Robert Veloso - Investor Relations Roy Gori - President and Chief Executive Officer Philip Witherington - Chief Financial Officer Anil Wadhwani - General Manager of Asia Naveed Irshad - Head of our North American Legacy Businesses Steven Finch - Chief Actuary Scott Hartz - Executive Vice President, General Account Investments Anil Wadhwani - President and Chief Executive Officer, Manulife Asia Naveed Irshad - Head, North America Legacy Business Rahim Hirji - Executive Vice President and Chief Risk Officer Michael Doughty - President and Chief Executive Officer, Manulife Canada Marianne Harrison - President and Chief Executive Officer, John Hancock Paul Lorentz - Head, Global Wealth and Asset Management.

John Aiken - Barclays Capital Stephen Theriault - Eight Capital Meny Grauman - Cormark Securities Nick Stogdill - Credit Suisse Gabriel Dechaine - National Bank Financial Humphrey Lee - Dowling & Partners Sumit Malhotra - Scotia Capital Doug Young - Desjardins Capital markets Paul Holden - CIBC Mario Mendonca - TD Securities Tom MacKinnon - BMO Capital Markets Darko Mihelic - RBC Capital Markets.

Good morning and welcome to the Manulife Financial Fourth Quarter 2017 Financial Results Conference Call for Thursday, February 8, 2018. Your host for today will be Mr. Robert Veloso. Please go ahead, sir..

Thank you and good morning. Welcome to Manulife’s earnings conference call to discuss our fourth quarter and full-year 2017 results. Our earnings release, financial statements and related MD&A, statistical package and webcast slides for today’s call are available on the Investor Relations section of our website at manulife.com.

We will begin today’s presentation with an overview of our fourth quarter and full-year highlights and a strategic update on our priorities by Roy Gori, our President and Chief Executive Officer. Following Roy’s remarks, Phil Witherington, our Chief Financial Officer, will discuss the Company’s operating results.

After the prepared remarks, we will move to question-and-answer portion of our conference call. We ask that each participant adhere to a limit of one or two questions and if you have additional questions, please re-queue and we will do our best to respond to all questions.

Before we start, please refer to Slide 2 for a caution on forward-looking statements and Slide 38 for a note on the use of non-GAAP financial measures in this presentation. Note that certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from what is stated.

The slide also indicates where to find more information on these topics and what factors could cause actual results to differ materially from those stated. With that, I would like to turn the call over to Roy Gori, our President and Chief Executive Officer.

Roy?.

Thank you, Robert. Good morning, everyone and thank you for joining us today. Before we get started, I would like to officially welcome Phil Witherington into his new position as Chief Financial Officer.

We are also joined for the first time by Anil Wadhwani, our new General Manager of Asia; and Naveed Irshad, the Head of our North American Legacy Businesses. Turning to Slide 5. Yesterday, we announced our fourth quarter and full-year 2017 financial results.

For the full-year, net income was $2.1 billion, however, it was impacted by the $2.8 billion post tax charge related to U.S. tax reform and portfolio asset mix changes.

We delivered strong operating results ending the year with core earnings of $4.6 billion, an increase of 14% from the prior year and exceeding our medium term core EPS growth target of 10% to 12%.

Our growth drivers maintained the momentum in 2017, we generated strong growth in APE sales and new business value in Asia, up 18% and 25% respectively and in our wealth and asset management businesses, we recorded our 32nd consecutive quarter of positive net flows.

On the basis of our strong operating results and continued momentum, the Board approved a 7% increase in our dividend to $0.22 per share. This marks our fifth increase, since the first quarter of 2014. Turning to Slide 6. As it is the end of the year, it feels like an opportune time to highlight some of our longer-term successes that we have delivered.

In the last five years, we have delivered a 74% increase or a 15% compound annual growth rate in core earnings, as we successfully drove growth throughout our businesses. Particularly, our highest potential businesses Wealth and Asset Management in Asia. Our Asia and WAM businesses now accounts for 44% of core earnings in 2017, up from 36% in 2013.

A strong growth in earnings has supported our ability to raise the dividends 58% in the last five years and that does not factor the 7% increase announced yesterday. Turning to Slide 7 on our key priorities. I would like to remind you that as we transform Manulife into a digital customer centric market leader, we are focused on what matters most.

This focus is reflected in our five strategic priorities. One, we are optimizing our portfolio to make sure we are putting our capital to best use. Two, we are aggressively managing our cost to be competitive and create value. Three, we are accelerating growth in our highest potential businesses. Four, we are putting focus on our customers.

Five, we are building a high performing team and culture. Moving to Slide 8. We have made progress on our key priorities in 2017.

We have a clear objective to improve our returns in our legacy businesses and we recently announced the decision to reduce our allocation to alternate long duration assets in our portfolio asset mix, which I will discuss in greater detail later.

We also appointed Naveed Irshad into a senior leadership role to more aggressively pursue this opportunity with stronger accountability and focus on in force management, cost efficiencies and leveraging scale as well as potential strategic transactions for our business, where it makes sense. Managing cost is a significant priority for us.

Our plans range from consolidating third-party vendors to controlling discretionary spending, digitizing our processes, simplifying our underwriting processes and using predictive analytics to make better, more efficient decisions. We will find creative solutions to do more with less.

We began our efforts in 2017 and have plans in place to deliver savings in 2018 as there continues to be a significant opportunity. Our efforts contributed to a slowing of expense growth in 2017, despite increased strategic spend and higher expenses from areas where we see the most potential.

We will continue to invest to ensure that we make the most of the significant opportunity of our higher potential businesses. Asia and Wealth and Asset Management are just two examples of our successes and I'll provide you with some more color on these businesses shortly.

We also appointed Paul Lorentz to run our Global Wealth and Asset Management businesses and Anil Wadhwani as our new General Manager of Asia. Companies that they like their customers outgrow their competitors and our industry is no different. We continue to make progress in 2017 to transform our Company into a digital customer centric market leader.

We are making it easier for customers to engage with us when and how they want to, and in doing so, improving our efficiency. We entered into two new 15 year exclusive bancassurance partnerships, Techcombank in Vietnam and ABA Bank in Cambodia.

In Thailand, we repositioned our insurance as a lien digital distribution pilot, which included the closing of non-digital channels and a reduction in our workforce of 50%. We have made improvements in auto-underwriting, straight-through processing and eClaims.

In Canada, we enabled insurance applications to be submitted by our new online tool and enabled bank deposits to be made through mobile devices. In the U.S., we launched Twine, a new app designed to help couples, who are not currently working with an advisor, save and invest together.

The app is quickly gaining traction and was recently featured as Apple’s App of the Day. We also continue to expand our wellness programs around the world to help our customers live healthier lives and get savings and other benefits through their life insurance program.

The success of our transformation simply won’t be possible if we do not foster the right culture to execute. We have spent considerable effort to ensure we have the right structure and teams in place and we are proud to have been named one of the Best Places to Work and Best Employers by Glassdoor and Forbes.

We continue to work to attract, retain and develop the best talent and to engage and excite our employees to rally around our customers. We are fully committed to the transformation of our business to position Manulife as a digital customer-centric leader.

We are confident that by delivering on our strategic priorities, we will succeed in delighting our customers, exciting and engaging our employees and creating substantial shareholder value.

Before I pass it up to Phil, I wanted to take a deeper dive into two areas of focus; portfolio optimization and accelerating our businesses with the most potential. Turning to Slide 9.

We conducted an in-depth review of our investment strategy and determined that a strategic adjustment in the strategy would optimize the return on capital of our portfolio. Our alternate long duration asset portfolio has performed well and we intend to continue to invest in each of our six classes of ALDA.

However, we are lowering the proportion of ALDA backing our North American legacy businesses to free up approximately $2 billion in capital or $1 billion net of the upfront charge. This will also reduce our inherent risk profile and lower earnings volatility in our legacy businesses.

We expect the older asset dispositions to occur over the next 12 to 18 months at which point the net $1 billion capital benefit will be diluted. In the short-term this decision is expected to negatively impact core earnings by approximately $70 million per year after-tax until we are able redeploy their capital benefit. Turning to Slide 10.

We have an enviable history of delivering results in Asia. We have strengthened the foundation of our Asia business since 2013. We have diversified our distribution mix and geographic mix. On the distribution front, we have grown all our key distribution channels. The most notable expansion is bringing the bancassurance channel.

We now have eight exclusive bancassurance partnerships and bancassurance in 2017 delivered 28% of our APE sales, up 11 percentage points from 2013. From a geography standpoint, we are less reliant on Hong Kong and Japan. Asia and other now contributes 30% of our new business value, up from 19% just three years ago.

With particular, strong growth in Mainland China, Singapore and Vietnam. These successes contributed to more than doubling our APE sales since 2013 and new business value since 2014. In 2017, Asia, our APE sales also performed well and we are up 18% from 2016, this included an almost 50% increase in Mainland China.

We also delivered strong growth in new business value and core earnings in 2017, up 25% and 16% respectively from 2016. Turning to Slide 11. Our wealth and asset management businesses have delivered strong long-term growth with a more than doubling of AUMA and core earnings growing at a 15% compounded annual growth rate.

We have also seen a notable improvement in our core EBITDA margins, which increased by 300 basis points since 2013. We have been focused on delivering excellent investment performance and rounding out our capabilities, which contributed to generating 32 consecutive quarters of positive net flows.

Our Manulife Asset Management Funds have delivered great investment performance with 75% of publicly traded assets, outperforming their benchmarks over a five year horizon. We have also broadened our offering to North American customers with the introduction of smart beta ETF, which have experienced a good take off so far.

Over the last five years, we have more than doubled assets in our U.S. retail business, thank you impart to our unique and differentiated, managed architecture model, which combines our strong internal capabilities with best-in-class third-party institutional managers. Our U.S.

retail business generated almost $5 billion in net flows in 2017, which is especially impressive as many players experienced net outflows.

We have delivered a similar success story in Canada, where we have been consistently generating positive net flows in our retail business; in fact we ranked fifth in the country based on net flows in 2017, up two positions from five years ago. This is a significant accomplishment in a competitive market.

Overall our WAM business had a fantastic year in 2017 with core EBITDA and core earnings increasing 22% and 28% on a constant currency basis over 2016. In 2017, we generated strong top-line growth in core earnings and identified the key priorities, which will leverage a strong foundation and make the most difference to our success moving forward.

Our future is exciting and I believe, we are in a great position to further transform our business. I will now like to ask Phil Witherington to review the highlights of our financial results for the year, following Phil’s remarks, we will then open the call to your questions. Phil..

Thank you, Roy. Good morning, everyone. As Roy mentioned, we delivered strong operating results in 2017. Net income was adversely impacted by the $2.8 billion post tax charge, relating to the upfront impact of U.S. Tax Reform and portfolio asset mix changes in our legacy businesses.

However, strong full-year operating performance is demonstrated by continuous double-digit growth in both core earnings and sales measures. Our fourth quarter metrics were mixed, largely due to the charges I just mentioned and the normal occurrence of some favorable items in the prior year.

I will highlight some of the key drivers of our fourth quarter and full-year performance in the next few slides. Turning to Slide 14. Core earnings remains solid, although lower than the prior year as the fourth quarter of 2016 included $142 million of favorable tax settlements and an $80 million catch-up in core investment gains.

Excluding these two notable items, core earnings increased by $140 million or 13% from the prior year, driven by strong new business and in-force growth in Asia and higher fee income in our Wealth and Asset Management businesses.

A reduction in equity hedging costs of $33 million, higher earnings on surplus from realized gains on available for sales equities and gains from policy-related items in the United States compared with losses in the fourth quarter of 2016.

We delivered full-year core earnings of $4.6 billion an increase of $544 million or 14% compared with the prior year despite the $240 million P&C Reinsurance claims provisions we recognized in 2017. Turning to Slide 15.

You can see that while core earnings were strong in the fourth quarter of 2017 they were offset by the $2.8 billion charge related to the upfront impact of U.S. Tax Reform and portfolio asset mix changes in our legacy businesses. I will address the impacts of the U.S. Tax Reform in more detail later.

All other items, including the mark-to-market impacts from equity markets and interest rates were largely offsetting, although two of these classified within other items are worth noting.

Firstly, as Roy mentioned, in the fourth quarter we restructured our Thailand insurance business creating a lien digital first pilot, which resulted in a $39 million restructuring charge. And secondly, we booked a gain from a legal entity restructuring that improved the cost efficiency of our captive reinsurance agreements.

Slide 16 shows our source of earnings analysis. Off note, expected profit on in-force business increased 7% from the prior year, primarily due to growth in our global wealth and asset management businesses and in-force growth in Asia.

The impact of new business improved versus the prior year, reflecting higher APE sales across Asia and a favorable impact from pricing actions in Canadian retail insurance, partially offset by higher non-deferrable acquisition costs in our wealth and asset management businesses.

We incurred net policyholder experience charges of $34 million post tax in the quarter including a modest charge for U.S. long-term care. Long-term care has been back in the news recently and I wanted to specifically address it. We remain satisfied with our long-term care reserves.

The Canadian IFRS valuation basis uses current best estimate assumptions plus margins for adverse deviations on all our reserves, including both the active and disabled blocks.

We completed our most recent triennial review in the third quarter of 2016 and updated our assumptions at that time based on our recent experience and since that update our experience has been close to neutral on average.

At the end of 2017, our IFRS reserves for long-term care were $34 billion, including $11 billion in provisions for adverse deviations and were 30% higher than U.S. statutory reserves. Management actions and changes in assumptions reflect the pre-tax charges from U.S. tax reform and portfolio assets and exchanges. Most of the impact of U.S.

tax reform shows up here as the majority of the impacts relates to adjustments to reserves for future taxes. On Slide 17, you can see that we delivered strong net and gross flows in our wealth and asset management businesses, and this quarter marked out 32nd consecutive quarter of positive net flows.

Net flows of $3.7 billion in the quarter; reflect the net inflow from each of our three operating divisions, solid institutional flows and lower retail redemption rates in the United States. Of note, last year we benefited from the funding of three large institutional mandates in Canada and Asia.

Gross flows of $32.9 billion were down 11% from the prior year quarter. The decrease was mainly due to the non-recurrence of the large institutional asset mandate - asset management mandates referred to a moment ago, as well as the lower retail sales in Mainland China.

This was partially offset by strong retail sales in Canada and higher flows in our retirement businesses. For the full-year, net flows were $17.6 billion, up $2.3 billion and gross flows totaled $124 billion, up 5%. Turning to Slide 18 and insurance sales. Insurance sales were $1 billion in the fourth quarter of 2017, down 3% versus the prior year.

In Asia, insurance sales increased 7% from the prior year, despite this driven by strong growth in Singapore and Vietnam partially offset by lower sales in Japan from increased competition in the corporate segment.

In the United States, we generated high life insurance sales, which benefited from continued acceptance of our recently re-priced term product and higher universal life and variable universal life sales. This was partially offset by the fourth quarter of 2016, being the last quarter for retail long-term cash sales.

In Canada, insurance sales declined 31% from the prior year, largely the result of 2017 re-pricing actions in retail insurance and strong prior year sales in advance of regulatory changes.

For the full-year, insurance sales increased by 23% to $4.7 billion driven by strong group benefit sales in Canada and continued strong growth in Asia, excluding group benefits which can be variable and U.S. long-term care, sales increased 13% from the prior year. Slide 19 shows our new business value generation.

In the quarter, we delivered strong growth in new business value, which increased 11% from a year ago to $389 million, driven primarily by a 15% growth in Asia NBV. Japan new business value increased to 7% from the prior year, as a favorable product mix and actions to improve margins more than offset lower APE sales.

Hong Kong NBV increased by a solid 21%, in line with sales growth and Asia Other new business value increased 12% as the impact of stronger sales growth was moderated by product mix. Asia new business value margin was 37.7% in the fourth quarter, in line with the prior year.

For the full-year, new business value grew 24% to $1.5 billion with strong contributions from both Asia and Canada. Asia new business value margin for the full-year increased by 2.3 percentage points to 34.1% driven by product actions to improve margins and scale benefits.

Turning to Slide 20, our assets under management and administration or AUMA at the end of fourth quarter continued to exceed the $1 trillion mark and were up 11% from the prior year on a constant currency basis, driven by strong investment returns and continued positive customer inflows.

Our wealth and asset management businesses achieved AUMA of $599 billion, up 14% from the previous year, driven by similar factors. Turning to Slide 21, in the fourth quarter of 2017, U.S. tax legislation was passed into law and lowered the U.S.

federal corporate income tax from 35% to 21% and placed limits on the tax deductibility of insurance reserves. This resulted in an upfront charge of approximately $1.8 billion post-tax with an expected ongoing benefit to net income and core earnings of approximately $240 million per year commencing in 2018.

So in conclusion, in 2017, we delivered $2.1 billion in net income, achieving $4.6 billion in core earnings, up 14% from the prior year, generated APE sales growth of 18% and new business value growth of 25% in Asia; continued to generate positive net inflows from our wealth and asset management businesses; and raised the dividend for the fourth consecutive year.

This concludes our prepared remarks. Operator, we will now open the call to questions..

[Operator Instructions]. The first question is from John Aiken of Barclays. Please go ahead..

Good morning.

Roy, in light of the media reports that came out earlier this week, can you let us know where the strategic review on the North American legacy operation sets and what options may or may not be still on the table?.

Yes. Thanks, John. I guess the first thing I have to say is as I’ve said many times in the past is that we are not going to comment on any rumors or speculation and that probably goes without signs. But what I want to reiterate is that we do believe that we have got great businesses in the U.S.

We have got tremendous friend, John Hancock and we have also got tremendous employees. Having said that, we do have some legacy challenges and we are not alone in that space. The recent appointment of Marianne Harrison as CEO and President of our U.S.

Division and the appointment of Naveed Irshad to run North American legacies, I believe, really demonstrates our focus and our commitment to the U.S., but our desire to really drive stronger performance and deliver a better value, not just for the shareholders, but also for customers.

So I think the real big take widely with you is that running and driving our legacy businesses for greater performance is a key priority for us and as the series of areas that we are focused on to deliver value in that space..

Roy, insight of any sale or spinoff, is there a timeline when we can expect to see any material drop in the levels of contribution from the legacy businesses?.

Well, there is not one magic silver ball that will solve all our problems in legacy space. So I think there are many different focus areas and obviously looking at in organic opportunities, there is something that we continue to focus on. But there are many focus areas in terms of delivering greater value.

And again, Naveed can talk a little bit more about this, but it covers a wide range of focused areas from client’s management to pricing reinsurance. Naveed, you may want to share a few more thoughts on that..

Yes, it's very clear to me that to optimize value, we need to take a target approach lock by lock. So as Roy said the potential levers drive value include organic and inorganic options, and I expect many of these actions will have an impact in 2018.

So for organic, many of the initiatives are actually already underway, this includes rerates, conversion buyout programs, operational expense efficiency programs and clients management improvements. So quite optimistic about the programs we have in place..

Great. Thanks, I will re-queue..

Thank you. The following question is from Steve Theriault of Eight Capital. Please go ahead..

Thanks very much. Good morning, everyone. First, maybe I could ask Anil on new business value in Asia, 9%, I wouldn't call that super low in terms of the growth rate for Q4, but let’s take the second half of 2017, closer to 10% growth was well below the 20 and above growth we have seen and gotten, used for some time in terms of new business value.

Can you give us some detail, why that’s slowing, are you intending to slow it, and give us a sense of what you expect going forward?.

Thanks, Steve. So, just to kind of reiterate the full-year growth on NBV was 25%. On quarter four specifically, NBV grew by 15%. So on a constant dollar basis, if you want to kind of remove the noise that gets created on account of FX gyrations, the growth was still kind of pretty strong in our view.

So I wouldn't say that we have kind of encountered slowdown. In many ways, there are some seasonality factors that can come into play, but 15% we still believe is a very strong growth for Asia..

Should we expect generally, there is some seasonality first half versus second half or is it a little bit of a Q4 impact?.

Yes. That’s a great question. Typically, we kind of experienced some seasonality for 2017 quarter four and if you want to kind of go back and see our results of 2016, you’ll probably observe similar trends. So, yes, typically the quarter four kind of see some seasonality kind of variations..

Okay. And if I could, just to make sure I understand, probably for Phil, I wanted to make sure they were the material tax benefits last year.

Is that that they were lower this year or was there no tax, like I think last year, it was $0.07 and should we think of it as $0.00 this year or was it - how should we think about that? Seasonality of that as well?.

Yes, Steve, so the tax benefits that I referred to in Q4 last year was there were one-time items relating to the release of some provisions for uncertain tax positions that was resolved in the fourth quarter of 2016, so a distortion at that time..

Okay. So, no resolution for this year. Okay, I will re-queue. Thank you..

Thank you. The following question is from Meny Grauman of Cormark Securities. Please go ahead..

Hi. Good morning. Just going back to the legacy business, we have had two notable transactions in the variable annuity space in the U.S.

and I’m wondering when you annualized those transactions what are your takeaways from annualized specifically?.

Yes. Thanks, Meny. Look it’s hard to read too much into the transactions from the day that we get and that is publicly available. But I guess I would reinforce the comments that I’ve made before and then is a portfolio optimization for us is one of our five key priority areas.

And therefore, improving the capital efficiency of our business is going to be a focus for us in 2018 and beyond. And within that portfolio of activities, BSO is a key lever for us and one that will get more focus and attention.

And again, with the appointment of Naveed, we believe that we are going to get more resources decked against that at that space. But certainly looking at the fact that there are more transactions is a positive sign I believe..

Okay. Thank you. And then just a separate question in your reduction of allocation to ALDA, you talk about 12 to 18 months process.

And I just want to clarify, is that just tied to sort of the liquidity of the positions that takes time to adjust or is there any other consideration that is a part of that 12 to 18-month period?.

Hi, Meny. It’s Scott Hartz. Yes, it is a somewhat illiquid portfolio, so it would take some time. But I would also say one of the objectives as we sell these things is to sell them into products that we would continue to manage to support our asset management franchise and that of course, would take yet a little bit longer time..

Thank you. The following question is from Nick Stogdill of Credit Suisse. Please go ahead..

Hi. Good morning. My question is just on long-term care. Phil you called that the experience has been neutral. I think it was a small negative for the second consecutive quarter.

So just some additional details on what you are seeing? And then my broader question is just on the pricing initiatives, we haven’t had an update in a while I believe in the triennial review, you were looking for a 20% price increase virtually all of the blocks.

Maybe, if you could give us an update on the progress there and how much the price increases you are getting probably across it?.

Yes. Thanks, Nick. I think it’s Steve’s best place to respond to that one..

Sure. Hi, Nick. Yes, on LTC, may be I will step back in terms of what we saw for policyholder experience in the U.S. this quarter was a lower rate of debts and that actually benefited our U.S. Life business with a nice claims gain.

We also saw conversely in Long-term care, where there were fewer desks resulted in a moderate loss and also in our annuities business. So I think, the point that Phil made in his comments around LTC experience since the 2016 basis change, while its bounced around a bit quarter to quarter, it has been roughly neutral.

And your second question with respect to rate increases, what I can tell you is we continue to make a meaningful progress on the rate increases that we have been going for. We continue to believe that they are actuarially justified and we are entitled to all the rate increases and we are making good progress there..

On both the number of states and the level of requests, isn’t you are making progress on both sides of that?.

On both. Yes..

Okay, great. Thank you..

Thank you. The following question is from Gabriel Dechaine of National Bank Financial. Please go ahead..

Good morning.

So when you say neutral, I mean for the year, your experience was close to zero for the [operative bar] (Ph)?.

Yes. Gabriel. It’s Steve. So, since we updated the assumptions in 2016 in Q3, the experience has been roughly neutral. I think for full-year 2017, we are slightly negative on Long-term care..

Okay. All right. So a couple of questions here. Capital deployment, when you do free up $1 billion net excess capital was you downsized all that, what are the priorities for that capital deployment to replace the $70 million I guess? And then I guess that something that jumped out at me was you launched these 2018 efficiency initiatives.

When will you be able to quantify the impact of those initiatives and more importantly I guess is this going to be different than what we saw from the E&E program had a lot of fanfare, yes you have got $500 million of cost saves and that’s great, but for shareholders that really yielded very little to the bottom line, or nothing really, is there going to be a different outcome this time?.

Thanks, Gabriel. This is Phil. So, I will take the first one on capital deployment, and then move on to the expense efficiency measures.

Firstly on capital deployment, we haven't made any decisions at this point, just to how we will deploy the net $1 billion benefit that we expect to generate from the change in the asset strategy of our legacy businesses.

But what I can comment on is that we are in a position, where we do have a number of organic growth opportunities that divisions present us with. So we have clearly exposure to our growth in Asia and our wealth and asset management businesses. So, we have to update on that as and when we generate that available capital. Moving on to expenses….

If you don't mind ….

Yes. Go ahead..

Deleveraging seems to be an important priority like or do you not see that as a constraint when you are maybe selling some legacy business, is that a loss?.

So, we don't see it as a constraint. Our capital position remains healthy and we are satisfied with the current level of leverage. I will comment that we continue to stand by the 25% long-term leverage ratio and we do plan to transition to that in the coming years.

I should highlight that in the calculation of our leverage ratio, I do think we are somewhat conservative and we include the perpetual [preferential] (Ph). And we classified those as getting our leverage ratio and that does add 4% to 5% percentage points to that ratio.

But nevertheless, including the preferentials we do expect to get back down to 25% in the medium-term..

And let me just add Gabriel, leverage and getting our ratio down to 25% is still highlight, is a priority for us. So when we look at the capital relief we get from the older action we have taken plus further optimization in the capital space, we have some options.

So I think for the way we think about it is that getting our leverage ratio down will be one of the priorities, but at the same time we have got some tremendous organic opportunities that we believe are going to also fuel growth for the franchise in the future.

So it’s about looking at those opportunities vis-à-vis the leverage objective that we have in the longer term and the decisions we have made on a case-by-case basis..

And then may be on to your second question, the 2018 efficiency initiatives, so yes we have launched a number of efficiency initiatives to deliver efficiencies in 2018. Those are quantified and embedded in our internal plans. We haven’t yet at this stage quantified them externally. I don’t feel it’s appropriate to do so at this point.

But we will provide more information likely in the middle of the year when we are planning an Investor Day.

I think when it comes to these efficiency initiatives, there are some that are very basic which involve really instilling an expense culture within the organization and that’s something that we started in 2017 and I think you can see through our cost growth in 2017 that it has been lower than in previous years.

But it’s not only about instilling our culture of expense efficiency and driving the discipline particularly around discretionary expenses, it goes much deeper than that. We are making investments to also automate processes, digitize processes.

And these are things that are absolutely consistent with the broader strategy, because the more we can automate, streamline, simplify, digitize, we are able to improve the experience for both our employees and our customers. So this is why I think you will see the focus in actually 2018 and beyond..

So let me add to that, Gabriel. We have called out expenses and expense efficiency is one of our top five priorities as a franchise. It’s embedded in our plans and our goals and the objective of our executive leadership team. And we do think that there is a tremendous opportunity for us to drive value through the areas of focus that Phil mentioned.

So yes, we will need to demonstrate performance in that space but we believe that the opportunity is quite significant to extract value..

Thank you. The following question is from Humphrey Lee of Dowling & Partners. Please go ahead..

Good morning and thank you taking my questions. Just to follow on long-term care. Obviously the charge taken by GE kind of caught people by surprise.

I was just wondering if you can provide some color in terms of how your block of business being different from GE’s may be on a policy basis or on the average benefits or anything that you can provide that would be helpful?.

Hi, Humphrey. It’s Steve. I will take that one. And it's difficult to make a comparison to GE’s business, we don't know their business and there is not a lot of public disclosure, but what I would point out or reinforced is, the reserving standards that we are subject to under Canadian IFRS are significantly different than U.S. companies.

We as you know we do deep dives on our assumptions and update them and reflect them in current period income and on the balance sheet, we have done those deep dives every three years and continue to track experience against those assumptions. So Phil’s point about our IFRS reserves are 30% higher than our U.S. statutory basis. That’s C$10 billion.

It's a very substantial margin to what we would hold on the U.S. basis and I think it points to the comfort level that we have been updating these assumptions overtime.

The other thing I would point out, another difference is the fact that under the Canadian standards, we have to every year we have a professional third-party actuarial peer review of our valuation. It’s another check and balance on the adequacy of our reserves, that's not required in the U.S.

So I think there are a number of things that with our management of the business, put us in a different position than some of the U.S.

companies and then the other point is, how aggressive have we been in terms of managing the business through rate increases and the opportunities that Naveed outlined in terms of really proactively managing the claims and managing this business on an ongoing basis, we are going to commit significant resources to doing that..

Got it. And then maybe a question for Naveed. I think in his response to one of the question he talk about there are some switch or surrender offers that is ongoing.

I was just wondering if you can provide some color, some VA related surrender offers or is that for something else?.

Yes. Hi, Humphrey. Yes, we have initiated that conversion program in Canada on the Seg-fund business. This is GMW B to investment oriented exchange program. So it's just started, we have an initial success on that. The story there is that customers may not need the guaranteed income and maybe looking for more upside, lower fee sort of product.

So that’s the experiment that we have been running, we expect to ramp that up further and we are also looking at potential buyout programs both in Canada and the U.S. and our projects are underway to launch those..

Okay. Thank you..

Thank you. The following question is form Sumit Malhotra of Scotia Capital. Please go ahead..

Thanks. Good morning. I wanted to start with the ALDA portfolio and this is probably going to be for Phil or for Scott. So in taking the charge for I guess the portfolio divestitures this quarter, you have been pretty clear that the sales are still to come.

So, fair to say that the bulk of this charge or provision that you have put through relates to the PV effect of where the replacement assets will be returning for you relative to the assets you have sold, it has more to do with that than it does with losses on sale.

Is that the right way to think about it?.

So, correct, Sumit, the $1 billion charge, just to clarify, in no way reflects any losses on the portfolio, the older portfolio itself. What it reflects is the impact of changing the assumed rate of investments returned from a return on all the portfolios to return the alternative portfolio, which will be a corporate bond portfolio.

So that’s the entire comp liability effect of the asset portfolio change..

So, in the six asset classes that are comprised within all the divestitures you are contemplating here, are they in a couple of specific areas or it’s spread out and at least by my math, are we talking about a notional in the $5 billion or $6 billion range?.

So, for reasons of commercial sensitivity, we are not actually giving any details as to which asset classes we are seeking to divest or in fact the dollar amounts of the portfolio that we will be divesting. Our focus there is really on maximizing value to our shareholders. So we will have to update you on that in due course..

Well, let’s go about this maybe a different way and perhaps it’s more philosophically for Roy. You have talked in great deal over the last year about movements in the legacy assets. I thought like especially after you made the return assumptions review in Q3 around ALDA, it didn’t seem like making that portfolio small.

It was necessarily one of the top priorities.

So to put this more directly, do you contemplate or are you expecting further reductions in the size of this portfolio or has this move gotten that booked to a level you are more comfortable with?.

Yes, look, it’s the same question. So I think what I would say from the outset is that ALDA is a fantastic class for us and has performed extremely well. In fact over the last five years, we have delivered a 9% return.

And the review that we conducted over the last four, five months of 2017 really had us come to the conclusion that generate some capital efficiency, we felt that we could adjust that portfolio and fine-tune it so to speak to get to a place that we felt more comfortable with.

So, the short answer to your question is that we feel comfortable with this adjustment that we have the portfolio where we need it to be. So we don’t expect any further changes..

Okay. And I am going to stay with a level of comfort and especially as it relates to the balance sheet and capital.

So leverage right now on your current calculation that your investors are all using at about 30% MCCSRs going away but even on that basis, 224, somewhat lower than we have seen from the company in the recent past, how do you characterize where your balance sheet and capital sit right now particularly relative to some of the divestitures the company might be contemplating in the legacy portfolio?.

Okay. So, this is Phil, I will take that and then Steve Finch might reach to comment. So we do consider our capital position to be healthy.

And in fact the strength of our capital position was one of the factors that enabled us to make the portfolio decision that we made in December to reduce the rating of older assets in our portfolio and that’s not the cash – that’s really a valuation question.

So, I think that does illustrate the capital strength providing the flexibly for us to make some strategic decisions. We don’t see our capital position as a constraint. I do expect in the short-term our leverage ratio to maintain – to be fairly stable at 30%.

But then in the medium-term trend down towards the 25% target that we have communicated in the past. If we look forwards into the like-out regime, again, our expectation is that we are confident that our capital position will remain healthy. And so, it’s not something that we see as a constraint now or in the near future.

Steve, would you like to comment further?.

The only thing I'd add is that as we look at any other potential opportunities, I think all the change that we made is a good example; we are looking at the total value to shareholders.

We were willing to accept a charge to net income in order to free up a significant amount of capital and that's the type of wins that we would be applying for any other related activities..

And the last one and some of this again because for Roy and Phil, it's relatively early days, some of these may be more philosophical in nature, but as you review your opportunities to make LTC and to some extent VA, smaller parts of the business.

Would there be any reluctance on your part to consider opportunities that may require an external capital event, and what I'm trying to say is your losses are large enough, would you be – could you start to make having to externally boost capital in order to move on from these businesses and the losses that they may require or do you think this can be done in the context of organic capital growth?.

Let me make it quick comment, Sumit, and then I will handover to Phil, I guess what I'd say is like a reiteration of the comment that was made earlier and that is we do not feel constrained in terms of our ability to execute against their ambition in the portfolio optimization space.

We see that there is an opportunity for us to focus more ambitiously on managing our legacy businesses and that will include organic opportunities, but also inorganic opportunities and we do not feel and see that there is a limitation from a capital perspective in relation to what we want to do and how we want to do that, but I will ask Phil to perhaps provide a little bit more color..

Sure. Thanks, Roy. So, the things I would add that is that when we think about this as a management team, as a leadership team, we are very clearly now providing a shareholder value lens. So, we look at the opportunities in context to how can we improve and increase the value to shareholders of the company.

But that also a key factor in that is capital efficiency. So it's not so much what might happen to the accounting balance sheet, but how can we make the organization more efficient from a capital point of you? And to reiterate Roy’s comment, we don't feel constrained at this point.

We are very clear that optimizing the portfolio is one of our highest priorities..

Thanks for your time guys..

Thank you. The following question is from Doug Young of Desjardins Capital markets. Please go ahead..

Hi, good morning.

Just back to ALDA, I guess, maybe for Phil, the decision compared back your exposure there, how much of that was related to the pending adoption of IFRS 2017? And then second part of that is, starting in Q1, should we be expecting the investment gains to be a little bit higher than normal, because your ALDA is still on the books, but you have assumed you have sold them, and you have assumed a lower return on other assets.

So, I’m just trying to get a sense of, for 2018 as you are paying the portfolio back, should we be expecting investment gains to trend a little bit higher?.

Okay. Thanks, Doug. IFRS 2017 was there many factors that we did consider when we were evaluating the decision around the ALDA portfolio and portfolio mix. IFRS 2017, wasn’t really one of them, it’s too early at this point to comment on IFRS 2017.

We have initiative IFRS 2017 conversion project, but it’s not something that is causing us to make strategic or management decisions at this point. In terms of the investment, the outlook for Q1 experience gains, I can’t really comment on what I would expect Q1 to look like.

So, I think that one, we will just have to wait and see and cover it during the Q1 earnings goal..

But in theory, that’s pretty well the way to think of it, because you haven’t sold them. You are generating higher returns relative to what you have expected in the PV. We should be expecting essentially – not to quantify, but we should be expecting potentially higher gains..

No, I don’t think we should be expecting any particular boost or gain from – in the short-term an investment experience from the ALDA strategy change..

Yes. Absolutely so many other factors about when, on what the Q1 investment earnings will be. So, it’s really very difficult to predict what that looks like and to make a theoretical discussion around the drawdown of our ALDA sales.

We would just be looking at one aspect of many that will contribute to where our investment earnings will actually end up..

That’s fair. And then just second on Canada, I mean core earnings in the quarter were down 7%, I mean on an annual basis, they were up. I think in the quarter, there were some policyholder experience headwinds, just wanted to flash those out.

And what other types of pressures are you facing in Canada in the quarter, it just seems a little weaker than what I would have expected? Thank you..

Yes, Doug. It’s Mike Doughty here. There were really two things in the quarter. One was just comparing it to last year; there was a one-time gain from early reinsurance recapture. So, that combined with really policyholder experience on a couple of large life claims was the big driver in this past quarter..

Okay. Thank you..

Thank you. The following question is from Paul Holden of CIBC. Please go ahead..

Thank you. Good morning. Just want to ask question related to anticipated hedging cost and for two reasons. One obviously, falls on both equity and rates has increased this quarter. And then second point is your hedging strategies have evolved overtime. So, I’m not sure if historical precedent is all that relevant.

So maybe if you can just give us a flavor of in a time period like January, what should we expect happened to hedging cost included in core earnings?.

So, it’s Rahim Hirji here. Paul thanks for the question. In terms of our general hedging program, our hedging program actually has worked quite effectively both in January and the first part of February and it’s right in line with what we would have expected the program to have.

So we have a number of different instruments in there and both during the period of lower volatility in 2017 and earlier in 2018, we actually added some options into our program and that has dampened the amount of trading that we would have had to do over the first week of February.

But overall, I would say our program is right in line with what we would expect and it’s been actually quite effective..

Okay.

So effective in terms of what it's intended to do and you are also saying effective in terms of cost efficiency as well?.

Yes..

Okay. Okay. Fair enough. And then a question regarding the Thailand digital pilot. I assume since it's called a pilot, it is kind of testing it out in one specific country.

Is this success may be roll it out into some other Asian countries where you either have no penetration or lower penetrations, may be you can confirm that thinking and if that's the case ballpark how long do you think this pilot would need to go on for before you roll it out to other countries?.

So, hi, this is Anil. So, yes, we have kind of taken a step to train our resources and our focus on driving them very high level of digital interactions with our clients in Thailand.

So in many ways as you pointed out, this serves as a very strong pilot for us to see whether we can take some of these digital capabilities to some of the other Asian markets. I just want to add that while we are going this in Thailand, we are not kind of stopping our digital initiators in the rest of Asia.

And the way we are seeing this is, we are employing our efforts both in terms of simplifying our interactions with customers at the time of onboarding, but also as we can manage the relationships with our customers thorough their lifecycle. We have certain guide rails and certain kind of proof points with respect to the Thailand pilot.

But as I said, it's kind of pretty much initial days in terms of our launch, but as we kind of go through 2018, we should be able to kind of specialize the impact that it's having on Thailand business and the capabilities that we would like to extend to the rest of Asia..

Great. Thank you..

Thank you. The following question is from Mario Mendonca of TD Securities. Please go ahead..

Good morning. If we could go back to Asia for just a moment and not so much the new business value but necessarily what falls directly into the source of earnings new business gains.

Those gains have been very, very strong over the last couple of years and I think you folks have done a good job describing why that the product mix changes distribution, everything else.

When you think 2018 now, is there anything available to you from a product mix perspective, cost perspective, distribution that can support the sort of margin gains that we have seen in the last couple of years, because clearly that the improvement in the margins what is driving that, on top of the very good quantum like the size of the sales, the growth in the sales, but what else can you do, because this is been a really special two years in terms of Asian new business?.

Yes. This is Phil. I'll make a start and Anil feel free to supplement from a strategic perspective. So, financially, we certainly have seen improvements in both new business value and new business gains over the past few years in Asia.

I think one of the key points for us is that as we continue to grow our scale, we will become more expense efficient and that's one of our key priorities. So back at recall at the 2015 Investor Day, we said at that time that we would expect our margins to be correlated to our improvement in scale.

And I think that's still true today when we look at our business in Asia. What we can’t compare to our peers in Asia is the new business value margin that we are able to achieve.

And if we look at where we stand relative to our market leading peers, I still think there is work for us to do to improve our margins, particularly outside Hong Kong and Japan. So I think that’s where our focus is scaled. Anil..

Yes, so just a couple of thoughts from my side. So I think while we are looking at increasing our distribution force, both on the agency side as well as leveraging some of the exclusive bank partnerships that we have in Asia, our overwhelming focus has been on quality as well.

So we have been driving greater productivity, a good proof point of that is that our MDRT participation in 2017 jumped by 40% over 2016. And that obviously kind all goes well both in terms of kind of A, expanding our distribution, but also ensuring that we are getting the right productivity leverage from our distribution channels.

Just to remind, we also run a very balanced set of distribution as Roy alluded to that in his initial comments, on back of some of the bank partnerships that we have been able to sign up. So that has been a key focus area both in terms of ensuring that we grow the distribution but also focus very, very intensely on quality..

Yes Mario, I would just add a couple of comments. So I think Phil and Anil talked about the key points. But on distribution I still think that there is more opportunity for us in Asia. And as Anil highlighted on the bancassurance space we have now been very successful in signing up exclusive partners.

But the penetration of the customer base of the partnerships that we have is still relatively low. So we think there is further opportunity to dive deeper in and improve our penetration rates in the bancassurance space, obviously continuing to scale the quality of our agency force.

And then finally, the comment that Phil made around scale is again another important one. We shared it on our Investor Day in 2017 that three years ago there are three businesses in Asia that had more than a $100 million of annual APE sales and now we have seven.

And that scaled benefit will continue to drive efficiency upside and improve our margins..

Okay, so. Two final point on it. But in 2017 the APE in Asia was up to 14%, the new business gains recorded in the source of earnings were up 68%. So clearly there was a margin benefit. Not for origin about it.

But is it fair to say that going into 2018 the APE growth could remain strong but the connection, does that disparity between the new business gains growth and the APE growth may be won’t be as wide? Is that a fair statement?.

Mario it’s Steve. May be I will one comment on that. I think we will be cautious about projecting for that type of situation.

We do see new business gains bounce around a bit, but I think the key points here were that, the underlying fundamentals of the business have been sound and are what driving the margin improvement in that sustainable, and I think there is more upside there if as Anil executes and drives the same type of activity.

But I don’t think we should speculate on just how much that will flow through the new business gain line..

But still some upside to the margin I guess Steve is the takeaway then from this?.

Yes, absolutely..

Just on that point Mario, this is Phil.

To improve the transparency around new business gains recognizing that our business in China does get recognized at 100% in the SOE analysis, we are planning to revise SOE analysis before we release our first quarter results to provide greater granularity in the SOE and that will include splitting out the minority interest component so that you actually get to see I suppose the Manulife shareholder impacts of new business gain and just the clarity, the impact of minority interest was in the order of $28 million in the fourth quarter..

I think that could be really helpful to see.

My second question then goes back to the ALDA, now IFRS 2017, I have done everything I can't understand it, it's not as easy as I'd like it to be, but one thing I have understood is that the connection between the expected return on the assets and did that rate at which you discount the reserves that just doesn't exist in the same way it has in the past.

And Steve if you want to correct me on that I'm happy to take a lesson from you on this.

But if that's true, if I’ve got that understanding, if I understand that correctly then I don’t really see how all that the fits into IFRS 2017? So may not have been an immediate consideration, but is that a consideration going forward and so far as the extent which you use ALDA?.

Well, I'll start Mario, your understanding is correct, in terms of the disconnect between the assets and liabilities, I probably pass it over to Scott, but before I do, there is an accounting treatment but then there is the underlying economics and the appropriate asset classes to back our business and I think that's the way we like to manage the business, recognizing also the implications on the accounting.

So, Scott..

Yes. Thanks. And that is the point I was going to make, we really start with the economics and for these long businesses, they clearly make sense to invest a healthy amount into ALDA, the returns are greater as Roy has mentioned.

And I guess the other thing I would point out is that one of our concerns with ALDA is the volatility that runs through our earnings, and so one of the benefits of scaling back is a little bit less volatility. That’s going to be no different in IFRS 2017.

In fact, again IFRS 2017 as I understand, it's still evolving, but I think, we will pick up probably more volatility in the fixed income as that's more truly mark-to-market, the ALDA is really not going to change from a quarter-to-quarter perspective, but I would go back to, we think it's the right economic strategy and that's going to be a big driver of our investment strategy going forward..

So just to finish up here, then.

If ALDA - if the decision is all economics, then why reduce the portfolio at all, I mean, this decision itself $4 billion, $5 billion, $6 billion will take stab at the number, if economics is driving force and I'm not sure I follow why you would still in the first place?.

I would say its where we start, Mario, and of course we need to consider sort of the accounting, but I will tell you as we thought through this decision another factor playing in is where do we see markets today and is now a good time to reduce.

If we had felt that these assets were undervalued and that was economically the incorrect thing to reduce it, we probably would not have made the same decision..

Okay. So you are done selling ALDA, maybe that's the right approach and then this is it you are done.

Is that fair?.

That’s our current position, market conditions change, other things change, but again I go back to the economics should be the biggest driver in the decision and that would indicate that will continue to be an appropriate strategy..

Thanks for taking the time. I appreciate it..

Thank you. The following question is from Tom MacKinnon of BMO Capital. Please go ahead..

Yes, thanks. Question is just really about the dividend increase. You had 14% growth and that was probably even higher if you take out the impact of currency in 2017. Your remittance has went up 18% and you still reiterated 10% to 11% medium-term core earnings growth objective.

But it doesn’t envelop 7 is – help me – can you talk about that a little bit of disconnect? It seems like your payout ratio might be closer to midpoint, but maybe you can give us a little bit of color there?.

Tom, let me start and I will hand over to Phil. I think you are highlighting the right things and that is the payout ratio. For us, our target is to have a payout ratio between 30% to 40% and with this dividend increase, where we are pretty much at the higher end of that payout range. So we feel comfortable with that.

And there are as you highlight a number of factors that will figure into a decision around the dividend increase. But we feel that we really abide by this philosophy of having consistency with our dividend increases in line that is sustainable long-term position on that.

So from a philosophic perspective, that’s sort of the grounding behind that final decision that we made. But I will ask Phil to provide some further commentary..

Yes, I think the only point that I would add is that we are confident about the future outlook for growth and I think there are as well as some headwinds and the strength of the Canadian dollar could be an earnings headwind for us.

We actually have tailwinds as well for example the higher earnings that we expect to achieve as a consequence of the tax reform changes in the United States. So on balance, the outlook is good.

But few of the points that Roy said, we felt that the one and a half cents increase in the dividend was the right approach and that’s what the Board had approved..

Okay. Thanks..

Thank you. The following question is from Darko Mihelic of RBC Capital Markets. Please go ahead..

Hi, thank you. I have two questions. The first one is for Marianne and maybe also for Naveed I’m not sure. But when I look at Slide 19 and I see new business value of the U.S. is 51 down from 59 and really relatively small in the grand scheme of things. The question is going forward, why broader selling step in the U.S.

at all, is that something that you are considering as part of a change to the overall U.S. business, I suppose the tax rate may have an impact here. But can you speak to what the view is on the relatively small almost inconsequential addition of sales that the U.S.

is having and what your plans are to either improve that or either change it?.

So, it’s Marianne here. Phil, Roy and Naveed, if you have anything if you want to add to, please feel free to. I would say that’s what you see in the results, no RTC sales, so that has an impact on the year-over-year perspective and I would also say the mix of sales as well has an impact.

We had higher sales this year on the term side and less on the international side, because of some of the re-pricing we did and so that has impact to the NBV. I’m stepping back more, I guess I will say strategically, we are right in the midst right now actually going through the strategic review in the U.S. and we have been looking at the U.S.

insurance business, and we really believe that there are opportunities for us in this space, also the market in the U.S. is significant and although the insurance business growth hasn’t been that substantial. The size of the market is huge and the need is certainly there.

And so we are looking at how do we want to address on going forward and are there opportunities for us to turn that business around and we really believe that there are.

As I said, we are still going through our strategic process right now, but I’m pretty confident that there is a place for it especially when we look at trying to meet sort of holistic needs of consumers we believe that that life insurance plays a key role and I also expect to see that that new business value in the next five years will be going out quite substantially as well, if you want to add anything..

Okay. And my second question is for Phil and perhaps Steve as well.

With respect to the Long-term care issue that sometimes comes up and it's not your fault, there are other things happening in the marketplace, but are you considering perhaps providing more disclosure, maybe a mathematical form that would help us better understand perhaps, for example, your success in rate increases perhaps giving us a proportion of states that are allowing it and the degree of success there, maybe giving us some information on the book in terms of what is group, what is not, maybe perhaps what is lifetime benefit, what is none, things like that that would help around out our understanding and perhaps, it’s given on a quarterly basis, would help us sort of answer questions instead of saying I don't know, many times to people when they ask questions on Long-term care.

Have you given some thoughts about that and is perhaps something that’s coming with the Investor Day?.

Hey Darko. This is Phil. At this point, we don't have any plans for additional disclosure, but we are putting source into how we will structure Investor Day and how we will structure our disclosures going forward. So happy to have feedback on that and to consider it during the course of 2018.

And on your specific point, so I will handover to Steve to find out his thoughts..

Yes. We appreciate the feedback and certainly when there is the size of the charge the GE announced I think was very notable to many in the market and I think as we look at that, we should consider when this business line is in the medium or if there are additional items we can provide that could be helpful, will get back some thought..

And this is Marianne here, I would add to that on the rate increase, there is a little bit of sensitivity there in terms of going to states and trying to get increases, one state versus another. So we do want to be careful to as well in terms of how much we disclose..

Fair enough. Thank you..

Thank you. The following question is from [indiscernible] of Bernstein. Please go ahead..

Hi, thank you for taking my questions. I have two questions regarding Asia. One part is on the Asia WAM business. We noticed that quite strong growth over the consecutive quarter and the years.

Just wonder any details regarding that where does the flow really come from, institutional or is it retails and any comments on the future run rate would be appreciated? And the second part…Yes, sir..

No. Go ahead..

Yes. The second part is really just regarding the China business, we understand you how the JV right now according to the news that the China is considering – is promising, probably next just like three years and five years program of the inventory allowed for insurers to hold that represent.

So, I just want to get comments regarding company how to think going forward? Any strategic review about it?.

Okay, great. It’s Paul here, I will start and then I will hand it to Anil for your second question. In terms of sales, we are quite happy with the sales in Asia.

It's a little bit disconnected from last quarter, because we did have some large sales as was mentioned earlier in Japan and Canada that are skewing the growth rate going forward that didn't occur in the fourth quarter, but when you look at that across the retail business as well as the retirement business, they are both extremely strong.

Hong Kong continues to drive number one market share in both flows and AUM from a retirement perspective and on the retail side, most of the countries were up year-over-year, China as well. The only pullback was a little bit of net sales in China get in money market.

But again, the quality of those sales relative to what we are selling is not a concern to us. So, we are quite happy with it in terms of the outlook, the flows and how we are positioned.

Anil, do you want add anything to that?.

No, I guess what you have covered that. I will address the second question, which is with respect to the forms in China. So we welcome any kind of reforms that opens up the insurance sector and to that extent, we are monitoring the situation very closely for specific guidelines. As you know, we have a joint venture partnership with Sinochem.

And on the ground, that partnership has worked exceedingly well for us. Sinochem has been a great partner, and both Manulife and Sinochem have been delighted with the progress that we have kind of seen in the China market and that’s demonstrated by the traction that we have seen both on APE as well as NBV sales in China.

So, we like the partnership and we continue to remain very, very optimistic about our prospects and the way we can serve the Chinese customer while monitoring the situation for specific guidelines as the market opens up..

Okay. If I may just squeeze one very slow question/comment, we see the Asian Other business guiding pretty big way, now it’s like once settled going to be ready.

Just wondering if the management is concerning like breakdown and giving more details on a constant regular basis than just showing the details on the Investor Day?.

Okay, [indiscernible]. This is Phil. So we did provide some additional breakdown of the various components of Asia at our recent Investor Day held in Hong Kong and Vietnam.

We have no plans at this point to provide quarterly updates and more granularity within Other Asia, but similar to the earlier comment, we are happy to receive feedback on how we could improve our disclosure and make it more helpful to the investor community.

So, we can talk about that offline and we can take into account now valuation of our disclosures..

All right. Thank you. This concludes today’s conference..

All right. Thank you, operator. We will be available after the call if there is any follow-up questions. Have a good morning, everyone. Bye-bye..