Manulife Financial Corp. CEO and Director Donald Guloien refused to comment on a recent media report about the insurer's plans for John Hancock Financial Services Inc. during a call to discuss the company's earnings.
The Wall Street Journal recently reported that Manulife was weighing a spinoff or IPO of the U.S. unit, which it bought back in 2004. "Sources familiar with the company" told the publication that Manulife had been under pressure from some shareholders to divest the unit following poor returns.
Manulife has stated several times in the recent past that it has some "challenging blocks of legacy business," Guloien said, noting that the company is looking out for all opportunities to improve shareholder value. "We believe this is good governance, plain and simple, and there is no news here," he said.
But there are no "nonstarters" as to what Manulife could do with the business in the future, the CEO added.
John Hancock Insurance President and General Manager Michael Doughty said several initiatives are ongoing related to improving the returns of the legacy businesses, with a focus on expense management. Some of these include implementing cloud-based computing, digitizing the business and consolidating infrastructure to improve efficiencies, he said.
Additionally, as opposed to some of its peers in the traditional retirement plan services business, Manulife is very bullish about growth opportunities in the digital advice business. There are three major initiatives in progress in the digital advice space, Doughty said. The company has developed MyPortfolio, a digital advice solution currently available as an adviser-assisted product; a mobile-first tool for young individuals or families who feel the need to start investing; and a digital in-plan advice product for retirement plan participants to access advice as part of their employer-sponsored offering, he said.