Manulife (NYSE:MFC) has focused on Asia as a key development area for quite some time now, and the company saw record sales in the region during the first quarter of 2012 (See Manulife Delivers In Asia Yet Again). It also has plans to double its insurance agents to capitalize on the growing middle class income group in the region. 
Over the next five years, around 85% of the world’s middle class population is expected to reside in Asia as the geography experiences a period of economic prosperity. With growth in the region faster than in North America, Manulife’s operations are concentrated on Asia, and Asian insurance and wealth management operations account for 26% of our price estimate of Manulife’s stock.
Explorers Of The Unknown
Manulife recently became the first foreign insurer to enter Cambodia, as it opened its head office in Phnom Penh, last week.  The nascent market has a population of around 15 million and a growing middle class, which has benefited from recent investments from South Korea and China. Manulife has already established base of operation in neighboring countries, Indonesia and Vietnam and will offer wealth management and retirement products, along with an information campaign to educate the demographic about the benefits of insurance and investment. Operations have started with 40 employees in the Cambodian office, with plans to add insurance agents and reach 1,000 employees in the next 3 years. The Asia Life and Health Insurance Premium Market is expected to grow through the next few years as illustrated in the interactive chart below.
Manulife has also entered the second round of bidding for ING’s Asian operations, as competitors Prudential Financial (NYSE:PRU) and MetLife (NYSE:MET backed out of the deal.  The acquisition, should it go through, would allow the company to enter the Korean market where it is currently facing regulatory problems regarding licenses. We expect Manulife’s investments in Asia to fuel an increase in the company’s share of Asia Life and Health Insurance Market Analysis.
We have a price estimate of $13 for Manulife’s stock, about 20% above the current market price. You can gauge the impact of a change in forecasts on our estimate, by modifying the charts above.Notes:
- Manulife Doubling Asia Agents as Region’s Profit Swells, Bloomberg, Jun 11th, 2012 [↩]
- INTERVIEW: Manulife’s Wong Ramps Up in Cambodia, Wall Street Journal, June 28th, 2012 [↩]
- Manulife Said in Second Round of ING Asia Insurance Bidding, Bloomberg, 31st May, 2012 [↩]