Manulife plans to have completed the integration of Standard Life by late 2017. The transition of a number of individual products has already been accomplished, while group products will be dealt with during 2016 and 2017. In addition, the insurer will be soon bringing its US Vitality initiative to Canada.
Charles Guay, president and CEO of Manulife in Quebec, made these comments in a speech to the Cercle finance et placement du Québec on Jan. 20. He noted that while Manulife shares have lost nearly 25% of their value since December, the company remains a darling of large investors, as it is preparing for a growth spurt. Among other things, the insurer plans to further its expansion into Asia in 2016.
Concerning the integration of Standard Life into Manulife’s operations, Guay expects that the team of 600 people dedicated to the project will have completed their task by the end of 2017. “The integration is proceeding faster for retail products, but more slowly for group products, which are more personalized. They require system developments,” he explained. “We expect to have completed the transition of group insurance by the end of 2016 and that of group retirement plans by the end of 2017.”
By the third year, Guay believes that Manulife will be able to find $100 million worth of synergies as a result of this acquisition, while the total cost of the integration operation is expected to be about $150 million. “That is not counting all the revenue synergies we can achieve with the 1.4 million Standard Life customers,” he added.
He also says that one of the objectives is to increase Manulife’s penetration rate in the Canadian market through cross-selling. “One in three Canadians do business with Manulife, but 90% of them only have one Manulife product. The Standard Life acquisition has enabled us to improve the offering. “
Charles Guay also revealed that the arrival of the Vitality program in Canada is imminent. He says the technology is ready. Built in partnership with the South African company Discovery, Vitality rewards life insurance customers who adopt a healthy lifestyle by allowing them to communicate their progress through a FitBit bracelet. The insured accumulates points, and can obtain a premium discount.
“Vitality is allowing us to become a game changer and reinvent the world of insurance in the United States. We are overseeing a pilot project in Asia and this is also something that we are looking at for Canada in the coming months, or the coming years. We want to encourage people to be active and fit; to live much longer,” said Guay.