Manulife’s U.S. power play includes Canadian prize

(September 29, 2003) Dig beneath the mega-dollar headlines relating to Manulife Financial’s proposed takeover of Boston’s John Hancock Financial Services and you’ll find the deal also includes Maritime Life, a subsidiary of Hancock since 1969. If the agreement is approved, the Maritime name will essentially disappear as the Halifax-based firm is merged into Manulife’s Canadian operations.

“This will be a disappointment and a concern for all of us who have worked so hard to build a distinctive culture and brand for Maritime Life,” company president Bill Black said in a note to staff obtained by Advisor.ca.

“This is a difficult time for all of us,” he added. “But as quickly as possible each of us needs to move into this new chapter and to make the most of the many opportunities that will be available.”

On the positive side, Black notes that Manulife is a “very well-run” company which has produced “consistently superior” results. Black says he’s also been impressed by Manulife’s Canadian executive team, headed by vice-president Bruce Gordon.

In addition, Black notes that Manulife has pledged to maintain significant operations in cities where Maritime Life has a presence, including Halifax. Maritime has close to 3,000 staff across the country and about 1,000 at its head office in Halifax.

“There is an expectation that savings will be attained through our combined normal attrition, along with a healthy growth in business creating new opportunities,” Black said.

A note sent to Manulife agents today also struck a positive note. Manulife said the acquisition of Maritime Life will extend Manulife’s operations to include Halifax in a “more significant way” and would expand the firm’s distribution system.

“Maritime Life operates across Canada in a manner very similar to our own,” the note said. “We anticipate a very beneficial alignment of our two businesses.”

Still, there’s concern about job losses at Maritime Life, especially in Halifax. Harry Bruce, author of a book on the history of Maritime Life, told the Halifax Chronicle-Herald he thinks the head office could ultimately be closed down.

A contributor to the For Advisors Only online forum predicts significant staff cuts at Maritime. “Manulife’s track record is not so much integration as swallowing,” he wrote.

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In a conference call this morning, Manulife CEO Dominic D’Allesandro said the Manulife/John Hancock combination should result in savings of about $350 million over a two-year integration period. But D’Allesandro said he did not expect to see “huge numbers” of job losses as a result of the merger.

From an advisor’s point of view, the Manulife deal means one less insurer in Canada, “not a good thing for clients, in my opinion,” says Lawrence Geller of Geller Insurance in Campbellville, Ontario.

“One big player instead of one big and one medium-sized player — less responsive to clients and agents than the prior environment,” Geller told Advisor.ca. “Given a choice I would prefer to sell Maritime Life products to those from Manulife. Now we won’t have that option.”

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Share your thoughts on the Manulife deal and the future of Maritime Life in the “Free For All” forum of the Talvest Town Hall on Advisor.ca.

Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca

(09/29/03)

Doug Watt