Note 19 Segmented Information

Effective January 1, 2018, as a result of the organizational changes made to drive better alignment with the Company’s strategic priorities as well as to increase focus and leverage scale in its wealth and asset management businesses, the Company’s wealth and asset management businesses are now a primary reporting segment.

The Company’s reporting segments are Asia, Canada, U.S., Global WAM and Corporate and Other. Each reporting segment is responsible for managing its operating results, developing products, defining strategies for services and distribution based on the profile and needs of its business and market. The Company’s significant product and service offerings are shown below.

Wealth and asset management businesses (Global WAM) – include mutual funds and exchange-traded funds, group retirement and savings products, and institutional asset management services across all major asset classes. These products and services are distributed through multiple distribution channels, including agents and brokers affiliated with the Company, independent securities brokerage firms and financial advisors, pension plan consultants and banks.

Insurance and annuity products (Asia, Canada and U.S.) – includes a variety of individual life insurance, individual and group long-term care insurance and guaranteed and partially guaranteed annuity products. Products are distributed through multiple distribution channels, including insurance agents, brokers, banks, financial planners and direct marketing. Manulife Bank of Canada offers a variety of deposit and credit products to Canadian customers.

Corporate and Other Segment – comprised of investment performance on assets backing capital, net of amounts allocated to operating segments; costs incurred by the corporate office related to shareholder activities (not allocated to the operating segments); financing costs; Property and Casualty Reinsurance Business; and run-off reinsurance operations including variable annuities and accident and health.

In addition to changing the segments, the Company changed the segment reporting for the changes to actuarial methods and assumptions. These changes were previously reported in the Corporate and Other segment and are now reported in the respective reporting segments. Prior period amounts have been restated to reflect these changes.

By segment



As at and for the year ended December 31, 2018	Asia			Canada			U.S.			Global WAM			Corporate and Other			Total
Revenue
Life and health insurance	$	14,938		$	8,975		$	6,341		$	–		$	98		$	30,352
Annuities and pensions⁽¹⁾		3,175			452			(9,967	)		–			–			(6,340	)
Net premium income		18,113			9,427			(3,626	)		–			98			24,012
Net investment income (loss)		278			2,764			1,723			(8	)		(225	)		4,532
Other revenue		1,296			1,446			2,542			5,472			(328	)		10,428
Total revenue		19,687			13,637			639			5,464			(455	)		38,972
Contract benefits and expenses
Life and health insurance		10,875			8,044			4,255			–			(37	)		23,137
Annuities and pensions		1,986			518			(9,784	)		77			–			(7,203	)
Net benefits and claims		12,861			8,562			(5,529	)		77			(37	)		15,934
Interest expense		187			447			56			2			583			1,275
Other expenses		4,749			3,063			3,428			4,322			682			16,244
Total contract benefits and expenses		17,797			12,072			(2,045	)		4,401			1,228			33,453
Income (loss) before income taxes		1,890			1,565			2,684			1,063			(1,683	)		5,519
Income tax recovery (expense)		(355	)		(321	)		(352	)		(108	)		504			(632	)
Net income (loss)		1,535			1,244			2,332			955			(1,179	)		4,887
Less net income (loss) attributed to:
Non-controlling interests		208			–			–			–			6			214
Participating policyholders		(360	)		233			–			–			–			(127	)
Net income (loss) attributed to shareholders	$	1,687		$	1,011		$	2,332		$	955		$	(1,185	)	$	4,800
Total assets	$	112,327		$	214,101		$	272,228		$	130,379		$	21,236		$	750,271

As at and for the year ended December 31, 2017	Asia			Canada			U.S.			Global WAM			Corporate and Other			Total
Revenue
Life and health insurance	$	13,145		$	4,322		$	6,778		$	–		$	110		$	24,355
Annuities and pensions		2,568			443			844			–			–			3,855
Net premium income		15,713			4,765			7,622			–			110			28,210
Net investment income (loss)		4,044			4,560			10,657			42			64			19,367
Other revenue		933			1,862			3,039			5,158			(246	)		10,746
Total revenue		20,690			11,187			21,318			5,200			(72	)		58,323
Contract benefits and expenses
Life and health insurance		11,881			5,018			16,193			–			268			33,360
Annuities and pensions		1,889			2,404			1,574			74			–			5,941
Net benefits and claims		13,770			7,422			17,767			74			268			39,301
Interest expense		164			307			36			1			631			1,139
Other expenses		4,360			3,069			3,374			4,193			386			15,382
Total contract benefits and expenses		18,294			10,798			21,177			4,268			1,285			55,822
Income (loss) before income taxes		2,396			389			141			932			(1,357	)		2,501
Income tax recovery (expense)		(405	)		159			(1,342	)		146			1,203			(239	)
Net income (loss)		1,991			548			(1,201	)		1,078			(154	)		2,262
Less net income (loss) attributed to:
Non-controlling interests		187			–			–			–			7			194
Participating policyholders		(30	)		(6	)		–			–			–			(36	)
Net income (loss) attributed to shareholders	$	1,834		$	554		$	(1,201	)	$	1,078		$	(161	)	$	2,104
Total assets	$	96,354		$	217,813		$	263,523		$	131,779		$	20,064		$	729,533

⁽¹⁾	During the year, the Company ceded premiums to reinsure a block of legacy U.S. individual pay-out annuities business, refer to note 7(k) for details.

The results of the Company’s reporting segments differ from its geographic segments primarily due to the allocation of the Company’s Global WAM and Corporate and Other segments into the geographic segments to which its businesses relate.

By geographic location


As at and for the year ended December 31, 2018	Asia		Canada		U.S.			Other		Total
Revenue
Life and health insurance	$	15,010	$	8,561	$	6,342		$	439	$	30,352
Annuities and pensions		3,175		452		(9,967	)		–		(6,340	)
Net premium income		18,185		9,013		(3,625	)		439		24,012
Net investment income (loss)		371		2,933		1,032			196		4,532
Other revenue		2,115		2,904		5,395			14		10,428
Total revenue	$	20,671	$	14,850	$	2,802		$	649	$	38,972

As at and for the year ended December 31, 2017	Asia		Canada		U.S.			Other		Total
Revenue
Life and health insurance	$	13,215	$	3,894	$	6,780		$	466	$	24,355
Annuities and pensions		2,568		443		844			–		3,855
Net premium income		15,783		4,337		7,624			466		28,210
Net investment income (loss)		4,258		4,642		10,407			60		19,367
Other revenue		1,632		3,187		5,911			16		10,746
Total revenue	$	21,673	$	12,166	$	23,942		$	542	$	58,323