Source: The Canadian Press

Manulife Financial Corp. (TSX:MFC) says it expects to nearly triple its net profits to $4 billion a year by 2015.

President and chief executive Donald Guloien told investors Friday at a conference in Toronto that the financial recovery by Canada’s largest insurance company will follow “a very good glide path” over the next four years to reach the goal.

In recent quarters, the company has been repositioning its businesses to reduce capital market risks and improve underlying profitability, he said.

The CEO added that he expects that Manulife’s return on common shareholder equity — a widely used measure of financial performance — will more than double to 13% over the four-year period.

In 2009, Manulife’s full-year return on equity was 5.2% and the company earned $1.4 billion in yearly profit.

“My management team is prepared to stand behind these objectives and put their compensation on the line in order to deliver those,” he reassured investors.

Manulife has lost more than $3.3 billion in the last two quarters alone and has been under pressure from investors to turn around its finances.

However, Guloien stopped short of giving all of the specifics on how quickly the company’s financial target would be reached.

“We’re not about to get into the guidance game,” he said, declining to go into details about projections for 2011.

Toronto-based Manulife has grappled with billions of dollars in losses since the recession pummelled stock markets, eroding the value of the insurer’s investments.

In its most recent third quarter, Manulife (TSX:MFC) booked a three-month loss of $947 million, but that was lower than analysts had expected. The company’s second-quarter loss was $2.4 billion.

The company has also taken a big hit from the mark-to-market impact of lower equity markets and historically low interest rates that resulted in non-cash charges against the company’s reserve requirements.

The recent investor concerns about the company follow a backlash in 2009, when investors reacted negatively to Manulife’s plans to raise $2.5 billion in a major stock issue that would dilute the value of their shares.

“We’ve encountered a few speed bumps along the way,” Guloien said, reflecting on the turbulence the company has faced in recent years.

“I think we’ve been very open with our investors as we’ve encountered those speed bumps in talking about what the challenges are and how we’re dealing with them.”

In trading Friday on the TSX, Manulife shares fell 39 cents to $15.30, a decline of 2.5%.

The company, which had 24,000 employees at the end of 2008, operates around the world providing insurance and wealth management services as well as pension products, annuities, mutual funds and property and casualty reinsurance.

In the United States, Manulife operates through John Hancock Financial Services, Inc., a major American life insurance company headquartered in Boston the Canadian company bought in 2004.