MANULIFE FINANCIAL CORPORATION DBRS Morningstar assigned the rating equal to the Company's Issuer Rating of A (high) less two rating notches, which is consistent with DBRS Morningstar's notching approach for capital instruments issued by insurance holding companies. This is one notch below the rating of Manulife's Unsecured Subordinated Debentures.
RATING DRIVERS
Given Manulife's recent ratings upgrade, DBRS Morningstar does not see upward ratings pressure over the intermediate term. Over the longer term, if Manulife continues to improve profitability and de-risk by further reducing its exposures to product guarantees and long-term care products, while maintaining its capital profile, the ratings would be upgraded.
Conversely, persistent weaker and volatile profitability combined with a sustained deterioration in financial leverage and coverage ratios would result in a ratings downgrade. An adverse event causing regulatory capital to decline substantially would also result in a ratings downgrade.
ESG CONSIDERATIONS
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at: https://www.dbrsmorningstar.com/research/373262.
The Grid Summary Grades for
Notes:
All figures are in Canadian dollars unless otherwise noted.
The principal methodology is Global Methodology for Rating Life and P&C Insurance Companies and Insurance Organizations (
For more information regarding rating methodologies and Coronavirus Disease (COVID-19), please see the following DBRS Morningstar press release: https://www.dbrsmorningstar.com/research/357883.
The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found on the issuer page at www.dbrsmorningstar.com.
The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.
This rating is endorsed by
Each of the principal methodologies/principal asset class methodologies employed in the analysis addressed one or more particular risks or aspects of the rating and were factored into the rating decision. Specifically, the 'Global Methodology for Rating Life and P&C Insurance Companies and Insurance Organizations' (
This rating concerns a newly issued financial instrument. This is the first DBRS Morningstar rating on this financial instrument.
Generally, the conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. DBRS Morningstar's outlooks and ratings are monitored.
For further information on DBRS Morningstar historical default rates published by the
Lead Analyst:
Rating Committee Chair:
Initial Rating Date:
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Ratings
Date Issued Debt Rated Action Rating Trend Attributes
i
US = Lead Analyst based in USA
CA = Lead Analyst based in
EU = Lead Analyst based in EU
E = EU endorsed
U =
Unsolicited Participating With Access
Unsolicited Participating Without Access
Unsolicited Non-participating
10-Feb-21 Limited Recourse Capital Notes Provis.-New A (low) Stb CA
U
E
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