Manulife senior executives gathered with analysts and investors on Friday to outline how the insurer hopes to raise its annual profit to $4-billion and its return on equity to 13 per cent by 2015.
The strategy hinges on success in Asia – where the firm believes it has built up an enviable position, and which it describes as its growth engine for the 21st century – as well as wealth management sales.
And there will be changes to the structure of management compensation to help ensure the firm stays on course, CEO Don Guloien said during an interview.
“The question that investors often ask – so we decided to head it off – is ‘that’s a nice trajectory, but are you willing to be compensated on the basis of those plans?’ And the answer is yes.”
Manulife is still facing a number of challenges that could waylay its efforts, including upcoming changes to regulations and accounting rules. Representatives from Canada’s largest insurers and Canadian accounting standard setters are meeting next week with Sir David Tweedie, the chairman of the London-based International Accounting Standards Board, as the Canadian sector seeks to kill proposed accounting changes that could have a large negative impact on insurers here.
Continued low interest rates and outsized equity exposure also continue to pose problems for Manulife.
Nevertheless, “I’m getting more comfortable that we’re putting our issues behind us and what we’re going to experience is a nice period of healthy growth,” Mr. Guloien said. “And I hope for more positive than negative surprises for our investors going forward.”