A Conversation with Roy Gori on His Decision to Step Down as Manulife CEO
In a surprise move that has left some investors wondering what’s next for the Toronto-based insurer and asset manager, Manulife Financial Corp.’s chief executive Roy Gori announced his decision to retire earlier than expected. This unexpected development comes as Gori celebrates nearly five years at the helm of the company.
The Inspiration Behind His Decision
When asked about the factors that led to this momentous decision, Gori drew inspiration from an unlikely source: Vijay Merchant, a legendary Indian cricketer who once said, ‘Retire when they ask you, Why?, not Why not?’ This quote resonated deeply with Gori, as he explained in an interview.
"’He once said, âRetire when they ask you, Why?, not Why not?â’ Gori said. ‘Iâm humbly hoping that more people are asking âWhy?â for me.’"
Gori’s decision to retire was influenced by the company’s strong performance and his desire to step aside before anyone began questioning why he wouldn’t leave.
A Succession Plan in Place
Manulife has a well-planned succession strategy, with Phil Witherington, 47, set to take over as CEO in May. Currently, Witherington serves as the head of the Asia division and brings valuable experience to the role. Gori expressed confidence in Witherington’s ability to lead the company forward.
Business Momentum and Capital Release
Under Gori’s leadership, Manulife has achieved significant milestones, including a series of deals to de-risk its balance sheet. The most recent transaction involves Reinsurance Group of America agreeing to reinsure $5.4 billion of reserves. This agreement will allow Manulife to release $800 million in capital, which will be returned to shareholders through buybacks.
A Record-Breaking De-Risking Strategy
Gori reflected on the company’s accomplishments over the past year, highlighting the success of its de-risking strategy. The series of deals, which include reinsuring $13 billion of reserves with KKR & Co.’s Global Atlantic Financial Group and $5.8 billion of Canadian policies with RGA Life Reinsurance Co. of Canada, has resulted in a significant reduction in long-term care reserves and the release of substantial capital.
Market Reaction and Analyst Insights
The market responded positively to the news, with Manulife shares gaining 1.4% on Thursday. Analysts have welcomed Gori’s decision, viewing it as a strategic move that will drive the company’s valuation higher. Scotiabank analyst Meny Grauman wrote in a report: "This follow-on transaction was well-telegraphed, but there were still lingering doubts on managementâs ability to get it done… While we donât see Manulife shares reacting as dramatically to this deal as it did after Decemberâs announcement, we think that it will still help drive Manulifeâs valuation higher."
Conclusion
Roy Gori’s decision to retire has left a lasting impact on the insurance industry. As he steps aside, he leaves behind a legacy of innovation and strategic planning. With Witherington set to take over as CEO, Manulife is poised for continued success under new leadership.
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