The Manulife group of companies operating in Hong Kong and Macau ("Manulife Hong Kong") announced financial results for the fourth quarter and full year of 2020. Despite headwinds from the COVID-19 pandemic, both fourth-quarter and full-year core earnings grew 10% year-on-year to a record high driven by strong execution and momentum of its agency force.
Damien Green, CEO of Manulife Hong Kong and Macau, said, “We delivered record-level core earnings in both reporting periods. Faced with an enormous, year-long challenge, this is a true reflection of resilience of our team and the strength of the Manulife Hong Kong franchise. Over the year our team was impeccable in its execution driven by a winning mindset at all times.”
“Our agency force, in particular, was truly outstanding in 2020,” continued Mr. Green. “Agency remains our key distribution channel, making up 70% of APE sales in 2020. Compared with the record year in 2019, our Agency APE sales performed very strongly in 2020 and were down only 2%. Our agency APE sales saw a rebound in November and December driven by factors including strong productivity. Our active recruitment drive also helped us deliver an agency headcount growth of 6% year over year and we finished 2020 with a new record of 10,706 agents.”
Manulife Hong Kong’s Results Overview:
Core earnings
- Core earnings of HK$6.3 billion in 2020, up 10% from 2019, and HK$1.8 billion in 4Q 2020, up 10% from 4Q 2019
Annualized premium equivalent (APE) sales
- APE sales of HK$6.0 billion in 2020, down 10% from 2019, and HK$1.5 billion in 4Q 2020, down 15% from 4Q 2019
New business value (NBV)
- NBV of HK$3.6 billion in 2020, down 14% from 2019, and HK$1.0 billion in 4Q 2020, down 15% from 4Q 2019
Wealth and asset management (WAM) gross flows
- WAM gross flows of HK$39.5 billion in 2020, up 7% from 2019, and HK$10.0 billion in 4Q 2020, down 3% from 4Q 2019
Agency force performance
- Number of agents reached a new record of 10,706 as at December 31, 2020, up 6% from 2019
- Agency APE sales made up 70% of total APE sales in 2020
- Agency APE sales in 2020 were down 2% from 2019
- Agency-driven Mandatory Provident Fund (“MPF”) sales in 2020 rose 38% from 2019
- MPF market share: Manulife Hong Kong was the largest scheme sponsor with a share of 24.6% based on assets under management as at December 31, 2020 and 39.4% in terms of estimated net cash flows for the period from October 1, 2020 to December 31, 2020. Manulife Hong Kong formed a strategic alliance with Allianz Global Investors in the fourth quarter of 2020 to further reinforce its MPF market leadership. Inclusive of the strategic partner’s market share, Manulife Hong Kong would have had a 25.5% share based on assets under management at the end of 2020.
Full-year core earnings increased 10% to HK$6.3 billion in 2020 from HK$5.8 billion in 2019. Fourth-quarter 2020 core earnings hit HK$1.8 billion, up 10% from HK$1.6 billion in the same quarter of 2019. Core earnings in 2020 and 4Q 2020 increased compared with 2019 and 4Q 2019, respectively, from in-force business growth, favourable new business product mix, and improved policyholder experience, partially offset by lower new business volume.
APE sales in 2020 were HK$6.0 billion, down 10% from HK$6.7 billion in 2019, driven by the adverse impact of COVID-19 containment measures, and lower sales to Mainland Chinese Visitors (“MCV”). Excluding MCV sales, full-year APE sales would have grown by 3%. Fourth-quarter 2020 APE sales dropped 15% to HK$1.5 billion from HK$1.8 billion in the same period of 2019, due to the extended impact of the pandemic.
NBV was HK$3.6 billion in 2020, down 14% from HK$4.2 billion in 2019, driven by lower sales and a decline in market interest rates. NBV in the fourth quarter of 2020 was HK$1.0 billion, down 15% from HK$1.2 billion in the same quarter of 2019.
WAM gross flows in 2020 were HK$39.5 billion, 7% higher than HK$37.2 billion in 2019. In 2020, pension fund sales grew 24% year over year, primarily due to some large cases and the success of agency-driven MPF sales. Fourth-quarter 2020 WAM gross flows were HK$10.0 billion, down 3% from HK$10.4 billion in the same quarter of 2019.
2021
Mr. Green added: “For 2021, we will continue with our ambitious plans to drive our growth agenda and meet customer needs. We will be actively recruiting for our professional agency force, with a long-term goal of double-digit growth in annual headcount. On digital acceleration, we’ve already earmarked over HK$230 million to invest in customer digital touchpoints and agency sales tools. We’ll also continue to deliver new health and retirement solutions and customer services, bearing in mind the increasing protection needs in Hong Kong, Macau and other cities in the Greater Bay Area.”
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