Manulife Financial Corporation (TSX:MFC) adopts a customer-first approach by utilizing new technological innovations to provide a better experience for its client base
SmallCapPower | April 23, 2018: Manulife Financial Corporation (TSX:MFC) is a leading financial services group offering financial advice, insurance, as well as wealth and asset management solutions for individuals, groups and institutions in Asia, Canada, and the United States. It operates as John Hancock in the United States and Manulife in other jurisdictions. The Company has over 34,000 employees, 73,000 agents, and thousands of distribution partners, serving more than 26 million customers at the end of 2017. Established in 1887, Manulife Financial Corporation is headquartered in Toronto, Canada. It trades under the ticker ‘MFC’ on the Toronto, New York, and the Philippine stock exchanges and under ‘945’ in Hong Kong.
Manulife has diversified businesses across the globe. The customer-focus measures are aimed at retaining customers and, thereby, increasing its base gradually. The stock currently trades with an equity market capitalization of $46.2 billion on the TSX, commanding a price-to-book multiple of 1.2x.
Investment Thesis
- Diversified business model
- Customer-centric approach
Diversified business model
Manulife Financial has a diversified business model offering a diverse suite of financial products and services in both developed and emerging economies on a global basis. Diversity in geography, product, and distribution are key contributors to the Company’s financial strength.
Manulife Financial has significant international presence with its main operations in Asia, Canada and the United States, which permits the Company to leverage people, products, technology and expertise across markets thereby leading to effective risk diversification. The Company’s multi-country presence enables it to widen its brand recognition, gain synergies and benefit from economies of scale. Overall, this structure provides stability in earnings and a broadly diversified balance sheet.
Manulife Financial’s wide range of products and services caters to the current and future needs of individual and group customers. Financial protection products and services include individual life insurance, group life, health and disability insurance, and long-term care. Wealth management products and services include group retirement, annuities, mutual funds, exchange-traded funds (ETFs), unit linked products, institutional asset management and private banking.
Manulife reaches its customers through a well-diversified distribution platform comprising independent advisors, contracted agents, financial planners, brokers, and other partners. The Company strives to widen its channels worldwide so that it meets the differing needs of an international base of customers.
Customer-centric approach
Manulife adopts a customer-first approach by utilizing new technological innovations to provide a better experience for its client base by making their health and wealth decisions easier. Their offerings include Twine (first-ever direct-to-consumer advice product, allowing couples to set and work towards their financial goals), Manulife on Amazon Alexa (Manulife group benefits plan members can use the Manulife Benefits Skill with any Amazon Alexa-enabled device to inquire about important account information), ZOOM exchange (online learning and idea-sharing portal), Customer ZOOM (mobile app empowering employees for resolving issues and fuel positive change for customers) etc.
Manulife Financial is the first Canadian insurer to provide customers with the option of submitting all group claims, including disability through online, mobile, or traditional channels.
For Chinese customers, the Company has enabled submission of group benefits claims through WeChat. In Asia, Manulife has launched Customer FIRST, which is a cultural program intended to transform the Company into one that it more customer-centric. Manulife Financial is also contributing to the social, environmental and economic well-being of the communities through several programs and campaigns such as United Way, ParticipACTION 150 etc.
Outlook and Valuation
Manulife Financial stock currently trades at a market capitalization of approximately $46 billion on the TSX with a price-to-book multiple of 1.2x. The Company’s diversified business model, international presence, technological innovations, and customer-centric approach make it a good global investment story.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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