Manulife Financial Corporation
) has completed the acquisition of Benesure Canada Inc. The
transaction was announced on October 24, 2012.
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Benesure is among the leading third party administrator and
distributors of Canadian life and disability creditor insurance
solutions to the mortgage broker marketplace.
The transaction is a prudent step for Manulife since it will help
its unit Manulife Affinity Markets to gain scale. It will also
place Manulife as a leader in creditor insurance solution for
mortgage brokers, currently earning premiums in excess of $65
million from more than 170,000 Benesure Canada Inc. clients.
The Canadian division contributes approximately 31% of the core
earnings mix. In Canada, the company is launching new businesses
in order to to leverage its strong track record in the
region. It expects to use its large in-force sales agency and
generate growth from cross-selling.
Recently Manulife Securities, the wholly-owned subsidiary of
Manulife Financial, announced its intention to acquire
Canada-based Wellington West Financial Services Inc. from its
parent company, National Bank Financial Group.
Manulife is one of the dominant life insurers within its domestic
Canadian market and possesses rapidly growing operations in the
U.S. and several Asian countries. It has a diverse global
presence with 75% of its earnings coming from outside
Canada. It has been doing business in the Asian market for
over a century, which gives it a competitive advantage.
Moreover, changing demographics has fueled demand for insurance
and wealth management products in these regions and the company
will likely benefit from this due to its longstanding presence.
Manulife currently retains a Zacks #5 Rank (Strong Sell). We are
maintaining our long-term Underperform recommendation on the
shares on the back of a substantial exposure of the company to
equity and interest rate risk.
Headquartered in Toronto, Canada, Manulife Financial operates as
a life insurance company and offers reinsurance services. The
company functions as Manulife Financial in Canada and Asia, and
primarily as John Hancock in the United States.
) is one of its biggest competitors.