D'Alessandro says Manulifes costs are under control

In almost every industry on the planet, costs are rising. It's either energy costs due to the price of oil, or labour and operating costs keeping up with inflation, or a combination of factors.

Manulife Financial, one of Canada's biggest companies, just behind RBC in market cap, has been growing enormously in the past two years, and until recently showed great promise. Just recently profit at Manulife Financial Corp. fell 8.5 per cent in the second quarter, missing analyst forecasts, as weak equity markets, a stronger Canadian dollar and tax-related provisions all took a toll.

But Manulife, North America's No. 2 life insurer, also raised its dividend by eight per cent to 26 cents a share, and stressed that its insurance and wealth management sales grew by double digits.

"We again experienced excellent sales results in almost every one of our businesses," CEO Dominic D'Alessandro said during a conference call.

He said the company's costs are under control, it is expanding and gaining market share.

"We don't run the business for quarter-to-quarter purposes, we run it for the long term ... we look forward to continuing to deliver strong results in the periods ahead, no matter what the economic conditions are," D'Alessandro said.

Manulife earned $1.01 billion, or 66 cents a share, down from year-earlier $1.1 billion, or 71 cents a share.

Analysts had expected profit of 71 cents a share before exceptional items, according to Reuters Estimates.

"Obviously, the headline number was short of consensus, it's a slight miss," said Jukka Lipponen, insurance analyst at investment bank Keefe, Bruyette & Woods.

"In the corporate segment they had a loss, and I was looking for positive earnings. But in terms of top-line growth, they had a lot of strength in a number of areas."

Excluding currency movements, insurance sales rose 18 per cent and wealth management sales climbed 14 per cent.Toronto-based Manulife, which operates in Canada, the United States and Asia, said charges from insurance sales growth, less favourable credit and equity markets and tax-related charges on leveraged lease investments more than offset improvements in earnings from a higher insurance in-force base and investment gains.

Equity market declines, primarily in the U.S. and Hong Kong, hurt fee income while the higher Canadian dollar trimmed earnings by $41 million in the quarter, Manulife said. About 70 per cent of its income is denominated in foreign currencies.

The year-over-year currency drag should abate in upcoming quarters, RBC Capital Markets analyst Andre-Philippe Hardy said in a research note.

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Dominic D'Alessandro

President and Chief Executive Officer - Manulife Financial

President and Chief Executive Officer of Manulife Financial since January 1994, Mr. D’Alessandro has led the Company to its 14th consecutive year of record financial performance, resulting in Manulife being among the most profitable life insurance companies in North America.

Mr. D’Alessandro led the successful demutualization and conversion of the Company to public company status in September 1999. This important accomplishment set the stage for the Company to become a world leader in the financial services industry. In 2004, he managed the largest cross-border transaction in Canadian history with the successful completion of the merger with John Hancock Financial Services, creating the second largest life insurance company in North America and the fourth largest in the world.

Mr. D’Alessandro continues to endorse and promote Manulife’s values, established under his leadership in 1994, common to all business divisions around the world. These values are summarized by the acronym PRIDE, which stands for Professionalism, Real Value to Customers, Integrity, Demonstrated Financial Strength, and Employer of Choice. Manulife is widely recognized for putting these values into practice. In 2007, it once again received first place ranking in the Globe and Mail's Corporate Governance survey. In addition it was named as the top Canadian Brand on the list of the world's 250 most valuable brands as well as one of Canada's 10 Most Admired Corporate Cultures. In early 2008 it was cited as a Best Employer of New Canadians.

Being a good corporate citizen is an integral part of the Company’s values. Donation and sponsorship commitments to the communities where the Company does business have increased considerably. Mr. D’Alessandro is also personally committed to citizenship. He is currently co-chair of the Montreal Neurological Institute’s fundraising campaign, a five-year, $40-million initiative to invest in people and expand facilities and services. He was Campaign Chair for the Salvation Army, Ontario Central Division’s first Capital Campaign. He was also Campaign Chair for the Greater Toronto United Way Campaign in 1998 and, in 1996, served as Co-chairman of the Corporate Fund for Breast Cancer Research Campaign.

Mr. D’Alessandro is a Vice Chairman of the Board of the Canadian Council of Chief Executives and is a Director of the Canadian Life and Health Insurance Association. He also Co-Chairs the Toronto Region Immigrant Employment Council. As President of Manulife, Mr. D’Alessandro is a member of the Board of Directors and Chairman of the Company’s Management Committee.

As well as receiving numerous other awards, Mr. D’Alessandro was named an Officer of the Order of Canada in August 2003. He was named ‘Canada’s Most Respected CEO’ for 2004 and ‘Canada’s Outstanding CEO of the Year 2002’ by his peers for his contribution to business and the community. In November 2006, Canadian Prime Minister Stephen Harper named Mr. D’Alessandro to the Advisory Committee on the Public Service of Canada, and in June 2006 appointed him to NAFTA’s North American Competitiveness Council. In July 2008, he will be inducted into the International Insurance Society Hall of Fame. Mr. D’Alessandro received honourary doctorates from the University of Ottawa and Ryerson University in June 2008. He received the International Distinguished Entrepreneur Award from the University of Manitoba in June 2007, and has also received the Canadian Business Leader Award from the Alberta School of Business in March 2007, an Honourary Doctorate from York University in June 2006, a 2005 Horatio Alger Award, a Special Lifetime Management Achievement Award from McGill University in February 2005, Concordia University’s Loyola Medal in May 2004, the University of Toronto’s Arbour Award in September 1999, and an Honourary Doctorate from Concordia University in June 1998. Mr. D’Alessandro was also made a Fellow of the Institute of Chartered Accountants in 1993.

Career Highlights
Mr. D’Alessandro graduated with a Bachelor of Science degree in Physics and Mathematics from Loyola College, Montreal. He qualified as a chartered accountant in 1971. Mr. D’Alessandro has an extensive and varied background in the financial services industry. From 1968 to 1975, he was employed by Coopers & Lybrand, where he also spent time in the firm’s Paris office.

In 1975, Mr. D’Alessandro joined Genstar Ltd. During his six years with the firm, he worked in Dhahran, Saudi Arabia as Director of Finance and subsequently General Manager, and was later based in San Francisco as Vice President of Genstar’s Materials and Construction Group.

Mr. D’Alessandro joined the Royal Bank of Canada in 1981 where he held a number of positions including Executive Vice President, Finance.

In November 1988, Mr. D’Alessandro was appointed President and Chief Executive Officer of the Laurentian Bank of Canada. Read Full Post...