, totaled $803 million and cash provided by operating activities of
$2.5 billion reflected the non-cash nature of these charges.
    "Actuarial practices require us to value our assets and liabilities at
the quarter end mark, despite the very long-term nature of these holdings and
obligations. Given the current environment, this creates significant
volatility in our reported results which detracts from our strong core
business results," noted Peter Rubenovitch, Senior Executive Vice President
and Chief Financial Officer. "Despite these non-cash charges, our investment
portfolio remains well positioned for this challenging credit cycle and our
capital levels remain above our targeted levels."
    In light of continued equity market volatility and sensitivity, the
Company conducted a strategic review of its segregated fund product portfolio
and started implementing changes to its product offerings in the quarter. In
the U.S., fees were increased, deferral bonuses were reduced, additional
features were withdrawn, and equity exposure was reduced in several key funds.
In Canada, the hedging program for new segregated fund business was
successfully implemented at the end of March, and $1.5 billion of in-force
business was hedged. New business in North America is now hedged on an ongoing
basis.
    "Going forward, the Company will focus on rebalancing its product
portfolio to diversify its sources of income and its risk positions. One of my
first initiatives in my new capacity will be an analysis of growth
opportunities for our Company," said John DesPrez, newly appointed Chief
Operating Officer.
    Premiums and deposits were $19.3 billion in the quarter, a decrease of 16
per cent on a constant currency basis. Increased premiums arising from higher
sales of fixed wealth products and in-force insurance business growth were
more than offset by the decline in variable wealth product deposits in light
of continued market volatility.
    Total funds under management as at March 31, 2009 were $405.3 billion, an
increase of one per cent over the prior year. The increases from currency
movements of $57.4 billion and net policyholder cash flows of $21.8 billion
were offset by market value declines.

    
    OPERATING HIGHLIGHTS

    Corporate

    -   During the quarter, the Company issued $450 million of new Series 4
        non-cumulative 5-year rate reset preferred shares with a 6.6 per cent
        fixed yield for the initial 5-year period. The 5-year resets are
        equal to 5-year Government of Canada bonds plus 4.56 per cent or
        convertible to Series 5 floating rate preferred shares, which are
        entitled to non-cumulative quarterly floating dividends based on
        3-month Government of Canada treasury bills plus 4.56 per cent.

    -   In a separate news release, the Company also announced today that the
        Board of Directors approved a quarterly shareholders' dividend of
        $0.26 per share on the common shares of the Company, payable on and
        after June 19, 2009 to shareholders of record at the close of
        business on May 20, 2009.

    -   The Company enhanced its Canadian Dividend Reinvestment and Share
        Purchase Plan and also implemented a new U.S. Plan. The Plans allow
        the Company to issue the shares on the open market or from treasury,
        and to offer a discount from the average market price for shares
        issued from treasury.

    Insurance

    -   Insurance sales for the quarter were down 11 per cent from prior year
        levels, reflecting the industry wide impact of unsettled markets, as
        growth in Japan and Canada Group Benefits was more than offset by
        declines in the U.S.

    -   In the U.S., John Hancock ranked No. 1 in individual insurance sales
        over the last three years and ranked No. 1 in long-term care sales
        for the second consecutive year in 2008. Consistent with industry
        trends, life sales were down 43 per cent in the quarter while long-
        term care sales declined by 22 per cent. Lower universal life and
        retail long term-care sales were a result of consumers delaying
        financial planning decisions in light of the economic downturn, but
        overall premiums were consistent with prior year levels reflecting
        in-force business growth.

    -   In Canada, overall growth resulted from group benefits sales
        increasing 27 per cent, which more than offset a seven per cent
        decline in individual life sales versus prior year levels. Group
        sales were primarily driven by growth in large case accounts while
        expanded distribution initiatives also resulted in growth in small
        case sales.

    -   In Asia, overall sales were 14 per cent higher than in 2008 as strong
        sales growth in Japan and other Asia territories more than offset
        lower sales in Hong Kong. Japan sales in the quarter were 45 per cent
        higher than in the prior year, driven by the continued success of its
        new insurance offerings. China, Indonesia and Singapore contributed
        to sales growth of seven per cent resulting from a growing
        distribution platform in China, a shift from wealth to insurance
        products in Indonesia and new product offerings in Singapore.

    Wealth Management

    -   Wealth sales for the quarter were down 17 per cent from prior year
        levels, as strong growth in fixed products in the U.S. and Canada was
        more than offset by declines in variable products across all
        geographies.

    -   In the U.S., Fixed Products sales increased by 91 per cent over first
        quarter 2008 levels, as equity market volatility and credit concerns
        prompted investors to exit equity markets and seek fixed return
        products from top rated firms. These increases were more than offset
        by decreased volumes in Wealth Asset Management and Variable
        Annuities. Consistent with overall industry trends, decreases were
        driven by continued volatile equity markets and economic uncertainty.

    -   In Canada, individual wealth sales were up 20 per cent from prior
        year levels, as increases in fixed product sales more than offset
        declines in both segregated fund and mutual fund sales. Group sales
        increased by over 300 per cent due to higher volumes of large case
        defined contribution and ESOP sales. Bank loan volumes also rose and
        were seven per cent higher than in the first quarter of 2008, driven
        by increased distribution and increased activity from Manulife
        Securities advisors.

    -   In Asia, overall sales were 27 per cent lower than in 2008 as lower
        volumes in Hong Kong and Japan more than offset increases in the
        other Asia territories. Despite the continued market turmoil, product
        innovation and distribution expansion initiatives continue, and a new
        fund was launched in Indonesia as well as additional products being
        sold through partner banks in Japan.

    Awards & Recognition

    Manulife Financial received recognition from several organizations in the
quarter, including the following:

    -   John Hancock Annuities won awards for the "Best Financial Services
        Integrated Ad Campaign" from the Web Marketing Association for its
        'Advisor of Choice' Campaign and was also recognized with DALBAR's
        2008 Service Award for its service support to financial advisors.

    -   In Canada, Manulife Financial's universal life statements were ranked
        first, with the industry's only 'excellent' rating, according to an
        industry survey by DALBAR Inc. This designation recognizes Manulife's
        commitment to providing information to help clients understand their
        policy so they can work with their advisor to manage their benefits.

    -   MFC Global Investment and Manulife Vietnam Fund Management won two
        awards at Asia Asset Management's sixth annual awards program. MFC
        Global Investment Management (GIM) (Asia) won the award in the
        category "Regional Awards/Leadership in Fund Management" and Manulife
        Vietnam Fund Management (The Manulife Progressive Fund) was
        recognized in the category "Vietnam/Most Innovative Product".

    -   MFC Global Investment Management Japan Growth Fund was honoured with
        Lipper Fund Award for the fourth time. The Manulife Global Fund-Japan
        Growth Fund was recognized as the best 10-year fund for Japanese
        large cap equities at the Lipper Fund Awards in Hong Kong. Manulife's
        Japan Growth Fund, launched in 1987, earned the highest 10-year
        performance among its peers, tracking the Nikkei 225 benchmark index.

    -   Manulife-Sinochem ranked first among foreign/joint-venture insurance
        companies in China according to a China life insurance companies'
        competitiveness report. The report, published by 21st Century
        Business Herald, ranked Manulife-Sinochem first among foreign
        invested/joint-venture insurance companies in China and seventh among
        all Chinese life insurance companies.


    MANAGEMENT'S DISCUSSION AND ANALYSIS

    FINANCIAL HIGHLIGHTS
    (unaudited)
                                                          Quarterly Results
                                                        1Q09    4Q08    1Q08
                                                      -----------------------
    Shareholders' Net Income (Loss) (C$ millions)     (1,068) (1,870)    869
    Diluted Earnings (Loss) per Common Share (C$)      (0.67)  (1.24)   0.57
    Return on Common Shareholders' Equity
     (%, annualized)                                   (16.2)  (28.6)   15.1
    Premiums & Deposits (C$ millions)                 19,301  19,493  19,474
    Funds under Management (C$ billions)               405.3   404.5   400.1
    Capital (C$ billions)                               30.3    30.9    28.2


    Net Income (Loss)
    -----------------
    
    The Company reported a first quarter net loss in the shareholders'
account of $1,068 million as a result of charges for the continued declines in
the global equity markets ($1,401 million), unrealized losses on our
alternative asset classes ($277 million) and credit related impairments and
downgrades ($193 million). Shareholders' net income in the first quarter of
2008 was $869 million and included losses related to equity markets of $265
million and strong investment gains.
    Continued equity market declines, particularly in the first two months of
the quarter, resulted in charges of $1,401 million, consisting of $1,146
million for variable product guarantees, $128 million of other than temporary
impairments on equity positions in the Corporate and Other segment, $63
million on equity investments supporting non-experience adjusted policy
liabilities and $64 million relating to reduced capitalized future fee income
on variable universal life products and other fee income. In addition, because
of the market decline over the last 12 months fee income has fallen, even
after taking into consideration net new deposits, by approximately $108
million. The economic downturn has also had an adverse effect on both the fair
value of our commercial real estate and private equities, and on credit
quality of our fixed income portfolio. The decline in fair values resulted in
a $277 million strengthening of actuarial liabilities. Credit impairments in
the quarter were $121 million and actuarial liabilities were strengthened by
$72 million as a result of credit downgrades on our fixed income portfolio.
    In addition to the above market related items, there were two largely
offsetting items, both primarily related to the Japan Variable Annuity
business: a charge of $268 million related to changes in actuarial methods and
assumptions and a tax gain of $208 million.

    
    Diluted Earnings (Loss) per Share and Return on Common Shareholders'
    Equity
    --------------------------------------------------------------------
    
    The first quarter loss equates to a loss per common share of $0.67, and a
negative return on common shareholders' equity of 16.2 per cent, compared to
income per common share of $0.57 and a positive return on shareholders' equity
of 15.1 per cent for the three months ended March 31, 2008. Return on common
shareholders' equity is calculated excluding Accumulated Other Comprehensive
Income (Loss) on available-for-sale securities and cash flow hedges. (See page
9 for discussion of non-GAAP measures).

    
    Premiums and Deposits
    ---------------------
    
    Premiums and deposits amounted to $19.3 billion in the first quarter of
2009, compared to $19.5 billion for the same period last year. Premiums
increased by 20 per cent on a constant currency basis as a result of strong
sales of fixed return products in both Canada and the U.S. and in-force
insurance business growth. Deposits decreased by 28 per cent on a constant
currency basis as a result of lower variable annuity, mutual fund and
institutional client deposits.

    
    Funds under Management
    ----------------------
    Total funds under management as at March 31, 2009 were $405.3 billion, up
from $400.1 billion at March 31 last year. Increases of $57.4 billion due to
currency and $21.8 billion from positive policyholder cash flows were almost
entirely offset by the market value declines.

    Capital
    -------
    
    Total capital was $30.3 billion as at March 31, 2009, $2.1 billion higher
than $28.2 billion as at March 31, 2008. Capital increased by $2,275 million
from the issuance of common shares in the fourth quarter of 2008 and $450
million from the issuance of preference shares in the current quarter and
$3,941 million from a weakening Canadian dollar. These increases were
partially offset by $4,469 million due to net losses of $1,435 million,
unrealized losses on available-for-sale assets of $1,227 million, share
buybacks in the second and third quarters of last year of $223 million and
$1,584 million of shareholder dividends over the last twelve months.
    Regulatory capital adequacy is primarily managed at the insurance
operating company level (The Manufacturers Life Insurance Company ("MLI") and
John Hancock Life Insurance Company ("JHLICO")). MLI's Minimum Continuing
Capital and Surplus Requirements ("MCCSR") ratio of 228 per cent as at March
31, 2009 has increased by 30 points from 198 per cent as at March 31, 2008.
The increase in the ratio resulting from capital injections from MFC's capital
raising activities and from MLI's new group benefits reinsurance treaty more
than offset the impact of segregated fund guarantees on both earnings and
capital. JHLICO's capital is published annually, and ended the year with a
Risk Based Capital Ratio of 405 per cent.

    PERFORMANCE BY DIVISION

    The economic downturn and volatile markets resulted in losses in all
divisions except Reinsurance Division and Asia and Japan Division. The
positive results in Asia and Japan resulted primarily from the tax gain
discussed above. The reported impact of charges for segregated fund
guarantees, unrealized investment losses on alternative assets, provisions for
credit impairment and additions to actuarial liabilities for downgrades
overshadowed other business related results.

    
    U.S. Insurance

                                                          Quarterly Results
    Canadian dollars                                    1Q09    4Q08    1Q08
                                                      -----------------------
    Shareholders' Net Income (Loss) (millions)           (92)     36     209
    Premiums & Deposits (millions)                     1,893   2,106   1,554
    Funds under Management (billions)                   71.0    70.3    58.7
                                                      -----------------------


                                                          Quarterly Results
    U.S. dollars                                        1Q09    4Q08    1Q08
                                                      -----------------------
    Shareholders' Net Income (Loss) (millions)           (74)     30     208
    Premiums & Deposits (millions)                     1,520   1,739   1,548
    Funds under Management (billions)                   56.3    57.4    57.1
                                                      -----------------------
    

    U.S. Insurance recorded a loss of US$74 million for the first quarter of
2009, compared with earnings of US$208 million reported a year earlier. The
change was primarily driven by unfavourable investment results.
    Premiums and deposits were US$1.5 billion, down two per cent from the
first quarter of 2008 due to lower sales partially offset by in-force premium
growth.
    Funds under management as at March 31, 2009 were US$56.3 billion, down
one per cent from a year ago, as business growth was offset by a decrease in
the market value of the variable life segregated funds assets.

    
    U.S. Wealth Management

                                                          Quarterly Results
    Canadian dollars                                    1Q09    4Q08    1Q08
                                                      -----------------------
    Shareholders' Net Income (Loss) (millions)          (629) (1,314)    149
    Premiums & Deposits (millions)                     8,660   9,217   9,180
    Funds under Management (billions)                  164.1   163.9   173.8
                                                      -----------------------


                                                          Quarterly Results
    U.S. dollars                                        1Q09    4Q08    1Q08
                                                      -----------------------
    Shareholders' Net Income (Loss) (millions)          (505) (1,085)    148
    Premiums & Deposits (millions)                     6,952   7,606   9,142
    Funds under Management (billions)                  130.2   133.9   169.1
                                                      -----------------------
    

    U.S. Wealth Management recorded a loss of US$505 million for the first
quarter of 2009, compared with earnings of US$148 million reported a year
earlier. Earnings decreased due to strengthened segregated fund guarantee
reserves, reduced fee income on lower funds under management and unfavourable
investment results. Tax benefits of US$32 million were recognized in the
quarter as a result of the successful outcome of certain tax appeals.
    Premiums and deposits were US$7.0 billion, down 24 per cent from US$9.1
billion in the first quarter of 2008. Lower sales in John Hancock Variable
Annuities and John Hancock Wealth Asset Management due to the economic and
equity market downturn were partially offset by an increase in John Hancock
Fixed Products sales.
    Funds under management were US$130.2 billion, down 23 per cent from
US$169.1 billion at March 31, 2008, due to the cumulative effect of
unfavourable equity markets and also to US$3.1 billion of scheduled maturities
in Fixed Products over the last twelve months. These declines were partially
offset by net policyholder cash inflows of US$7.1 billion in Variable
Annuities and Wealth Asset Management.

    
    Canadian Division

                                                          Quarterly Results
    Canadian dollars                                    1Q09    4Q08    1Q08
                                                      -----------------------
    Shareholders' Net Income (Loss) (millions)           (88)    (13)    254
    Premiums & Deposits (millions)                     4,430   4,505   3,990
    Funds under Management (billions)                   83.8    82.3    85.8
                                                      -----------------------
    

    Canadian Division recorded a loss of $88 million for the first quarter of
2009 compared to earnings of $254 million reported a year earlier. The loss
was driven by the impact of equity market deterioration on segregated fund
guarantee reserves and unfavourable investment results. Claims experience, due
to higher mortality in all insurance businesses, was less favourable than in
2008, offsetting gains from business growth.
    Premiums and deposits for the quarter were $4.4 billion, up 11 per cent
from $4.0 billion in the first quarter of 2008. General fund premiums rose by
over 30 per cent, driven by sales of fixed rate wealth management products as
consumers sought the safety of fixed returns in light of continuing market
volatility, and growth in the insurance businesses. Variable product deposits
declined by five per cent as strong sales in Group Savings and Retirement
Solutions were more than offset by lower sales of retail segregated and mutual
fund products.
    Funds under management decreased by two per cent, or $2.0 billion, to
$83.8 billion as at March 31, 2009. The impact of equity market declines over
the past twelve months outweighed the increase from positive net sales and a
30 per cent rise in Manulife Bank's invested assets as a result of continued
strong growth in Manulife One mortgage lending assets.

    
    Asia and Japan Division

                                                          Quarterly Results
    Canadian dollars                                    1Q09    4Q08    1Q08
                                                      -----------------------
    Shareholders' Net Income (Loss) (millions)           146    (440)    186
    Premiums & Deposits (millions)                     2,846   2,320   2,670
    Funds under Management (billions)                   53.6    50.0    44.6
                                                      -----------------------


                                                          Quarterly Results
    U.S. dollars                                        1Q09    4Q08    1Q08
                                                      -----------------------
    Shareholders' Net Income (Loss) (millions)           118    (363)    186
    Premiums & Deposits (millions)                     2,286   1,913   2,658
    Funds under Management (billions)                   42.5    40.8    43.4
                                                      -----------------------
    

    Asia and Japan Division's shareholders' net income for the first quarter
of 2009 was US$118 million, compared to US$186 million a year earlier. Higher
segregated fund guarantee costs in Japan and lower fee income from our wealth
management businesses were somewhat offset by a tax gain related to variable
annuities.
    Premiums and deposits for the quarter were US$2.3 billion, down 14 per
cent from US$2.7 billion in the first quarter of 2008. Lower variable annuity
deposits in Japan were partially offset by a four per cent growth in insurance
premiums from in-force business growth and new product launches and by
additional mutual fund sales from our newly acquired asset management company
in Taiwan.
    Funds under management declined by two per cent, or US$0.9 billion, to
US$42.5 billion as at March 31, 2009. Net policyholder cash inflows of US$5.0
billion and the funds assumed through our newly acquired asset management
company in Taiwan were more than offset by the negative impact of declining
equity markets in the past twelve months.

    
    Reinsurance Division

                                                          Quarterly Results
    Canadian dollars                                    1Q09    4Q08    1Q08
                                                      -----------------------
    Shareholders' Net Income (Loss) (millions)            59     (14)     73
    Premiums (millions)                                  285     273     259
                                                      -----------------------


                                                          Quarterly Results
    U.S. dollars                                        1Q09    4Q08    1Q08
                                                      -----------------------
    Shareholders' Net Income (Loss) (millions)            48     (11)     73
    Premiums (millions)                                  229     225     258
                                                      -----------------------
    

    Reinsurance Division's net income for the first quarter of 2009 was US$48
million, down US$25 million from US$73 million reported a year earlier. This
decline was primarily due to unfavourable investment results and the non
recurrence of a gain from the update in premium accrual estimates in 2008.
These decreases were partially offset by improved Life Reinsurance claims
experience. This quarter's results were also dampened by an increase in
segregated fund guarantee reserves.
    Premiums for the quarter were US$229 million, down 11 per cent from
US$258 million reported in the first quarter of 2008. The decline was largely
due to the impact of the weakened Euro against the U.S. dollar on
International Group Program premiums as well as lower volumes. Life
Reinsurance premiums, excluding the previous year's adjustment mentioned
above, have increased due to the aging of the block.

    
    Corporate and Other

                                                          Quarterly Results
    Canadian dollars                                    1Q09    4Q08    1Q08
                                                      -----------------------
    Shareholders' Net Loss (millions)                   (464)   (125)     (2)
    Funds under Management (billions)                   30.1    35.0    34.7
                                                      -----------------------
    

    Corporate and Other is comprised of the earnings on excess residual
capital (assets backing capital, net of amount allocated to operating
divisions), changes in actuarial methods and assumptions, Investment
Division's external asset management business and the John Hancock Accident
and Health operation, which consists primarily of contracts in dispute, and
other non-operating items.
    Corporate and Other recorded a loss of $464 million for the first quarter
of 2009, compared to a loss of $2 million reported a year earlier. The current
quarter included a charge of $268 million for changes in actuarial methods and
assumptions and other than temporary equity impairments of $128 million. The
first quarter of 2008 included $72 million of realized gains on equity
securities.
    Funds under management declined by 13 per cent, or $4.6 billion, to $30.1
billion at March 31, 2009. This decrease is largely due to market value
declines in both the equity and bond portfolios, higher assets allocated the
operating divisions and dividends paid to shareholders, partially offset by
the strengthening U.S. dollar and funds received from the five year term loan
and share capital issuance in the past twelve months.

    Contingencies

    The Company is an investor in leveraged leases and has established
provisions for possible disallowance of the tax treatment and for interest on
past due taxes. We continue to believe that deductions originally claimed in
relation to these arrangements are appropriate. Although not expected to
occur, should the tax attributes of our leveraged leases be fully denied, the
maximum after tax exposure including interest would be an additional estimated
US$285 million as at March 31, 2009.

    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. Non-GAAP measures include
return on common shareholders' equity, premiums and deposits and funds under
management. Non-GAAP financial measures are not defined terms under GAAP and,
therefore, are unlikely to be comparable to similar terms used by other
issuers.
    Return on equity is a profitability measure that presents the net income
available to common shareholders as a percentage of the capital deployed to
earn the income. The Company calculates return on equity using average common
shareholders' equity excluding Accumulated Other Comprehensive Income (Loss)
on available-for-sale securities and cash flow hedges.

    About Manulife Financial

    Manulife Financial is a leading Canadian-based financial services group
serving millions of customers in 19 countries and territories worldwide.
Operating as Manulife Financial in Canada and Asia, and primarily through John
Hancock in the United States, the Company offers clients a diverse range of
financial protection products and wealth management services through its
extensive network of employees, agents and distribution partners. Funds under
management by Manulife Financial and its subsidiaries were Cdn$405.3 billion
(US$321.7 billion) as at March 31, 2009. Manulife Financial Corporation trades
as 'MFC' on the TSX, NYSE and PSE, and under '945' on the SEHK. Manulife
Financial can be found on the Internet at www.manulife.com.

    Attachments: Financial Highlights, Consolidated Statements of Operations,
Consolidated Balance Sheets, Divisional Information.

    Notes:

    Manulife Financial Corporation will host a First Quarter Earnings Results
Conference Call at 2:00 p.m. ET on May 7, 2009. For local and international
locations, please call (416) 340-2216 and toll free in North America please
call (866) 898-9626. Please call in ten minutes before the call starts. You
will be required to provide your name and organization to the operator. A
playback of this call will be available by 6:00 p.m. ET on May 7, 2009 until
May 21, 2009 by calling (416) 695-5800 or (800) 408-3053 (passcode 3274826
followed by the number sign).
    The conference call will also be webcast through Manulife Financial's
website at 2:00 p.m. ET on May 7, 2009. You may access the webcast at:
www.manulife.com/quarterlyreports. An archived version of the webcast will be
available at 4:00 p.m. ET on the website at the same URL as above.
    The First Quarter 2009 Financial Statements and Statistical Information
Package are also available on the Manulife website at:
www.manulife.com/quarterlyreports. Each of these documents may be downloaded
before the webcast begins.

    Caution Regarding Forward-Looking Statements

    This document contains forward-looking statements within the meaning of
the "safe harbour" provisions of Canadian provincial securities laws and the
U.S. Private Securities Litigation Reform Act of 1995. These forward-looking
statements relate to, among other things, our objectives, goals, strategies,
intentions, plans, beliefs, expectations and estimates, and can generally be
identified by the use of words such as "may", "will", "could", "should",
"would", "likely", "suspect", "outlook", "expect", "intend", "estimate",
"anticipate", "believe", "plan", "forecast", "objective", "continue" and
"endeavour" (or the negative thereof) and words and expressions of similar
import, 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. Certain material
factors or assumptions are applied in making forward-looking statements, 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 but are not limited to: general business
and economic conditions (including but not limited to performance of equity
markets, interest rate fluctuations, currency rates, investment losses and
defaults, movements in credit spreads, market liquidity and creditworthiness
of guarantors and counterparties); Company liquidity, including the
availability of financing to satisfy existing financial liabilities on their
expected maturity dates when required; level of competition and consolidation;
changes in laws and regulations; accuracy of information received from
counterparties and the ability of counterparties to meet their obligations;
accuracy of accounting policies and actuarial methods used by the Company; the
ability to maintain the Company's reputation; the ability to implement
effective hedging strategies; legal and regulatory proceedings; the ability to
adapt products and services to the changing market; the ability to attract and
retain key executives; the ability to complete acquisitions including the
availability of equity and debt financing for this purpose; the ability to
execute strategic plans; the disruption of or changes to key elements of the
Company's or public infrastructure systems; and environmental concerns.
Additional information about material 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 the
body of this document as well as under "Risk Factors" in our most recent
Annual Information Form, under "Risk Management" and "Critical Accounting and
Actuarial Policies" in the Management's Discussion and Analysis in our most
recent annual and interim reports, 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. We do not undertake to update any forward-looking statements
except as required by law.


    
    Financial Highlights
    (Canadian $ in millions unless otherwise stated and per share
    information, unaudited)

                                         As at and for the three months ended
                                                         March 31
                                                  2009       2008   % Change
    -------------------------------------------------------------------------
    Net income (loss)                         $ (1,071)  $    861          -
      Loss attributed to participating
       policyholders                                 3          8        (63)
    -------------------------------------------------------------------------
    Net income (loss) attributed to
     shareholders                             $ (1,068)  $    869          -
      Preferred share dividends                     (7)        (7)         -
    -------------------------------------------------------------------------
    Net income (loss) available to
     common shareholders                      $ (1,075)  $    862          -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Premiums and deposits:
      Life and health insurance premiums      $  4,278   $  3,679         16
      Annuity and pension premiums               2,694      1,321        104
      Segregated fund deposits                   8,259      9,197        (10)
      Mutual fund deposits                       2,096      2,812        (25)
      Institutional advisory account deposits    1,181      1,696        (30)
      ASO premium equivalents                      669        633          6
      Other fund deposits                          124        136         (9)
    -------------------------------------------------------------------------
    Total premiums and deposits               $ 19,301   $ 19,474         (1)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Funds under management:
      General fund                            $191,132   $165,661         15
      Segregated funds                         163,816    174,633         (6)
      Institutional advisory accounts           20,798     20,848          -
      Mutual funds                              24,001     32,146        (25)
      Other funds                                5,597      6,846        (18)
    -------------------------------------------------------------------------
    Total funds under management              $405,344   $400,134          1
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Capital
      Liabilities for preferred shares and
       qualifying capital instruments         $  3,139   $  3,029          4
      Non-controlling interest in
       subsidiaries                                222        162         37

      Equity
        Participating policyholders' equity         59         74        (20)
        Shareholders' equity
          Preferred shares                       1,080        638         69
          Common shares                         16,177     13,972         16
          Contributed surplus                      161        148          9
          Retained earnings(1)                  11,356     14,527        (22)
          Accumulated other comprehensive loss
           on AFS securities and translation
           of net foreign operations            (1,939)    (4,353)       (55)
    -------------------------------------------------------------------------
        Total capital                         $ 30,255   $ 28,197          7
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Selected key performance measures:
      Basic earnings (loss) per common share  $  (0.67)  $   0.57
      Diluted earnings (loss) per
       common share                           $  (0.67)  $   0.57
      Return on common shareholders' equity
       (annualized)(2)                         (16.2)%      15.1%
      Book value per common share             $  15.81   $  16.17
      Common shares outstanding (in millions)
        End of period                            1,611      1,497
        Weighted average - basic                 1,610      1,498
        Weighted average - diluted               1,610      1,509

    (1) Opening retained earnings at January 1, 2008 have been reduced by
        $229 million relating to an understatement of policy liabilities and
        an understatement of future income tax liabilities relating primarily
        to periods prior to the merger with John Hancock Financial Services,
        Inc. in April 2004.

    (2) Return on common shareholders' equity is net income (loss) available
        to common shareholders divided by average common shareholders' equity
        excluding accumulated other comprehensive income (loss) on AFS
        securities and cash flow hedges.



    Summary Consolidated Financial Statements

    Consolidated Statements of Operations

    (Canadian $ in millions except per share information, unaudited)

                                                             For the three
                                                              months ended
                                                                March 31
                                                             2009       2008
    -------------------------------------------------------------------------
    Revenue
    Premium income                                       $  6,972   $  5,000
    Investment income
      Investment income                                     1,837      2,328
      Realized/unrealized losses on assets supporting
       policy liabilities and consumer notes               (2,103)      (703)
    Other revenue                                           1,293      1,343
    -------------------------------------------------------------------------
    Total revenue                                        $  7,999   $  7,968
    -------------------------------------------------------------------------
    Policy benefits and expenses
    To policyholders and beneficiaries
      Death, disability and other claims                 $  1,835   $  1,520
      Maturity and surrender benefits                       2,591      1,844
      Annuity payments                                        882        758
      Policyholder dividends and experience
       rating refunds                                         420        342
      Net transfers to segregated funds                       636        358
      Change in actuarial liabilities(1)                    1,329       (506)
    General expenses                                          924        864
    Investment expenses                                       232        231
    Commissions                                               978      1,031
    Interest expense                                          218        305
    Premium taxes                                              73         68
    Non-controlling interest in subsidiaries                    8          2
    -------------------------------------------------------------------------
    Total policy benefits and expenses                   $ 10,126   $  6,817
    -------------------------------------------------------------------------
    Income (loss) before income taxes                    $ (2,127)  $  1,151
    Income taxes                                            1,056       (290)
    -------------------------------------------------------------------------
    Net income (loss)                                    $ (1,071)  $    861
      Loss attributed to participating policyholders            3          8
    -------------------------------------------------------------------------
    Net income (loss) attributed to shareholders         $ (1,068)  $    869
      Preferred share dividends                                (7)        (7)
    -------------------------------------------------------------------------
    Net income (loss) available to common shareholders   $ (1,075)  $    862
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic earnings (loss) per common share               $  (0.67)  $   0.57
    Diluted earnings (loss) per common share             $  (0.67)  $   0.57

    (1) Includes impact of scheduled maturities in John Hancock Fixed
        Products institutional products of $1.2 billion in Q1 2009 and
        $0.5 billion in Q1 2008.



    Consolidated Balance Sheets
    (Canadian $ in millions, unaudited)

                                                             As at March 31
    Assets                                                 2009(1)    2008(1)
    -------------------------------------------------------------------------
    Invested assets
    Cash and short-term securities                       $ 18,062   $ 11,512
    Securities
      Bonds                                                84,295     75,213
      Stocks                                                7,946     11,236
    Loans
      Mortgages                                            31,795     27,165
      Private placements                                   26,235     22,123
      Policy loans                                          7,746      6,129
      Bank loans                                            2,439      2,238
    Real estate                                             6,491      5,248
    Other investments                                       6,123      4,797
    -------------------------------------------------------------------------
    Total invested assets                                $191,132   $165,661
    -------------------------------------------------------------------------
    Other assets
    Accrued investment income                            $  1,792   $  1,509
    Outstanding premiums                                      751        686
    Goodwill                                                8,055      6,946
    Intangible assets                                       2,160      1,841
    Derivatives                                             6,590      2,809
    Miscellaneous                                           3,575      2,701
    -------------------------------------------------------------------------
    Total other assets                                   $ 22,923   $ 16,492
    -------------------------------------------------------------------------
    Total assets                                         $214,055   $182,153
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Segregated funds net assets                          $164,464   $175,248
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and equity
    -------------------------------------------------------------------------
    Policy liabilities                                   $150,162   $128,092
    Deferred realized net gains                               120        112
    Bank deposits                                          13,481     10,578
    Consumer notes                                          1,642      2,038
    Long-term debt                                          3,602      1,836
    Future income tax liability                             1,413      2,630
    Derivatives                                             5,657      2,671
    Other liabilities                                       7,461      6,085
    -------------------------------------------------------------------------
                                                         $183,538   $154,042

    Liabilities for preferred shares and capital
     instruments                                            3,683      3,029
    Non-controlling interest in subsidiaries                  222        162

    Equity
      Participating policyholders' equity                      59         74
      Shareholders' equity
        Preferred shares                                    1,080        638
        Common shares                                      16,177     13,972
        Contributed surplus                                   161        148
        Retained earnings                                  11,356     14,527
        Accumulated other comprehensive loss               (2,221)    (4,439)
    -------------------------------------------------------------------------
    Total equity                                         $ 26,612   $ 24,920
    -------------------------------------------------------------------------
    Total liabilities and equity                         $214,055   $182,153
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Segregated funds net liabilities                     $164,464   $175,248
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (1) Opening retained earnings at January 1, 2008 have been reduced by
        $229 million relating to an understatement of policy liabilities and
        an understatement of future income tax liabilities relating primarily
        to periods prior to the merger with John Hancock Financial Services,
        Inc. in April 2004.


    Notes to Summary Consolidated Financial Statements
    (Canadian $ in millions, unaudited)

    Note 1: Divisional Information

                                     For the quarter ended March 31, 2009
                                ---------------------------------------------
                                                U.S.
                                     U.S.      Wealth               Asia and
    Premiums and deposits         Insurance  Management  Canadian     Japan
    -------------------------------------------------------------------------
    General fund premiums          $  1,535   $  2,057   $  2,112   $    983
    Segregated fund deposits            358      5,092      1,552      1,251
    Mutual fund deposits                  -      1,387         97        612
    Institutional advisory
     account deposits                     -          -          -          -
    ASO premium equivalents               -          -        669          -
    Other fund deposits                   -        124          -          -
    -------------------------------------------------------------------------
    Total                          $  1,893   $  8,660   $  4,430   $  2,846
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income (loss)              $    (92)  $   (629)  $    (87)  $    142
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Funds under management                     As at March 31, 2009
    -------------------------------------------------------------------------
    General fund                   $ 60,969   $ 41,829   $ 53,711   $ 25,633
    Segregated funds                 10,008     98,918     27,879     23,923
    Institutional advisory
     accounts                             -          -          -          -
    Mutual funds                          -     20,223      2,244      1,534
    Other funds                           -      3,087          -      2,510
    -------------------------------------------------------------------------
    Total                          $ 70,977   $164,057   $ 83,834   $ 53,600
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                            For the quarter ended March 31, 2009
                           ---------------------------------------
                                              Corporate
                                                 and
    Premiums and deposits         Reinsurance   Other      Total
    --------------------------------------------------------------
    General fund premiums          $    285   $      -   $  6,972
    Segregated fund deposits              -          6      8,259
    Mutual fund deposits                  -          -      2,096
    Institutional advisory
     account deposits                     -      1,181      1,181
    ASO premium equivalents               -          -        669
    Other fund deposits                   -          -        124
    --------------------------------------------------------------
    Total                          $    285   $  1,187   $ 19,301
    --------------------------------------------------------------
    --------------------------------------------------------------

    Net income (loss)              $     59   $   (464)  $ (1,071)
    --------------------------------------------------------------
    --------------------------------------------------------------

    Funds under management               As at March 31, 2009
    --------------------------------------------------------------
    General fund                   $  2,776   $  6,214   $191,132
    Segregated funds                      -      3,088    163,816
    Institutional advisory
     accounts                             -     20,798     20,798
    Mutual funds                          -          -     24,001
    Other funds                           -          -      5,597
    --------------------------------------------------------------
    Total                          $  2,776   $ 30,100   $405,344
    --------------------------------------------------------------
    --------------------------------------------------------------


                                      For the quarter ended March 31, 2008
                                ---------------------------------------------
                                                U.S.
                                     U.S.      Wealth               Asia and
    Premiums and deposits         Insurance  Management  Canadian     Japan
    -------------------------------------------------------------------------
    General fund premiums          $  1,263   $  1,110   $  1,611   $    757
    Segregated fund deposits            291      5,510      1,587      1,684
    Mutual fund deposits                  -      2,424        159        229
    Institutional advisory
     account deposits                     -          -          -          -
    ASO premium equivalents               -          -        633          -
    Other fund deposits                   -        136          -          -
    -------------------------------------------------------------------------
    Total                          $  1,554   $  9,180   $  3,990   $  2,670
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income (loss)              $    209   $    149   $    253   $    179
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Funds under management                     As at March 31, 2008
    -------------------------------------------------------------------------
    General fund                   $ 47,688   $ 35,339   $ 51,495   $ 17,475
    Segregated funds                 11,051    107,643     31,123     22,105
    Institutional advisory
     accounts                             -          -          -          -
    Mutual funds                          -     27,167      3,161      1,818
    Other funds                           -      3,640          -      3,206
    -------------------------------------------------------------------------
    Total                          $ 58,739   $173,789   $ 85,779   $ 44,604
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                           For the quarter ended March 31, 2008
                          ----------------------------------------
                                              Corporate
                                                 and
    Premiums and deposits         Reinsurance   Other      Total
    --------------------------------------------------------------
    General fund premiums          $    259   $      -   $  5,000
    Segregated fund deposits              -        125      9,197
    Mutual fund deposits                  -          -      2,812
    Institutional advisory
     account deposits                     -      1,696      1,696
    ASO premium equivalents               -          -        633
    Other fund deposits                   -          -        136
    --------------------------------------------------------------
    Total                          $    259   $  1,821   $ 19,474
    --------------------------------------------------------------
    --------------------------------------------------------------

    Net income (loss)              $     73   $     (2)  $    861
    --------------------------------------------------------------
    --------------------------------------------------------------

    Funds under management             As at March 31, 2008
    --------------------------------------------------------------
    General fund                   $  2,513   $ 11,151   $165,661
    Segregated funds                      -      2,711    174,633
    Institutional advisory
     accounts                             -     20,848     20,848
    Mutual funds                          -          -     32,146
    Other funds                           -          -      6,846
    --------------------------------------------------------------
    Total                          $  2,513   $ 34,710   $400,134
    --------------------------------------------------------------
    --------------------------------------------------------------


    Note 2: Comparatives

    Certain comparative amounts have been reclassified to conform with the
    current period's presentation.
    





For further information:

For further information: Media inquiries: Laurie Lupton, (416) 852-7792,
Laurie_Lupton@manulife.com; Investor Relations: Amir Gorgi, 1-800-795-9767,
investor_relations@manulife.com


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