Manulife Financial announces record annual and quarterly results

Earnings per share increase 15 per cent from the prior year
Earnings of $1,546 million a record level for Canadian life insurers

TORONTO Manulife Financial Corporation today reported record shareholders net income of $1,546 million for 2003, an increase of 12 per cent over 2002. Earnings per share were $3.33 in 2003, 15 per cent higher than the $2.90 reported for 2002. Return on common shareholders equity for the year was 17.7 per cent, exceeding the Companys target of 16 per cent. The excellent results were driven by the resurgence in the equity markets in 2003, good business growth, favourable claims experience in Canada and Japan, and continued tight expense management, partially offset by the impact of a strengthened Canadian dollar, which reduced shareholders net income for the year by an estimated $92 million.

Fourth quarter 2003 earnings were also a record with:

o     Shareholders' net income of $428 million, 15 per cent higher than the same period in 2002;

o     Earnings per share of $0.92, an increase of 15 per cent from the fourth quarter of 2002; and

o     Return on common shareholders' equity of 19.1 per cent this quarter.

The increase in earnings reflects the favourable impact of stronger equity markets, business growth in both the insurance and wealth management businesses and good expense management. Earnings growth was dampened by the continued appreciation in the Canadian dollar and higher new business strain in the United States.

Total premiums and deposits were $30.7 billion for the full year 2003 and $8.1 billion in the fourth quarter, increases of four per cent and nine per cent, respectively, over the comparable prior year periods. On a constant currency basis, premiums and deposits increased by 13 per cent for the year and 24 per cent for the fourth quarter. Funds under management were $156.7 billion as at December 31, 2003, up seven per cent from a year ago, despite an $18.8 billion negative impact due to the strength of the Canadian dollar.

We are very pleased to have delivered our tenth consecutive year of record earnings and to have achieved our medium term targets of 15 per cent growth in earnings per share and 16 per cent return on shareholders equity, said Dominic DAlessandro, President and Chief Executive Officer of Manulife Financial. Over the past 10 years, the Company has grown its earnings at a compound annual growth rate of 24 per cent. Manulife Financial is extremely well positioned in all of its businesses as we enter a milestone year with the expected merger with John Hancock.

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Embedded Value

Manulife Financial also disclosed its embedded value for 2003 today. As at December 31, 2003, the Companys embedded value was $18.0 billion, before adjustments for discount rate, currency and shareholder dividends. On a per share basis, embedded value, before adjustments for discount rate, currency, shareholder dividends and share repurchases, increased 20 per cent to $38.94 from $32.46 a year earlier. New business embedded value of $903 million was 36 per cent higher than the prior year reflecting strong sales in North American insurance operations and in the Asian wealth management businesses.

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