Manulife Could See $13.50 with Broader Asian Presence

Manulife Financial (NYSE:MFC) is looking to expand its sales force in Southeast Asia by as much as 30% a year to meet the rapidly growing demand for life insurance and wealth management products in this region. A robust distribution network is essential to capture the market and Manulife is focused on building its distribution through professional agents and bancassurance relationships. It already has about 25,000 agents Southeast Asia which it expects to grow distribution by about 30% a year since the premiums are also growing at roughly the same rate. ^[1]

We have a price estimate of $13.56 on Manulife’s stock, about 25% above the current market price.

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Apart from Southeast Asia, Manulife is also looking to expand its business in mainland China. The company recently signed a two year agreement with the Bank of China to strength its business relationship. The agreement provides Manulife the opportunity to distribute insurance products at the bank’s branches in Beijing, Shanghai, Shenzhen, Guangdong, Jiangsu and Zhejiang. ^[2]

Manulife’s bancassurance relationships in Asia will be a key driver of growth. In the first nine months of this year, insurance sales in Asia jumped 22% compared to the year earlier period. Asia now accounts for 55% for Manulife’s total insurance sales. Manulife’s Asia’s strategy is crucial given the mature North American markets and its troubled John Hancock unit in the U.S.

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1. Manulife to expand sales force in Southeast Asia, Market Watch, Nov 23, 2011 [↩]
2. Manulife expands ties with Bank of China, Market Watch, Nov 9, 2011 [↩]