Manulife Financial Corporation's Second Quarter Earnings Increase to $1.77 Billion



    
    C$ unless otherwise stated

    TSX/NYSE/PSE: MFC       SEHK: 945

    -   Solid performance reported across key business areas
    -   Additional progress in variable annuity hedging, rebalancing and
        de-risking product portfolio
    -   Capital position at satisfactory levels
    -   Given continued economic volatility, dividend reduced
    

    TORONTO, Aug. 6 /CNW/ - Manulife Financial Corporation ("MFC") today
reported shareholders' net income of $1,774 million for the second quarter
ended June 30, 2009, compared to $1,008 million in the second quarter of 2008.
Fully diluted earnings per share was $1.09 compared to $0.66 in 2008. The
Manufacturers Life Insurance Company ("MLI") reported an MCCSR ratio of 242
per cent as at June 30, 2009, up from 200 per cent last year.
    Donald A. Guloien, President and Chief Executive Officer said, "We are
pleased with the strong earnings, business growth and capital levels reflected
in this quarter's results. We reported solid performance in almost every area
of our business, made progress in rebalancing our product mix, maintained
strong asset quality and executed a number of very successful capital raises
during and after the close of the quarter."
    He added, "While our capital position at the quarter's end is at
satisfactory levels, our capital planning must anticipate more conservative
economic scenarios than we are currently experiencing and also provide more
flexibility to respond to both risks and opportunities from a continued
position of strength. We therefore remain focused on achieving fortress levels
of capital in all of our operating businesses, as well as at the consolidated
Company."
    In a separate release today, the Board of Directors today announced its
decision to reduce MFC's quarterly common dividend by 50 per cent to $0.13 per
share, effective September 21, 2009. Donald A. Guloien stated, "While we
recognize the importance of the cash dividend to many of our common
shareholders, we believe that retaining more of our earnings is the most
effective means of building capital, while still providing an attractive yield
for our shareholders who will benefit as we deploy our capital for growth. We
believe that companies that build fortress levels of capital will benefit
their policyholders and shareholders and be recognized favourably by
regulators and ratings agencies."
    The quarter's earnings were primarily driven by the significant increase
in global equity markets which resulted in non-cash gains of $2,622 million,
of which $2,379 million related to segregated fund guarantees. Partially
offsetting these gains were the impact of lower corporate bond rates and, to a
lesser extent, the continued pressure on credit. The decline in interest rates
and other fixed income related items resulted in non-cash charges of $1,116
million, primarily as a result of the lower investment returns assumed in the
valuation of policy liabilities. In addition, credit impairments totaled $109
million, other than temporary impairments ("OTTI") on equity investments were
$53 million and actuarial related charges for downgrades amounted to $106
million. During the quarter the Company increased its tax related provisions
on leveraged lease investments by $139 million and reported net charges for
changes in actuarial methods and assumptions of $87 million. Excluding the
aforementioned items, earnings for the quarter totaled $776 million compared
to $745 million a year ago.
    "While the increase in equity markets in the quarter resulted in a
release of a large amount of segregated fund guarantee reserves, lower
corporate bond rates had a significant adverse impact on the quarter's
results. Canadian actuarial practices require us to reflect the current
investment returns on future cash flows in the valuation of our policy
liabilities," noted Michael W. Bell, Senior Executive Vice President and Chief
Financial Officer. "In addition, as noted in our June 19, 2009 press release,
we continue to see emerging unfavourable experience for policyholder behaviour
and other actuarial assumptions. During the second quarter, we strengthened
reserves for updated policyholder behavior assumptions related to partial
withdrawals in the Japan variable annuity business."
    "We are currently reviewing other policyholder experience assumptions as
well as assumptions for economic and investment factors. We expect to complete
our annual review of all actuarial assumptions in the third quarter, and our
current expectation is that the updated assumptions will result in a material
charge to earnings that will likely be recorded next quarter. Although we have
not completed our assessment nor have we reached any conclusions, the
preliminary information indicates that the possible change in assumptions with
respect to policyholder behavior for segregated fund guarantee products may
result in a charge not to exceed $500 million. Changes in assumptions for
other factors cannot be estimated at this time; however given the current
economic conditions, they may result in an additional charge to earnings,"
said Mr. Bell.
    Chief Operating Officer John D. DesPrez III said, "We were pleased with
our business growth this quarter. In addition to rebalancing and further
de-risking our product mix, we reported strong performance in virtually all
non-variable annuity lines of business including insurance, fixed products,
banking products, mutual funds, institutional asset management and our group
businesses. Total Company sales and new business embedded value showed
improvement over the first quarter as market sentiment improved and hedging
costs declined. Although the current environment still has its challenges, it
also presents significant opportunities for growth, and we remain focused on
capitalizing on these opportunities."
    Premiums and deposits were $19.2 billion in the quarter, an increase of
three per cent from the prior year. Variable annuity and segregated fund
deposits declined by $1.4 billion from the prior year, partly driven by the
product changes discussed below. This decline was offset by increased premiums
from a growth of in-force insurance business and higher sales of fixed return
wealth products.
    New business embedded value ("NBEV") in the second quarter of 2009 was
$644 million, up 19 per cent from the prior quarter but down 23 per cent from
the prior year. Insurance NBEV was eight per cent higher than prior year
levels driven by growth in Japan and US Long-Term Care while wealth NBEV was
down 45 per cent reflecting hedging costs and lower variable wealth sales.
    Total funds under management as at June 30, 2009 were $420.9 billion, an
increase of five per cent over the prior year, as net policyholder cash flows
of $19.5 billion and favourable currency movements more than offset the market
value declines over the last twelve months.
    Consistent with the review of its variable annuity product portfolio, the
Company continued to implement changes to its product offerings, further
rebalancing and de-risking its product mix. Most notably, the Company
introduced a new variable annuity product in the U.S. called AnnuityNote,
which offers a more simplified design and has a more conservative risk
profile. In addition, certain products in Canada and Japan were discontinued.
With the global equity market rally in the quarter, the Company also took
advantage of an opportunity to hedge an additional $3 billion of in-force
variable annuity business. Substantially all new variable annuity business in
the U.S. and Canada continues to be hedged on an ongoing basis.

    
    OPERATING HIGHLIGHTS

    Insurance

    -   Insurance sales for the quarter were up two per cent from prior year
        levels, but down eight per cent on a constant currency basis, where
        strong sales in Japan were offset by declines in the U.S. and Canada.

    -   In the U.S., overall sales improved considerably over the prior
        quarter but were down from prior year levels. Compared to prior year,
        Life sales were down 29 per cent and Long-Term Care sales were down
        ten per cent. Life sales reflected a consumer trend to smaller
        policies and lower premium products; however, the sales environment
        has improved somewhat from the start of the year with the business
        experiencing strong new business applications and increasing sales.
        During the quarter, John Hancock was named the sole carrier for the
        Federal Long Term Care Insurance Program, the largest employer-
        sponsored LTC insurance program in the U.S.

    -   In Canada, overall sales were in line with prior year levels, with
        group benefits sales increasing eight per cent, offsetting a 13 per
        cent decline in individual life sales. While individual sales were
        down largely due to strong whole life sales in the prior year, Group
        Benefit sales continued to be driven by growth in mid and large case
        accounts and distribution expansion.

    -   In Asia, overall sales exceeded prior year levels by 24 per cent.
        Japan sales almost doubled prior year volumes, driven by the
        continued success of its new insurance offerings, while Hong Kong
        sales improved considerably over the first quarter of 2009. During
        the quarter, new product offerings were introduced in Hong Kong and
        Manulife continued to expand its operations in China, where it
        received licensing approval to open a new branch in Shenyang,
        Liaoning province.

    Wealth Management

    -   Wealth sales for the quarter were down 11 per cent from prior year
        levels, or 19 per cent on a constant currency basis, as continued
        strong growth in fixed products in the U.S. and Canada was more than
        offset by declines in variable products across all geographies.
        Variable annuity sales declined by 30 per cent compared to the second
        quarter of 2008 as a result of the Company's risk management
        initiatives and weaker economic conditions.

    -   In the U.S., wealth sales excluding variable annuity products
        increased by 16 per cent over the first quarter of 2009 and decreased
        21 per cent versus prior year levels. Sales in Fixed Products nearly
        doubled prior year levels, as equity market volatility and credit
        concerns prompted investors to seek fixed return products from top
        rated firms. The increase was more than offset by decreased volumes
        in the Wealth Asset Management segment, driven by weak economic
        conditions.

    -   In Canada, sales excluding variable annuity products increased by 16
        per cent over prior year levels as a result of volumes more than
        doubling in both individual fixed products and Group Savings and
        Retirement Solutions, with the latter driven by success in large case
        defined contribution sales. This growth was partially offset by
        declines in mutual fund sales.

    -   In Asia, sales excluding variable annuity products increased as a
        result of the acquisition of an asset management company in Taiwan in
        2008.

    -   MFC Global Investment Management ("GIM") was selected as investment
        adviser for the MD Dividend Fund, representing a $1 billion mandate
        from MD Funds Management. While not included in wealth sales metrics,
        this mandate reflects the confidence that was placed in MFC GIM's
        strong investment management and servicing capabilities. MFC GIM's
        funds under management ("FUM") reached a significant milestone when
        it surpassed the $100 billion mark, with $102 billion in FUM as at
        June 30, 2009 - an all-time high.

    Corporate

    -   During the quarter, the Company issued public securities for gross
        proceeds of $1,950 million which was primarily used to repay and
        refinance existing debt. The securities included two separate issues
        of Medium Term Notes for $600 million and $1 billion and a preferred
        share issue for $350 million. Both note issues constitute senior
        indebtedness, pursuant to the Company's medium term note program.

        -  The $600 million notes pay 7.768 per cent and mature in 2019.

        -  The $1 billion notes pay 4.896 per cent and are due in 2014.

        -  The $350 million of new Class 1 Series 1 non-cumulative 5-year
           rate reset preferred shares have an initial fixed dividend yield
           of 5.6 per cent. The 5-year resets are equal to 5-year Government
           of Canada bonds plus 3.23 per cent or convertible to Class 1
           Series 2 floating rate preferred shares, which are entitled to
           non-cumulative quarterly floating dividends based on 3-month
           Government of Canada treasury bills plus 3.23 per cent.

     -  Several executive appointments were announced in the quarter,
        including:

        -  Michael W. Bell as Senior Executive Vice President and Chief
           Financial Officer, succeeding Peter H. Rubenovitch, who is
           retiring from Manulife after 14 years of distinguished service.

        -  James R. Boyle as President of John Hancock Financial Services,
           succeeding John D. DesPrez III, who was recently appointed Chief
           Operating Officer.
        -  Warren A. Thomson as Senior Executive Vice President and Chief
           Investment Officer, succeeding Donald A. Guloien, who was
           appointed recently President and Chief Executive Officer.
        -  Scott S. Hartz as Executive Vice President, General Account
           Investments, in a newly created role which oversees Manulife's
           worldwide general account investments of over $180 billion.

     -  Subsequent to the quarter end, the Company raised $1 billion
        through the issuance of Innovative Tier 1 Notes. The notes pay
        7.405 per cent per annum until December 30, 2019, with 5 year
        resets thereafter equal to 5- year Government of Canada bonds plus
        5 per cent. The notes may be redeemed in whole or in part on or
        after December 31, 2014, with regulatory (OSFI) approval.

    Awards & Recognition

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

    -   Manulife Financial was named one of Canada's '50 Most Socially
        Responsible Corporations' in the Jantzi-MacLean's Corporate Social
        Responsibility Report 2009. The selection is based on a broad range
        of social, environment and governance indicators.

    -   In Hong Kong, Manulife (International) Limited was again recognized
        for its brand appeal and service excellence. For the third year in a
        row, Manulife received the Sing Tao Excellent Services Brand Award
        2008. Manulife also won The Outstanding Insurance Company in Capital
        Hong Kong Outstanding Enterprise Awards, honouring a corporation's
        outstanding performance and achievements. For the sixth consecutive
        year, Manulife won the Reader's Digest Trusted Brands Gold Award for
        the insurance company category in Hong Kong.

    -   Four mutual funds offered by Canada Individual Wealth Management and
        managed by MFC GIM have been recognized for excellence in the
        investment industry at the 2009 Canada Lipper Fund Awards. They were
        all recognized for consistently strong risk-adjusted performance
        relative to their peers.

    -   John Hancock Funds' Creative Services Team won a 2009 "Stevie Award"
        in the Best Creative Team category at the American Business Awards
        ceremony held on June 22 in New York City. It was the team's third
        consecutive win in this category.

    MANAGEMENT'S DISCUSSION AND ANALYSIS

    FINANCIAL HIGHLIGHTS
    (unaudited)
                                                       Quarterly Results
                                                      2Q09     1Q09     2Q08
                                                   --------------------------
    Shareholders' Net Income (Loss) (C$ millions)    1,774   (1,068)   1,008
    Net income (loss) available to common
     shareholders (C$ millions)                      1,758   (1,075)   1,000
    Diluted Earnings (Loss) per Common Share (C$)     1.09    (0.67)    0.66
    Return on Common Shareholders' Equity(1)
     (%, annualized)                                  26.9    (16.2)    17.0
    Premiums & Deposits(1) (C$ millions)            19,196   19,301   18,693
    Funds under Management(1) (C$ billions)          420.9    405.3    400.3
    Capital(1) (C$ billions)                          31.1     30.2     28.1

    (1) This item is a non-GAAP financial measure. For a discussion of our
        use of non-GAAP financial measures, see "Performance and Non-GAAP
        Measures" below.

    Net Income
    ----------
    

    The Company's shareholders' net income for the second quarter was $1,774
million, an increase of $766 million from $1,008 million reported a year ago.
The change was primarily driven by the significant increase in global equity
markets which resulted in non-cash gains of $2,622 million, of which $2,379
million related to segregated fund guarantees. Partially offsetting these
gains were the impact of lower corporate bond rates and, to a lesser extent,
the continued pressure on credit. The decline in interest rates and other
fixed income related items resulted in non cash charges of $1,116 million,
primarily as a result of the lower investment returns assumed in the valuation
of policy liabilities. In addition, credit impairments totaled $109 million,
other than temporary impairments ("OTTI") on equity investments were $53
million and actuarial related charges for downgrades amounted to $106 million.
During the quarter the Company increased its tax related provisions on
leveraged lease investments by $139 million and reported net charges for
changes in actuarial methods and assumptions of $87 million. Excluding the
aforementioned items, earnings for the quarter totaled $776 million compared
to $745 million a year ago.
    Based upon emerging experience for policyholder behavior, economic,
investment, and other important actuarial assumptions, the Company currently
expects that the annual review of actuarial methods and assumptions will
result in a material charge to income that will likely be recorded in the
third quarter. Although we have not completed our assessment nor have we
reached any preliminary conclusions regarding the overall charge to earnings,
preliminary information with respect to policyholder behavior assumptions on
variable annuity and segregated fund guarantee products would indicate that
there is a possibility of a change in assumptions which could result in
charges currently expected not to exceed $500 million. Changes in assumptions
for other factors cannot be estimated at this time, however given the current
economic conditions, these changes in assumptions may result in an additional
charge to earnings. See "Caution Regarding Forward-Looking Statements" below.

    
    Components of earnings (C$ millions)              2Q09     2Q08   Change
                                                   --------------------------
    Earnings excluding items below(1)                  776      745       31
    Equity related gains                             2,622       16    2,606
    Other investment related gains (losses)         (1,130)     364   (1,494)
    Credit, OTTI and downgrades                       (268)     (74)    (194)
    Tax related provisions on leveraged lease
     investments                                      (139)     (32)    (107)
    Changes in actuarial methods and assumptions       (87)     (11)     (76)
    Shareholders' Net Income                         1,774    1,008      766

    (1) This item is a non-GAAP financial measure. For a discussion of our
        use of non-GAAP financial measures, see "Performance and Non-GAAP
        Measures" below. See the table above for a reconciliation of this
        item to to Shareholders' Net Income.
    

    The $31 million increase in earnings excluding the items below was
attributable to growth in business, additional income from holding higher
segregated fund reserves and a stronger U.S. dollar, partially offset by lower
fee income, the absence of realized gains on the Corporate and Other segment's
equity portfolio, as well as adverse lapse experience.
    Because a portion of the equity related gains as well as some interest
related gains (included in other investment related gains (losses) in the
table above) were subject to lower tax rates than were the investment related
losses, the Company has a net tax recovery in the quarter. The effective tax
rate on core earnings in the quarter was similar to that in the prior year.
    Major equity markets around the world strengthened during the quarter by
15 per cent or more, resulting in non-cash equity related gains of $2,622
million, of which $2,379 million related to segregated fund guarantees, $135
million related to equity investments supporting non-experience adjusted
policy liabilities and $108 million is attributable to higher capitalized
future fee income on variable universal life products as well as on other fee
income.
    The bulk of the $1,130 million of other investment related losses is
related to the change in interest rates during the quarter. This non-cash
charge arose primarily as a result of the net lower interest rates assumed in
the valuation of policy liabilities. The actuarial valuation methodology
incorporates market based interest rates on the reinvestment of net projected
cash flows. These cash flows include the projected cash flows of current
investment and derivative holdings combined with projected policyholder cash
flows, such as premiums and claims. Derivative holdings reduce a portion of an
open interest rate position associated with the net future cash flows but do
not reduce the risk of changes to credit spreads. The projected cash flows are
impacted by both current market bond rates and spreads between swap and bond
rates. Decreases in market bond rates and in spreads between swap and bond
rates both resulted in an increase in policy liabilities and therefore a
charge to earnings this quarter. During the quarter, long-maturity corporate
bond rates declined by approximately 80 basis points in both Canada and the
U.S. and the spreads between forward starting swaps and corporate rates
declined by approximately 160 basis points in the U.S. These movements and
other fixed income related items partially offset by interest related gains
that were fair valued and incurred in favourable tax jurisdictions resulted in
net non-cash charges in the quarter of $1,116 million.
    Credit impairments of $109 million (2008 - $24 million) and other than
temporary impairments ("OTTI") on equity positions in the Corporate and Other
Segment of $53 million (2008 - $12 million) were recognized in the quarter. In
addition actuarial liabilities were strengthened for credit related downgrades
resulting in a charge to earnings of $106 million ($2008 - $38 million).
    During the quarter the Company increased its tax related provisions on
leveraged lease investments by $139 million (2008 - $ 32 million) and reported
charges for changes in actuarial methods and assumptions of $87 million (2008
- $ 11 million). The changes in actuarial methods and assumptions included a
post tax charge in earnings of $181 million from updated policyholder behavior
assumptions related to partial withdrawals in the Japan variable annuity
business partially offset by a number of smaller items.
    Year-to-date shareholders' net income was $706 million compared to $1,877
million in 2008.

    Normalized Earnings

    The information in this section is forward-looking information and should
be read in conjunction with the section below entitled "Caution Regarding
Forward-Looking Statements". Given the current economic conditions including
the volatility of equity markets, interest rates and other factors such as
those disclosed in the Component of Earnings table above, we are providing
forward-looking information on what we refer to as "normalized earnings",
which is a non-GAAP measure. This discussion of normalized earnings should not
be considered earnings guidance, particularly as it is not possible to predict
near term market conditions. Estimated normalized earnings are based on
assumptions that include our book of business, an equity market growth of two
per cent per quarter for the major North American markets, foreign currency
rates that are consistent with levels as at June 30, 2009, and other
investment returns and policyholder experience consistent with our current
best estimate actuarial assumptions. It would exclude gains, losses and other
items such as those disclosed in the table referred to above, which are:
Equity related gains; Other investment related gains (losses); Credit, OTTI
and downgrades; Tax related provisions on leverage lease investments; and
Changes in actuarial methods and assumption; the net effect of which are
unable to reliably estimate. We estimate normalized earnings to be between
$750 million and $850 million per quarter for the remainder of 2009 and 2010.
Estimated normalized earnings would imply a return on equity of approximately
12 per cent. Normalized earnings and actual reported quarterly results will
differ from estimated normalized earnings for any change in the factors
outlined above which were included and excluded in estimated normalized
earnings. See also "Risk Factors" in our most recent Annual Information Form,
"Risk Management" and "Critical Accounting and Actuarial Policies" in the
Management's Discussion and Analysis in our most recent annual and interim
reports, and the "Risk Management" note to the consolidated financial
statements in our most recent annual and interim reports for other factors
that could impact normalized earnings and actual reported results.

    
    Diluted Earnings per Share and Return on Common Shareholders' Equity
    --------------------------------------------------------------------
    
    Second quarter diluted earnings per common share was $1.09 ($0.66 in
2008) and return on common shareholders' equity was 26.9 per cent for the
three months ended June 30, 2009 (17.0 per cent for the three months ended
June 30, 2008). Return on common shareholders' equity, a non-GAAP financial
measure, is calculated excluding Accumulated Other Comprehensive Income (Loss)
on available-for-sale securities and cash flow hedges. See "Performance and
Non-GAAP Measures" below.

    
    Premiums and Deposits
    ---------------------
    
    Premiums and deposits amounted to $19.2 billion in the second quarter of
2009, compared to $18.7 billion for the same period last year. At the end of
the first quarter of 2009, Canadian Group Benefits entered into an external
reinsurance agreement which resulted in a substantial reduction in net premium
revenue reported on the income statement. As the agreement provides that the
Company retain certain upside benefits and certain risks, we continue to
include the associated direct premiums as part of the premiums and deposits
metric.
    Premiums related to the insurance businesses were $5.2 billion and,
driven by growth in the in-force business, increased eight per cent in the
U.S., five per cent in Canada and 13 per cent in Asia and Japan. Annuity and
pension premiums were $2.1 billion, an increase of 41 per cent over the prior
year, fuelled by sales demand for fixed return wealth products.
    Deposits were $11.9 billion in the quarter, a decline of $0.8 billion
from the prior year. The decline consists of a $1.4 billion decrease in
variable annuity and segregated fund guarantee sales resulting from: changes
to product offerings and economic conditions (sales were $3.5 billion in the
second quarter of 2009 and $4.9 billion in the second quarter of 2008); and a
$0.5 billion decrease in mutual fund deposits; partially offset by an increase
in Institutional Advisory Account deposits and a stronger U.S. dollar.

    
    Funds under Management
    ----------------------
    
    Total funds under management as at June 30, 2009 were $420.9 billion, up
from $400.3 billion at June 30 last year. Increases of $41.2 billion due to
currency and $19.5 billion from positive policyholder cash flows were
partially offset by the market value declines.

    
    Capital
    -------
    
    Total capital was $31.1 billion as at June 30, 2009, $3.0 billion higher
than $28.1 billion as at June 30, 2008. Capital increased by $2,275 million
from the issuance of common shares in the fourth quarter of 2008, $800 million
from the issuance of preference shares in the first half of 2009 and $2,519
million from a weakening Canadian dollar. These increases were partially
offset by the cumulative effect over the last twelve months of $649 million of
net losses, $309 million of net unrealized losses on available-for-sale assets
and $1,583 million of shareholder dividends paid in cash, as well as share
buybacks in the third quarter of last year of $110 million.
    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 242 per cent as at June
30, 2009 has increased by 42 points from 200 per cent as at June 30, 2008. The
increase in the ratio resulting from capital injections from MFC's capital
raising activities more than offset the impact of segregated fund guarantees
on both earnings and capital.

    
    PERFORMANCE BY DIVISION

    U.S. Insurance
                                                        Quarterly Results
    Canadian dollars                                  2Q09     1Q09     2Q08
                                                    -------------------------
    Shareholders' Net Income (Loss) (millions)        (631)     (92)     223
    Premiums & Deposits (millions)                   1,962    1,893    1,647
    Funds under Management (billions)                 67.7     71.0     58.5
                                                    -------------------------

                                                        Quarterly Results
    U.S. dollars                                      2Q09     1Q09     2Q08
                                                    -------------------------
    Shareholders' Net Income (Loss) (millions)        (541)     (74)     221
    Premiums & Deposits (millions)                   1,682    1,520    1,630
    Funds under Management (billions)                 58.2     56.3     57.4
                                                    -------------------------
    

    U.S. Insurance recorded a loss of US$541 million for the second quarter
of 2009, compared with earnings of US$221 million reported a year earlier. The
decrease was due to investment related losses and to a much lesser extent
adverse claims and lapse experience. These factors were only partially offset
by the favourable impact of the increase in equity markets on variable
universal life capitalized fees and reduced new business strain, mostly as a
result of product changes. On a Canadian dollar basis, the loss for the second
quarter was $631 million, compared to earnings of $223 million reported a year
earlier. The year-to-date loss was US$615 million compared to earnings of
US$429 million in 2008.
    Premiums and deposits for the quarter were US$1.7 billion, up three per
cent from US$1.6 billion for the second quarter of 2008 due to in-force
premium growth in John Hancock Long-Term Care and higher premiums in universal
life dampened by lower variable life deposits.
    Funds under management were US$58.2 billion, up one per cent from June
30, 2008 as business growth was partially offset by a decrease in the market
value of the variable life segregated funds.

    
    U.S. Wealth Management

                                                        Quarterly Results
    Canadian dollars                                  2Q09     1Q09     2Q08
                                                    -------------------------
    Shareholders' Net Income (Loss) (millions)       1,551     (629)     271
    Premiums & Deposits (millions)                   7,956    8,660    8,648
    Funds under Management (billions)                170.6    164.1    172.7
                                                    -------------------------

                                                        Quarterly Results
    U.S. dollars                                      2Q09     1Q09     2Q08
                                                    -------------------------
    Shareholders' Net Income (Loss) (millions)       1,329     (505)     268
    Premiums & Deposits (millions)                   6,817    6,952    8,561
    Funds under Management (billions)                146.7    130.2    169.5
                                                    -------------------------
    

    U.S. Wealth Management's earnings for the second quarter of 2009 were
US$1,329 million, compared with earnings of US$268 million reported a year
earlier. Earnings increased significantly due to improved market performance
on segregated fund guarantee reserves partially offset by unfavourable
investment results and reduced fee income on lower funds under management. On
a Canadian dollar basis, earnings for the second quarter were $1,551 million,
up $1,280 million from $271 million reported a year earlier. Year-to-date
earnings were US$824 million compared to US$416 million in 2008.
    Premiums and deposits for the quarter were US$6.8 billion, down 20 per
cent from US$8.6 billion for the second quarter of 2008. The decline was due
to the impact of the equity market and economic downturn on sales in John
Hancock Wealth Asset Management and John Hancock Variable Annuities. These
declines were partially offset by an increase in John Hancock Fixed Products
sales.
    Funds under management were US$146.7 billion, down 13 per cent from June
30, 2008, as a result of the prior twelve month cumulative effect of
unfavourable equity markets and US$4.1 billion of scheduled maturities in
Fixed Products. These declines were partially offset by net policyholder cash
inflows of US$6.7 billion in Variable Annuities and Wealth Asset Management.

    
    Canadian Division

                                                        Quarterly Results
    Canadian dollars                                  2Q09     1Q09     2Q08
                                                    -------------------------
    Shareholders' Net Income (Loss) (millions)         336      (88)     302
    Premiums & Deposits (millions)                   4,316    4,430    4,090
    Funds under Management (billions)                 91.2     83.8     87.6
                                                    -------------------------
    

    Canadian Division's shareholders' net income for the second quarter of
2009 was $336 million, up $34 million from $302 million reported a year ago.
The increase driven by good operational results with strong claims experience,
focused expense management and business growth, and to a modest extent was
partially offset by adverse lapse experience. The increase due to improved
market performance on segregated fund guarantee reserves was offset by net
investment related losses in the quarter and lower allocated interest on
surplus. Because a portion of the investment related gains were subject to
lower tax rates than were the investment related losses, the division has a
net tax recovery in the quarter. Year-to-date shareholders' net income was
$248 million compared to $556 million in 2008.
    Premiums and deposits for the quarter were $4.3 billion, up six per cent
from $4.1 billion for the second quarter of 2008. These results reflect strong
increases in fixed rate wealth management products as consumers continued to
seek the safety of fixed returns in light of continuing market volatility, and
growth in the Group Benefits business. Overall growth was tempered by a nine
per cent decline in variable product deposits.
    Funds under management grew by four per cent, or $3.6 billion, to $91.2
billion as at June 30, 2009. Strong growth in lending volumes drove a 38 per
cent rise in Manulife Bank's invested assets, which together with positive net
sales of wealth management and insurance products, more than offset the impact
of equity market deterioration as compared to a year ago.

    
    Asia and Japan Division

                                                        Quarterly Results
    Canadian dollars                                  2Q09     1Q09     2Q08
                                                    -------------------------
    Shareholders' Net Income (millions)                885      146      215
    Premiums & Deposits (millions)                   2,477    2,846    2,590
    Funds under Management (billions)                 56.5     53.6     43.7
                                                    -------------------------

                                                        Quarterly Results
    U.S. dollars                                      2Q09     1Q09     2Q08
                                                    -------------------------
    Shareholders' Net Income (millions)                758      118      212
    Premiums & Deposits (millions)                   2,122    2,286    2,565
    Funds under Management (billions)                 48.6     42.5     42.9
                                                    -------------------------
    

    Asia and Japan Division's shareholders' net income for the second quarter
of 2009 was US$758 million, up US$546 million from US$212 million a year
earlier. Gains recorded on the variable annuity business in Japan as a result
of the improved equity market performance were partially offset by pooled
investment losses and lower fee income on lower assets under management in the
pension and wealth management businesses in Hong Kong. On a Canadian dollar
basis, net income was $885 million, up $670 million from a year ago. Because a
portion of the investment related gains were subject to lower tax rates than
were investment related losses, the division has a net tax recovery in the
quarter. Year-to-date shareholders' net income was US$876 million compared to
US$398 million in 2008.
    Premiums and deposits for the quarter were US$2.1 billion, down 17 per
cent from US$2.6 billion for the second quarter of 2008. The 13 per cent
growth in insurance premiums from in-force business growth and new product
launches and additional mutual fund sales from the asset management company in
Taiwan acquired at the end of 2008 were more than offset by the lower variable
annuity sales in Japan due to volatile equity markets and product changes.
    Funds under management were US$48.6 billion, up 13 per cent from June 30,
2008. Growth was driven by net policyholder cash inflows of US$4.3 billion
partly offset by the negative impact of declining equity markets in the past
twelve months.

    
    Reinsurance Division

                                                        Quarterly Results
    Canadian dollars                                  2Q09     1Q09     2Q08
                                                    -------------------------
    Shareholders' Net Income (millions)                 45       59       46
    Premiums (millions)                                292      285      287
                                                    -------------------------

                                                        Quarterly Results
    U.S. dollars                                      2Q09     1Q09     2Q08
                                                    -------------------------
    Shareholders' Net Income (millions)                 38       48       45
    Premiums (millions)                                250      229      284
                                                    -------------------------
    

    Reinsurance Division's net income for the second quarter of 2009 was
US$38 million, down US$7 million from US$45 million reported a year earlier.
Unfavourable investment results were partially offset by more favourable
claims experience in the Life Reinsurance business and by the favourable
impact of the increase in the U.S. equity markets on the change in segregated
fund guarantee liabilities. On a Canadian dollar basis, earnings for the
second quarter were $45 million, down $1 million from $46 million reported a
year earlier. Year-to-date earnings were US$86 million, compared to US$118
million in 2008.
    Premiums for the quarter were US$250 million, down US$34 million or 12
per cent from US$284 million for the second quarter of 2008. Life Reinsurance
premiums declined as a result of higher experience refunds and International
Group Program premiums declined as a result of the weakened Euro against the
U.S. dollar. On a Canadian dollar basis, premiums for the quarter were $292
million, up 2 per cent from $287 million reported in the second quarter of
2008.

    
    Corporate and Other

                                                        Quarterly Results
    Canadian dollars                                  2Q09     1Q09     2Q08
                                                    -------------------------
    Shareholders' Net Loss (millions)                 (412)    (464)     (49)
    Funds under Management (billions)                 32.2     30.1     35.3
    

    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 $412 million for the second
quarter of 2009, compared to a loss of $49 million a year earlier. Included in
these results are tax related provisions on leveraged lease investments of
$139 million (2008 - $ 32 million) and reported charges for changes in
actuarial methods and assumptions of $87 million (2008 - $ 11 million). The
remaining variance of $180 million includes other than temporary impairments
(OTTI) of $53 million on our available-for-sale equity portfolio compared to
net realized gains in 2008 of $58 million (realized gains of $70 million,
offset by impairments of $12 million) as well as credit losses of $82 million
(2008 - $1 million). The year-to-date loss is $876 million compared to a loss
of $51 million in 2008.
    Funds under management were $32.2 billion, down nine per cent or $3.1
billion from June 30, 2008. This decrease is primarily due to higher assets
allocated to the operating divisions and market value declines in the equity
and bond portfolios, partially offset by the strengthening U.S. dollar as well
as funds received from debt and share capital issuance in the past twelve
months.

    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:
Earnings excluding items below (referred to above in the Components of
Earnings table under "Financial Highlights - Net Income"); Normalized
Earnings, Return on common shareholders' Equity; Premiums and Deposits; Funds
under Management; and Capital. 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 an other financial information prepared in
accordance with GAAP
    The Company has calculated Earnings before the items below (as referred
to above)in accordance with the methods outlined under "Financial Highlights -
Net Income" above and believes that this measure is useful to investors to
enable them to perform meaningful comparisons between periods.
    The Company has estimated Normalized Earnings, which constitutes
forward-looking information, in accordance with the methods outlined under
"Financial Highlights - Normalized Earnings" above. The Company believes this
measure is useful to investors given the current economic conditions including
the volatility of equity markets, interest rates and other factors.
    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.
    Premiums and deposits is a measure of the top line growth. The Company
calculates premiums and deposits as the aggregate of (i) general fund premiums
net of reinsurance, reported as premiums on the Statement of Operations, (ii)
segregated fund deposits, excluding seed money, (iii) mutual fund deposits,
(iv) deposits into institutional advisory accounts and (v) premium equivalents
for administration only group benefit contracts and (vi) premiums in the
Canadian Group Benefit reinsurance ceded agreement, and (vii) other deposits
in other managed funds.
    Funds under Management are a measure of the size of the Company. It
represents the total of the invested asset base that the Company and its
customers invest in.
    The definition we use for the capital serves as a foundation of our
capital management activities at the MFC level. For regulatory reporting
purposes, the numbers are further adjusted for various additions or deductions
to capital as mandated by the guidelines used by OSFI. Capital is calculated
as the sum of: Total equity excluding Accumulated other Comprehensive Income
on available for sale securities; Non-controlling interest in subsidiaries;
and Liabilities for preferred shares and capital instruments excluding $550
million of subordinated debentures issued to Manulife Finance (Delaware) LLC.

    About Manulife Financial

    Manulife Financial is a leading Canadian-based financial services group
serving millions of customers in 22 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$420.9 billion
(US$362.0 billion) as at June 30, 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 Second Quarter Earnings
Results Conference Call at 2:00 p.m. ET on August 6, 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 August
6, 2009 until August 20, 2009 by calling (416) 695-5800 or (800) 408-3053
(passcode 3274827 followed by the number sign).
    The conference call will also be webcast through Manulife Financial's
website at 2:00 p.m. ET on August 6, 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 Second 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 include, but are not limited to, statements with respect of our
estimated quarterly normalized earnings and the potential impact on net income
of our annual review of actuarial assumptions referred to above under
"Financial Highlights - Net Income". The forward-looking statements in this
document also 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", "embark" 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
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, 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; changes
in laws and regulations; accuracy of information received from counterparties
and the ability of counterparties to meet their obligations; accuracy of
estimates used in applying 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;
level of competition and consolidation; the ability to adapt products and
services to the changing market; the ability to attract and retain key
executives; acquisitions and the ability to complete acquisitions including
the availability of equity and debt financing for this purpose; the ability to
execute strategic plans and changes to 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
                                                          June 30
                                                  2009       2008   % Change
    -------------------------------------------------------------------------
    Net income                                $  1,784   $    998         79
      Net income (loss) attributed to
       participating policyholders                  10        (10)         -
    -------------------------------------------------------------------------
    Net income attributed to shareholders     $  1,774   $  1,008         76
      Preferred share dividends                    (16)        (8)       100
    -------------------------------------------------------------------------
    Net income available to common
     shareholders                             $  1,758   $  1,000         76
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Premiums and deposits:
      Life and health insurance premiums(1)   $  3,591   $  3,865         (7)
      Annuity and pension premiums               2,129      1,507         41
      Segregated fund deposits                   7,391      8,472        (13)
      Mutual fund deposits                       2,141      2,664        (20)
      Institutional advisory account deposits    2,190      1,431         53
      ASO premium equivalents                      662        621          7
      Group Benefits ceded(1)                      932          -          -
      Other fund deposits                          160        133         20
    -------------------------------------------------------------------------
    Total premiums and deposits               $ 19,196   $ 18,693          3
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Funds under management:
      General fund                            $188,332   $164,445         15
      Segregated funds                         177,511    175,746          1
      Institutional advisory accounts           21,956     21,288          3
      Mutual funds                              26,435     32,094        (18)
      Other funds                                6,621      6,725         (2)
    -------------------------------------------------------------------------
    Total funds under management              $420,855   $400,298          5
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Capital
      Liabilities for preferred shares and
       qualifying capital instruments         $  3,084   $  3,024          2
      Non-controlling interest in
       subsidiaries                                209        167         25
      Equity
        Participating policyholders' equity         69         64          8
        Shareholders' equity
          Preferred shares                       1,419        638        122
          Common shares                         16,250     13,958         16
          Contributed surplus                      169        152         11
          Retained earnings(2)                  12,693     15,083        (16)
          Accumulated other comprehensive
           loss on AFS securities and
           translation of net foreign
           operations                           (2,815)    (5,025)       (44)
    -------------------------------------------------------------------------
    Total capital                             $ 31,078   $ 28,061         11
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Selected key performance measures:
      Basic earnings per common share         $   1.09   $   0.67
      Diluted earnings per common share       $   1.09   $   0.66
      Return on common shareholders'
       equity (annualized)(3)                    26.9%      17.0%
      Book value per common share             $  16.23   $  16.14
      Common shares outstanding (in millions)
        End of period                            1,614      1,495
        Weighted average - basic                 1,611      1,497
        Weighted average - diluted               1,616      1,508

    (1) At the end of the first quarter of 2009, Canadian Group Benefits
        entered into an external reinsurance agreement which resulted in a
        substantial reduction in net premium revenue reported in the income
        statement. The Company continues to retain certain benefits and
        certain risks on this business and the associated direct premiums
        continue to be included in the overall premiums and deposits metric
        as "Group Benefits ceded".

    (2) 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.

    (3) 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
                                                                 June 30
                                                             2009       2008
    -------------------------------------------------------------------------
    Revenue
    Premium income(1)                                    $  5,720   $  5,372
    Investment income
      Investment income                                     2,061      2,230
      Realized/unrealized gain (losses)
       on assets supporting policy
       liabilities and consumer notes                       2,145     (1,462)
    Other revenue                                           1,459      1,418
    -------------------------------------------------------------------------
    Total revenue                                        $ 11,385   $  7,558
    -------------------------------------------------------------------------
    Policy benefits and expenses
    To policyholders and beneficiaries
      Death, disability and other claims(1)              $  1,139   $  1,606
      Maturity and surrender benefits                       1,921      1,903
      Annuity payments                                        798        723
      Policyholder dividends and
       experience rating refunds                              330        353
      Net transfers to segregated funds                       705        443
      Change in actuarial liabilities(2)                    2,016     (1,368)
    General expenses                                          921        876
    Investment expenses                                       237        233
    Commissions                                             1,016      1,100
    Interest expense                                          543        273
    Premium taxes                                              62         66
    Non-controlling interest in subsidiaries                    2          5
    -------------------------------------------------------------------------
    Total policy benefits and expenses                   $  9,690   $  6,213
    -------------------------------------------------------------------------
    Income before income taxes                           $  1,695   $  1,345
    Income tax recovery (expense)                              89       (347)
    -------------------------------------------------------------------------
    Net income                                           $  1,784   $    998
      Net income (loss) attributed to participating
       policyholders                                           10        (10)
    -------------------------------------------------------------------------
    Net income attributed to shareholders                $  1,774   $  1,008
      Preferred share dividends                               (16)        (8)
    -------------------------------------------------------------------------
    Net income available to common shareholders          $  1,758   $  1,000
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic earnings per common share                      $   1.09   $   0.67
    Diluted earnings per common share                    $   1.09   $   0.66

    (1) At the end of the first quarter of 2009, Canadian Group Benefits
        entered into an external reinsurance agreement which resulted in a
        substantial reduction in net premium revenue reported in the income
        statement. The Company continues to retain certain benefits and
        certain risks on this business.

    (2) Includes impact of scheduled maturities in John Hancock Fixed
        Products institutional annuity contracts of $0.7 billion in Q2 2009
        and $0.5 billion in Q2 2008.



    Consolidated Balance Sheets
    (Canadian $ in millions, unaudited)

                                                             As at June 30
    Assets                                                2009(1)     2008(1)
    -------------------------------------------------------------------------
    Invested assets
    Cash and short-term securities                       $ 17,110   $ 12,196
    Securities
      Bonds                                                83,725     72,195
      Stocks                                                9,688     11,175
    Loans
      Mortgages                                            31,379     27,637
      Private placements                                   24,701     22,670
      Policy loans                                          7,090      6,133
      Bank loans                                            2,458      2,257
    Real estate                                             6,228      5,278
    Other investments                                       5,953      4,904
    -------------------------------------------------------------------------
    Total invested assets                                $188,332   $164,445
    -------------------------------------------------------------------------
    Other assets
    Accrued investment income                            $  1,667   $  1,420
    Outstanding premiums                                      771        691
    Goodwill                                                7,608      6,882
    Intangible assets                                       2,015      1,821
    Derivatives                                             3,713      2,227
    Miscellaneous                                           3,662      2,585
    -------------------------------------------------------------------------
    Total other assets                                   $ 19,436   $ 15,626
    -------------------------------------------------------------------------
    Total assets                                         $207,768   $180,071
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Segregated funds net assets                          $178,161   $176,395
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and equity
    -------------------------------------------------------------------------
    Policy liabilities                                   $143,848   $125,570
    Deferred realized net gains                               113        106
    Bank deposits                                          14,483     10,704
    Consumer notes                                          1,486      1,894
    Long-term debt                                          4,296      2,775
    Future income tax liability                             1,552      2,595
    Derivatives                                             3,319      2,053
    Other liabilities                                       7,142      6,364
    -------------------------------------------------------------------------
                                                         $176,239   $152,061

    Liabilities for preferred shares and capital
     instruments                                            3,634      3,024
    Non-controlling interest in subsidiaries                  209        167

    Equity
      Participating policyholders' equity                      69         64
      Shareholders' equity
        Preferred shares                                    1,419        638
        Common shares                                      16,250     13,958
        Contributed surplus                                   169        152
        Retained earnings                                  12,693     15,083
        Accumulated other comprehensive loss               (2,914)    (5,076)
    -------------------------------------------------------------------------
    Total equity                                         $ 27,686   $ 24,819
    -------------------------------------------------------------------------
    Total liabilities and equity                         $207,768   $180,071
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Segregated funds net liabilities                     $178,161   $176,395
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (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 June 30, 2009
                                ---------------------------------------------
                                                U.S.
                                     U.S.      Wealth               Asia and
    Premiums and deposits         Insurance  Management  Canadian     Japan
    -------------------------------------------------------------------------
    General fund premiums(1)       $  1,674   $  1,660   $  1,078   $  1,016
    Segregated fund deposits            288      4,482      1,536      1,082
    Mutual fund deposits                  -      1,654        108        379
    Institutional advisory
     account deposits                     -          -          -          -
    ASO premium equivalents               -          -        662          -
    Group Benefits ceded(1)               -          -        932          -
    Other fund deposits                   -        160          -          -
    -------------------------------------------------------------------------
    Total                          $  1,962   $  7,956   $  4,316   $  2,477
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income (loss)              $   (631)  $  1,551   $    336   $    895
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Funds under management                      As at June 30, 2009
    -------------------------------------------------------------------------
    General fund                   $ 57,408   $ 38,488   $ 56,834   $ 25,336
    Segregated funds                 10,244    106,547     31,860     26,199
    Institutional advisory
     accounts                             -          -          -          -
    Mutual funds                          -     22,236      2,540      1,659
    Other funds                           -      3,285          -      3,336
    -------------------------------------------------------------------------
    Total                          $ 67,652   $170,556   $ 91,234   $ 56,530
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                            For the quarter ended June 30, 2009
                           ---------------------------------------
                                              Corporate
                                                 and
    Premiums and deposits         Reinsurance   Other      Total
    --------------------------------------------------------------
    General fund premiums(1)       $    292   $      -   $  5,720
    Segregated fund deposits              -          3      7,391
    Mutual fund deposits                  -          -      2,141
    Institutional advisory
     account deposits                     -      2,190      2,190
    ASO premium equivalents               -          -        662
    Group Benefits ceded(1)               -          -        932
    Other fund deposits                   -          -        160
    --------------------------------------------------------------
    Total                          $    292   $  2,193   $ 19,196
    --------------------------------------------------------------
    --------------------------------------------------------------

    Net income (loss)              $     45   $   (412)  $  1,784
    --------------------------------------------------------------
    --------------------------------------------------------------

    Funds under management               As at June 30, 2009
    --------------------------------------------------------------
    General fund                   $  2,704   $  7,562   $188,332
    Segregated funds                      -      2,661    177,511
    Institutional advisory
     accounts                             -     21,956     21,956
    Mutual funds                          -          -     26,435
    Other funds                           -          -      6,621
    --------------------------------------------------------------
    Total                          $  2,704   $ 32,179   $420,855
    --------------------------------------------------------------
    --------------------------------------------------------------



                                     For the quarter ended June 30, 2008
                                ---------------------------------------------
                                                U.S.
                                     U.S.      Wealth               Asia and
    Premiums and deposits         Insurance  Management  Canadian     Japan
    -------------------------------------------------------------------------
    General fund premiums          $  1,339   $  1,315   $  1,668   $    763
    Segregated fund deposits            308      4,799      1,644      1,721
    Mutual fund deposits                  -      2,401        157        106
    Institutional advisory
     account deposits                     -          -          -          -
    ASO premium equivalents               -          -        621          -
    Other fund deposits                   -        133          -          -
    -------------------------------------------------------------------------
    Total                          $  1,647   $  8,648   $  4,090   $  2,590
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net income (loss)              $    223   $    271   $    297   $    210
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Funds under management                      As at June 30, 2008
    -------------------------------------------------------------------------
    General fund                   $ 47,611   $ 34,404   $ 51,898   $ 16,656
    Segregated funds                 10,869    107,438     32,524     22,294
    Institutional advisory
     accounts                             -          -          -          -
    Mutual funds                          -     27,198      3,219      1,677
    Other funds                           -      3,642          -      3,083
    -------------------------------------------------------------------------
    Total                          $ 58,480   $172,682   $ 87,641   $ 43,710
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                            For the quarter ended June 30, 2008
                           ---------------------------------------
                                              Corporate
                                                 and
    Premiums and deposits         Reinsurance   Other      Total
    --------------------------------------------------------------
    General fund premiums          $    287   $      -   $  5,372
    Segregated fund deposits              -          -      8,472
    Mutual fund deposits                  -          -      2,664
    Institutional advisory
     account deposits                     -      1,431      1,431
    ASO premium equivalents               -          -        621
    Other fund deposits                   -          -        133
    --------------------------------------------------------------
    Total                          $    287   $  1,431   $ 18,693
    --------------------------------------------------------------
    --------------------------------------------------------------

    Net income (loss)              $     46   $    (49)  $    998
    --------------------------------------------------------------
    --------------------------------------------------------------

    Funds under management               As at June 30, 2008
    --------------------------------------------------------------
    General fund                   $  2,532   $ 11,344   $164,445
    Segregated funds                      -      2,621    175,746
    Institutional advisory
     accounts                             -     21,288     21,288
    Mutual funds                          -          -     32,094
    Other funds                           -          -      6,725
    --------------------------------------------------------------
    Total                          $  2,532   $ 35,253   $400,298
    --------------------------------------------------------------
    --------------------------------------------------------------

    (1) At the end of the first quarter of 2009, Canadian Group Benefits
        entered into an external reinsurance agreement which resulted in a
        substantial reduction in net premium revenue reported in the income
        statement. The Company continues to retain certain benefits and
        certain risks on this business and the associated direct premiums
        continue to be included in the overall premiums and deposits metric
        as "Group Benefits ceded".

    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: David Paterson, (416)
852-8899, David_Paterson@manulife.com; 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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