Manulife Financial and IBM Sign $70 Million Agreement to Support Business Growth

Manulife Expects to Realize Significant Savings and Agreement Expands Relationship With IBM

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MARKHAM, ON & TORONTO - 22 Dec 2004: Manulife Financial, the world's fourth largest insurance company, and IBM announced today a $70 million Cdn agreement to transfer the management of Maritime Life's technology infrastructure to IBM starting next year. As part of this agreement, IBM will manage Manulife's desktop PCs and servers as a service with variable pricing and the ability to scale up and down based on customer demand.

In April of this year, Manulife Financial acquired Maritime Life as part of its merger with John Hancock Financial Services, Inc., and is turning to IBM for technology support for the Canadian acquisition. This agreement also supports Manulife's strategic initiative to integrate acquisitions more efficiently and at a lower cost while having a flexible IT infrastructure that continues to serve the needs of Manulife's customers as the company grows.

This agreement is expected to provide Manulife with significant savings in information technology (IT) costs over the next four years.

Starting in 2005, IBM will provide Manulife with access to its computing resources to enhance the quality, performance and delivery of Maritime Life's technology systems. Under the agreement, IBM will take over the management of 3,000 desktop PCs and 200 mid-range servers.

Managing PCs as a service can help companies realize substantial cost savings, as businesses today can spend up to two to five times more than the actual purchase price of a PC for maintenance and operational support. According to the Meta Research Group, a single PC costs $2,000 to $5,000 US per year to manage with help desk support, countless fixes and maintenance.

"It is important to us to build on our existing relationship with IBM as an IT partner," said John Mather, Chief Information Officer and Senior Executive Vice President of Manulife Financial. "Our decision to expand on our business partnership with IBM allows us to further harness their IT expertise to support our strategic objectives for global growth and excellence."

This agreement builds upon Manulife's existing relationship that was announced in 2002. Under that agreement, IBM provides technology services and infrastructure support for the insurance company's North American operations, including help desk services, servers, storage, and desktop computers. IBM also has an agreement to manage John Hancock's IT services in the United States. This new agreement will significantly expand IBM's management of Manulife's infrastructure to include Maritime Life operations acquired earlier this year.

"As the insurance industry consolidates through mergers and acquisitions, IT service providers can help insurance companies rapidly integrate technologies, reduce costs and allow the companies to focus on their business," said Garth Issett, Vice President, Financial Services, IBM Global Services, Canada. "IBM is working with Manulife Financial to provide these benefits as they integrate Maritime Life's infrastructure."

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