With a slim 1 per cent share of the total market, Manulife Teda ranks 31st in a crowded field of roughly 60 competitors. As foreign firms crowd into the market, observers warn that some will be disappointed. "The latest potential downside for succeeding in China comes from the simple fact that China is now a high-profile subject within many foreign firms. All too often, there are too many cooks in the kitchen," writes Z-Ben Advisors, a Shanghai-based consulting firm.
But at least Manulife is in the game. Peter Alexandra, principal at Z-Ben Advisors, believes the insurer has achieved a coup by scooping up the last full 49 per cent stake in a Chinese fund manager that is likely to come up for sale in a market that everyone wants to enter. "No matter what difficulties or what possible buyers remorse Manulife might have at any point in time, they bought the last 49 per cent stake in China," he says.
The question is when Manulife's Chinese operations will start to deliver significant profits to the company's coffers. Excluding the company's sizable and profitable operations in Japan, only about 15 per cent of the insurer's 2009 profit came from the Asia-Pacific region.
The vast majority of those earnings - 93 per cent - originated in Hong Kong. Each of Indonesia, Singapore and the Philippines were individually more profitable than mainland China, according to RBC Dominion Securities analyst André-Philippe Hardy.
For all the high hopes around mainland China, the profit it produces for Manulife is still not much more than a rounding error on the company's earnings statement. When one analyst was asked whether Manulife's Chinese operations will ever become a significant source of earnings for the beleaguered insurer, he said yes - but he expects to be sitting at a bingo table with a bib on when it finally happens.
Even Manulife's own executives are skeptical that China can become a major profit driver during their careers. They talk about building a growth engine for the next generation of employees.
At a banquet for top Manulife-Sinochem agents at Shanghai's Gran Melia Hotel, Mr. Guloien and the company's directors posed for endless photos with the employees, who treated them like rock stars.
When Marc Sterling, Manulife-Sinochem's chairman, took the microphone on stage, he told the audience that the insurer is only scratching the surface thus far.
"We will be an enormous company," he says. "And you should let the board of directors know that we want to be the biggest company in Manulife."
MANULIFE IN CHINA
Nov. 26, 1996: Manulife-Sinochem holds a grand opening ceremony to mark its launch as the first foreign joint venture life insurer in China. Canadian Prime Minister Jean Chrétien and former Chinese Premier Li Peng attend the ribbon cutting.
February, 1999: Manulife-Sinochem's headquarters move to 21F, Jinmao Tower in Shanghai, then the tallest building in China.
2001: The company issues its 100,000th insurance contract.
2002: Manulife-Sinochem wins approval from the China Insurance Regulatory Commission to officially open its branch office in Guangzhou, the first branch licence granted to a foreign joint venture life insurer.
October, 2003: Mr. Chrétien attends the ribbon-cutting ceremony at Manulife-Sinochem's Beijing branch.
August, 2005: Manulife-Sinochem officially launches its group insurance business.
November, 2009: Less than a week after Manulife stuns investors with the news that it is selling common equity to shore up its capital levels, the insurer pays $156-million (U.S.) for a 49 per cent stake in ABN Amro TEDA Fund Management Co., a Chinese fund company.