Bloomberg News reports that Marc Sterling, the head of Manulife's China operations, believes the life insurer can double or even triple its revenue by winning licenses to operate in about 100 of its cities. That would be welcome news at a time when Manulife shares have lost nearly a third of their value from this year's high of about $25.
The news comes on the heels of Canadian Prime Minister Stephen Harper's state visit to China this week to increase business, including financial services, between the two countries. Harper has recently toned down his rhetoric on China's human rights problems in order to seek closer ties with China because of slumping U. S. demand for Canadian products.
Sterling fired his own shot at the U.S. when he pointed out that the Chinese were "taken aback" by all the business failures stateside and in Europe, while Canadians have done quite well. Of course, in full disclosure, it does bear repeating that Manulife's recent hush and rush stock offering was an effort to shore up the capital position of Canada's largest life insurer.
Apparently, it worked. According to Market Blog, Moody's Investors Service has improved its ratings outlook on Manulife Financial's subsidiaries to "stable" from "negative" and affirmed the Aa3 insurance financial strength ratings on the company. Its subsidiaries include John Hancock Life Insurance Co.
Like all foreign insurers, except American International Group which has close ties to China, Manulife has to partner with a Chinese firm, Sinochem Life Insurance, with each in control of about half the venture. Since the Chinese are clamoring for life insurance, improved Chinese-Canadian relations should benefit both.