Manulife Financial acquires CMG Philippines from Commonwealth Bank of Australia

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Tuesday September 24, 2002

MANILA, Philippines, Oct. 17, 2002 – Manulife Financial has entered an agreement to acquire the life insurance and pension & education operations of CMG Philippines from Commonwealth Bank of Australia, subject to regulatory approval. The transaction, which includes more than 60,000 in-force life insurance policies and pension & education savings plans, will enhance Manulife’s current position in these sectors and realize its strategy of becoming a major player in the pension & education industry. The terms of the deal were not disclosed.

Manulife’s acquisition of CMG’s life insurance and pension & education business represents the largest such transaction since the consolidation phase within the Philippines life insurance and pension & education industries began a few years ago.

“The Philippines is an important market for Manulife Financial in Asia and we have long sought a strategic opportunity to expand our presence here,” said Vic Apps, Manulife’s Executive Vice President and General Manager for Asia. “Though we have been significantly growing our operations locally, this move will greatly accelerate our expansion efforts, primarily through the addition of more than 1,000-plus agents.”

Manulife currently ranks as the fourth largest life insurance company in the Philippines, as measured by total individual premium income. The purchase of CMG’s life insurance, pension & education business will increase Manulife’s market share in the Philippines to 6.6 per cent in terms of total life insurance premiums (based on figures from the Philippine Life Insurance Association’s 2000 report) and 2.6 per cent of total pension and education sales (based on SEC Reports for 2001).

Terms & conditions of policies unchanged

The terms and conditions under which all CMG life insurance and pension & education policies have been issued, remain unchanged as Manulife honours the servicing of this existing block of business.

“Our principals have made it one of their prime directives to ensure that our clients remain with a secure and service-oriented company,” said Shane McNally, CMG Philippines President.

Committed to growth in the Philippines

“Aside from CMG’s life insurance business, their pension & education operations – which ranked 10th in total sales in 2001 – will significantly enhance the operations of our recently launched pension & education company, Manulife Financial Plans,” said Renato A. Vergel de Dios, Manulife’s General Manager for the Philippines. “This development offers us economies of scale that are especially valuable in this very competitive environment.”

“Our objective now is to provide our new customers with the security that their financial plans are backed by a world leader in financial services,” added Mr. Vergel de Dios. “Manulife aims to become the premier provider of pension & educational plans in the Philippines by introducing high value products and services that revolutionize current industry practices. Today’s announcement is a step in this direction.”

Manulife’s combined agency force in the Philippines has grown to more than 1,400 as a result of an aggressive agency growth strategy, a substantial increase from the less than 400 agents that existed only two years ago.

Market leader executes global expansion strategy

“Manulife Financial is a global financial services company with more than 100 years of experience in Asia. Its Asian presence has been strengthened over the past few years through a number of expansion initiatives in the region,” said Philip Hampden-Smith, Manulife’s Vice President, Regional Operations-Asia, referring most recently to: the establishment of a branch office in Guangzhou, China; the acquisition of full ownership of its former joint-venture operations in Singapore and Vietnam; and, the purchase of CIGNA’s life insurance agency force in Taiwan. Manulife’s exclusive sales force throughout Asia, including Japan, grew by 35 per cent in 2001 and now numbers more than 20,000.

In July 2002, Manulife Philippines assumed the block of in-force life insurance business formerly belonging to MetLife Insurance Company of the Philippines (“MetLife Philippines”) by way of an Assumption Reinsurance Agreement between the parties.

About Manulife Philippines

Manulife Philippines and Manulife Financial Plans are wholly owned subsidiaries of Manulife Financial, a leading Canadian-based financial services group operating in 15 countries and territories worldwide. Through its extensive network of employees, agents and distribution partners, Manulife Financial offers clients a diverse range of financial protection products and wealth management services. Funds under management by Manulife Financial were Cdn$139.8 billion as at June 30, 2002.

Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE, and under ‘0945’ on the SEHK. Manulife Financial can be found on the Internet at