Mr. Moloney: John Hancock Financial Services is in the life insurance and financial services business. We divide our company into three major segments: Retail Operations, Institutional Businesses, and Corporate and Other. The retail business consists of two major areas: the protection business, which includes traditional life insurance, variable life insurance and long-term care insurance, and the asset-gathering business, which includes fixed and variable annuities, and our mutual fund operations. Under institutional businesses, we have funding agreements and stable value products, and investment management operations. Corporate and Other consists primarily of Maritime Life, our Canadian company, as well as other international operations, corporate accounts used to fund business growth, and some old businesses that we exited awhile back.
TWST: What has been the economic damage to those two broad
segments of customers in terms of product demand?
Mr. Moloney: If you step back and look at what has happened over
the last year or so with the economy, and with issues related to
the September 11th terrorist attacks, you see a shift in focus to
protection and guaranteed-type products. Because of the economic
downturn and because in the last year people have seen things
they'd never even dreamed of, people are turning more to
protection, thinking about how to protect what they have, not
necessarily how to grow it by 20%. Our core life insurance
businesses are up 26% over the prior year on a year-to-date basis
through June. Our annuity business is up 86%, primarily driven by
fixed annuities, which are up well over 100%. Our variable
annuity business, which focuses on equity market types of
investments, is down slightly. Long-term care insurance is up
about 17%. We're also seeing this shift of focus to security and
growth with our institutional businesses, particularly our
guaranteed and structured financial products area. These
businesses are seeing some good comebacks now that people are
thinking about protecting what they have. People who used to be
hard-wired for annual 20% increases in equity markets going on
forever are now happy to see a good, stable 5%- 6% earnings rate.
Tickers included in this excerpt: JHF
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