UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

               {X} ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                            FOR THE FISCAL YEAR ENDED
                                DECEMBER 31, 2000
                           COMMISSION FILE NO. 1-15607

                      JOHN HANCOCK FINANCIAL SERVICES, INC.
             (Exact name of registrant as specified in its charter)

                  DELAWARE                                 04-3483032
       (State or other jurisdiction of                  (I.R.S. Employer
       incorporation or organization)                  Identification No.)

                               John Hancock Place
                           Boston, Massachusetts 02117
                                 (617) 572-6000
               (Address, including zip code, and telephone number,
        including area code, of Registrant's principal executive offices)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
                  Title of each class Name of each exchange on
                                which registered

    Common Stock, $0.01 par value          New York Stock Exchange, Inc.
    ---------------------------------    --------------------------------
    Series A Junior Preferred Stock
        purchase rights                    New York Stock Exchange, Inc.
    ---------------------------------    --------------------------------

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                                      NONE
             ------------------------------------------------------
                                (Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of the December 31, 2000 JHFS
Form 10-K or any amendment to the December 31, 2000 JHFS Form 10-K [X].

As of March 20, 2001, there were outstanding 309,708,790 shares of Common Stock,
$0.01 par value per share of the registrant. The aggregate market value of the
shares of the registrant's common equity held by non-affiliates of the
registrant was $11,155,710,615 based on the closing price of $36.02 per share of
Common Stock on the New York Stock Exchange on March 20, 2001.

                       Documents Incorporated by Reference

                                                      Part of the Form 10-K
                    Document                         into which incorporated
--------------------------------------------------  ---------------------------
Portions of John Hancock's 2000 Annual Report          Parts II and IV
--------------------------------------------------  ---------------------------
Portions of John Hancock's definitive Proxy            Part III
Statement to be filed on or about April 2, 2001,
for the Annual Meeting of Stockholders scheduled
to be held May 14, 2001
<PAGE>

Contents

FORWARD-LOOKING STATEMENTS.................................................. 3

PART I   ................................................................... 4
ITEM 1.  BUSINESS OF JOHN HANCOCK FINANCIAL SERVICES, INC................... 4
ITEM 1A. EXECUTIVE OFFICERS OF THE REGISTRANT...............................35
ITEM 2.  PROPERTIES.........................................................36
ITEM 3.  LEGAL PROCEEDINGS..................................................36
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................38

PART II.....................................................................39
ITEM 5.  MARKET FOR JOHN HANCOCK FINANCIAL SERVICES, INC. COMMON
           STOCK AND RELATED STOCKHOLDER MATTERS............................39
ITEM 6.  SELECTED FINANCIAL DATA............................................39
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
           RESULTS OF SEGMENT OPERATIONS....................................43
ITEM 7A. QUANTITATIVE AND QUALITATIVE INFORMATION ABOUT MARKET RISK.........43
ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA........................43
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
           FINANCIAL DISCLOSURE.............................................43

PART III....................................................................44
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF JOHN HANCOCK FINANCIAL
           SERVICES, INC. ................................................. 44
ITEM 11. EXECUTIVE COMPENSATION.............................................44
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.....44
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.....................44

PART IV.....................................................................45
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K..45


                                       2
<PAGE>

Forward-Looking Statements

      The statements, analyses, and other information contained herein relating
to trends in the Company's operations and financial results, the markets for the
Company's products, the future development of the Company's business, and the
contingencies and uncertainties to which the Company may be subject, as well as
other statements including words such as "anticipate," "believe," "plan,"
"estimate," "expect," "intend," "will," "should," "may," and other similar
expressions, are "forward-looking statements" under the Private Securities
Litigation Reform Act of 1995. Such statements are made based upon management's
current expectations and beliefs concerning future events and their effects on
the Company and may not be those anticipated by management. John Hancock's
actual results may differ materially from the results anticipated in these
forward-looking statements.

      These forward-looking statements are subject to risks and uncertainties
including, but not limited to, the risks that (1) a significant downgrade in our
ratings for claims-paying ability and financial strength may lead to policy and
contract withdrawals and materially harm our ability to market our products; (2)
elimination of Federal tax benefits for our products and other changes in laws
and regulations (including in particular the possible amendment or repeal of the
Federal Estate Tax) which the Company expects would adversely affect sales of
our insurance and investment advisory products; (3) as a holding company, we
will depend on dividends from our subsidiaries and the Massachusetts insurance
law may restrict the ability of John Hancock Life Insurance Company to pay
dividends to us; (4) we face increasing competition in our retail and
institutional businesses from mutual fund companies, banks and investment
management firms as well as from other insurance companies; (5) a decline or
increased volatility in the securities markets, and other economic factors, may
adversely affect our business, particularly our variable life insurance, mutual
fund, variable annuity and investment business; (6) our life insurance sales are
highly dependent on a third party distribution relationship; (7) customers may
not be responsive to new or existing products or distribution channels, (8)
interest rate volatility may adversely affect our profitability; (9) our net
income and revenues will suffer if customers surrender annuities and variable
and universal life insurance policies or redeem shares of our open-end mutual
funds; (10) the independent directors of our variable series trusts and of our
mutual funds could reduce the compensation paid to us or could terminate our
contracts to manage the funds; (11) under our Plan of Reorganization, we were
required to establish the closed block, a special arrangement for the benefit of
a group of our policyholders, and we may have to fund deficiencies in our closed
block, and any overfunding of the closed block will benefit only the holders of
policies included in the closed block, not our stockholders; (12) there are a
number of provisions in our Plan of Reorganization, our Restated Certificate of
Incorporation and by-laws, laws applicable to us, agreements that we have
entered into with our senior management, and our stockholder rights plan, that
will prevent or discourage takeovers and business combinations that our
stockholders might otherwise consider to be in their best interests; (13) we
will face losses if the claims on our insurance products, or reductions in rates
of mortality on our annuity products, are greater than we projected; (14) we
face risks relating to our investment portfolio; (15) the market price of our
common stock may decline if persons who received common stock as compensation in
the reorganization sell their stock in the public market; (16) we may experience
volatility in net income due to changes in standards for accounting for
derivatives and other changes; (17) our United States insurance companies are
subject to risk-based capital requirements and possible guaranty fund
assessments; (18) the National Association of Insurance Commissioners'
codification of statutory accounting practices will adversely affect the
statutory surplus of John Hancock Life Insurance Company; (19) we may be unable
to retain personnel who are key to our business; (20) we face risks from assumed
reinsurance business in respect of personal accident insurance and the
occupational accident component of workers compensation insurance; (21)
litigation and regulatory proceedings may result in financial losses, harm our
reputation and divert management resources, and (22) we face unforeseen
liabilities arising from our acquisitions and dispositions of businesses.

      Readers are also directed to other risks and uncertainties discussed, as
well as to further discussion of the risks described above, in other documents
filed by the Company with the United States Securities and Exchange Commission.
The Company specifically disclaims any obligation to update or revise any
forward-looking information, whether as a result of new information, future
developments, or otherwise.


                                       3
<PAGE>

PART I

ITEM 1. Business of John Hancock Financial Services, Inc.

      John Hancock Financial Services, Inc. (JHFS or the Company) is one of the
nation's leading financial services companies, providing a broad array of
insurance and investment products and services to retail and institutional
customers, primarily in North America. Our principal executive offices are
located at John Hancock Place, Boston, Massachusetts 02117.

      The Board of Directors of John Hancock Mutual Life Insurance Company,
founded in 1862, unanimously adopted a Plan of Reorganization effective February
1, 2000 and John Hancock Mutual Life Insurance Company converted from a mutual
life insurance company to a stock life insurance company, John Hancock Life
Insurance Company (the Life Company), and became a wholly-owned subsidiary of
John Hancock Financial Services, Inc., a holding company. Also on February 1,
2000, John Hancock Financial Services, Inc. completed an initial public offering
of 102,000,000 shares of its common stock, par value $0.01 per share.

      We operate our business in five segments. Two segments primarily serve
retail customers, and two segments serve institutional customers. Our fifth
segment is the Corporate and Other Segment.

      Our retail segments are the Protection Segment and the Asset Gathering
Segment. The Protection Segment offers variable life, universal life, whole
life, term life, and individual and group long-term care insurance products. The
Asset Gathering Segment offers variable and fixed, deferred and immediate
annuities, and mutual funds. Our retail business also includes our retail
distribution and customer service operations.

      According to the latest publicly available data, with respect to the
United States, the Company is the twelfth largest writer of individual life
insurance based on new and recurring individual life sales and the eighth
largest writer of individual variable universal life insurance. We believe we
are the fourth largest writer of individual long-term care insurance and the top
provider of group long-term care insurance based on total premiums in force. As
of September 30, 2000, we were the 26th largest writer of individual annuity
contracts, based on LIMRA sales data. Our mutual fund subsidiary ranked 29th
among U.S. asset managers in terms of total long-term, open-end assets under
management as of December 31, 2000.

      Our institutional segments are the Guaranteed and Structured Financial
Products Segment and the Investment Management Segment. The Guaranteed and
Structured Financial Products Segment offers a wide variety of spread-based and
fee-based investment products and services, most provide the customer with some
form of guaranteed return. The Investment Management Segment consists of
investment management services and products marketed to institutions. This
business is primarily fee-based and investment management products generally do
not offer guarantees.

      As of December 31, 2000, our total assets under management was $125.2
billion, which includes $31.7 billion of assets invested in the Company's retail
mutual funds, and total stockholders' equity, excluding net unrealized capital
gains on securities, was $5.6 billion as of December 31, 2000. In addition, John
Hancock generated $7.6 billion in revenues and $838.9 million in net income in
2000. The Company's return on stockholders' equity, excluding net unrealized
capital gains on securities was 14.57% at December 31, 2000.


                                       4
<PAGE>

Protection Segment

Overview

      Through our Protection Segment, we offer a variety of non-traditional and
traditional life insurance products and individual and group long-term care
insurance products. Our non-traditional life insurance products include variable
life and universal life insurance. Our traditional life insurance products
include whole life insurance and term life insurance.

      The Protection Segment has traditionally been our largest business
segment, contributing 35.6%, 37.9% and 40.9% of consolidated operating revenues
and 34.8%, 31.1% and 34.4% of consolidated segment after-tax operating income in
the years ended December 31, 2000, 1999 and 1998, respectively. The Protection
Segment generated revenues of $3,148.1, $2,903.0 and $2,759.2 million and
after-tax operating income of $262.0, $190.6 and $172.3 million in 2000, 1999,
and 1998 respectively. The Protection Segment has achieved the following
financial results for the periods indicated:

<TABLE>
<CAPTION>
                                                    As of or for the Year Ended December 31,
                                                    ----------------------------------------
                                                         2000       1999        1998
                                                      ---------  ---------   ---------
                                                               (in millions)
<S>                                                   <C>        <C>         <C>
Sales (new premiums and deposits):
Non-traditional life--excluding COLI and BOLI (1)
     Variable life .................................  $   152.5  $   130.6   $   103.9
     Universal life ................................       18.4       16.4        20.3
Traditional life--excluding COLI (1)
     Whole life ....................................        8.4       18.9        18.8
     Term life .....................................       36.3       24.0        22.9
COLI and BOLI
     Variable life--COLI ...........................       38.6       23.6        53.5
     Universal life--COLI ..........................       14.8        3.3        23.5
     Whole life--COLI ..............................         --         --         1.2
     Universal life--BOLI ..........................        0.8         --        12.4
Individual long-term care (2) ......................       73.9       70.9        56.8
Group long-term care (3) ...........................        6.1        6.3         3.8
                                                      ---------  ---------   ---------
          Total ....................................  $   349.8  $   294.0   $   317.1
                                                      =========  =========   =========

Assets:
Non-traditional life ...............................  $10,433.5  $10,195.5   $ 8,713.2
Traditional life ...................................   13,861.7   13,716.7    16,412.4
Individual long-term care ..........................    1,923.7    1,008.5       754.8
Group long-term care ...............................      480.6      466.0       400.2
Other ..............................................       46.9       36.5        23.2
Intra-segment eliminations .........................         --      (44.8)     (600.1)
                                                      ---------  ---------   ---------
          Total ....................................  $26,746.4  $25,378.4   $25,703.7
                                                      =========  =========   =========
</TABLE>

(1)   Individual life insurance sales exclude (a) excess premiums, which are
      premiums that build cash value but do not purchase face amounts of
      insurance on variable life and universal life insurance products and (b)
      premiums on corporate owned life insurance (COLI) and bank owned life
      insurance (BOLI) policies covering more than 200 lives. Sales include 10%
      of single premium payments on universal and whole life insurance products.

(2)   Individual long-term care sales include only John Hancock reported LIMRA
      sales for all period presented.

(3)   Group long-term care sales include only sales made to new employer groups
      initially effective in the year. Re-enrollments on existing accounts,
      sales constituting increased coverage to existing insureds, sales to
      non-employer groups and sales to new employees added to a group are
      excluded.


                                       5
<PAGE>

Products and Markets

      The trend in the individual life industry has shifted towards variable
life insurance products and away from traditional whole life products. This is
reflected in our life insurance sales growth, which has come principally from
sales of variable, universal and term life insurance, while sales of traditional
whole life insurance have declined. By diversifying from traditional whole life
insurance products to term life insurance products and investment-oriented
savings products demanded by today's consumer, we have generated strong business
and earnings growth. The Company's new sales of individual life insurance
(excluding COLI and BOLI) in 2000 were 71% variable life, 9% universal life and
20% was traditional life. Term life sales represented 81% of traditional life
product sales for the year ended December 31, 2000.

      Individual Life Insurance. We believe there are two distinct groups of
consumers for our individual life insurance products: relationship-oriented
consumers; those with complex buying needs willing to pay a premium for
professional advisors, and self-directed consumers; those with simpler product
needs who are price sensitive and will initiate their own insurance as needs
arise. We market our variable, universal and whole life insurance products to
relationship-oriented consumers. We market our term life insurance products to
relationship-oriented consumers, as well as to self-directed consumers through
direct distribution in e-commerce.

o     Variable Life Insurance. Our primary variable life insurance product is
      variable universal life insurance. This product provides life insurance
      coverage and an investment return linked to an underlying portfolio of
      investments chosen by the policyholder. Our variable life insurance
      product portfolio includes joint (second-to-die) and corporate owned life
      insurance products, as well as single life policies. Second-to-die
      products are typically used for estate planning purposes and insure two
      lives rather than one, with the policy proceeds paid after the death of
      both insured individuals. Corporate owned life insurance products are sold
      to corporations to fund special deferred compensation plans and benefit
      programs for key employees. We were among the first insurance companies to
      offer variable life insurance products, beginning in 1980, and we believe
      the length of our experience in this market is a competitive strength. In
      2000, we introduced an innovative new product called Unison, which is a
      variable life insurance policy with a long-term care rider.

o     Universal Life Insurance. Our universal life insurance products provide
      life insurance coverage and cash value that increases based on a credited
      interest rate which is periodically reset. These policies generally permit
      policyholders to use any increase in cash value to vary the amount of
      insurance coverage and the timing and amount of premium payments. Our
      universal life insurance product portfolio also includes corporate owned
      life insurance and bank owned life insurance products which are sold to
      banks to fund post-retirement employee benefit plan liabilities. We
      participate in the bank owned life insurance market selectively, as
      special sales opportunities arise.

o     Traditional Life Insurance Products. Our traditional life insurance
      products include single life and joint life (second-to-die) whole life
      insurance, and term life insurance. Participating whole life insurance
      combines a death benefit with a cash value that generally increases
      gradually in amount over a period of years, and typically pays a policy
      dividend. Term life insurance provides only a death benefit, does not
      build up cash value, and does not pay a dividend.

      Long-Term Care Insurance. We entered the individual long-term care
insurance (LTC) market in 1987 and the group long-term care insurance market in
1988. Our long-term care insurance products provide protection against the large
and escalating costs of home health care, assisted living, and nursing home
care. With the aging population, the expected inability of government
entitlement programs to meet retirement needs, and a growing public awareness of
long-term care insurance, we believe there is excellent growth potential for the
long-term care insurance market. Our long-term care insurance products are
reimbursement products, which provide benefits only for documented nursing home
or health care expenses. These products are sold on a guaranteed renewable
basis, meaning that we are required to renew the policies each year as long as
the premium is paid. However, this also gives us the ability to reset the price
of the product prospectively, if needed. Our claims history on these products
has been favorable relative to our pricing assumptions.


                                       6
<PAGE>

      On March 1, 2000, we completed the acquisition of the individual long-term
care insurance business of Fortis, Inc. This acquisition increased by about 50%
(as measured by total premiums and number of policies in force) the total size
of our individual long-term care insurance business, boosting our market share
to 12% from 8%.

o     Individual Long-Term Care Insurance. Our individual long-term care
      insurance products are sold to pre-retirement and retired customers. The
      insured pays the premium for this product. In 2000, we launched
      SimpleCare, a streamlined LTC insurance product with a simplified
      application and approval process sold through the bank channel and through
      Internet partnerships.

o     Group Long-Term Care Insurance. Our group long-term care insurance
      products are sold through employer-sponsored plans to employees and
      retirees, and their eligible relatives. The insured, not the employer,
      generally pays the premium for this insurance. Following selection of one
      of our plans by an employer, we market our products directly to the
      employee base. The principal market for our group long-term care insurance
      products is companies with over 7,500 employees and retirees. We also
      pursue smaller employers with 500 or more employees and retirees in
      selected industries.

The following table demonstrates total statutory premiums and deposits, which is
the premium we report on the annual statements we file with insurance
regulators, life insurance in force and GAAP reserves for our individual life
insurance and long-term care products. In addition to premium from sales of new
policies and long-term care insurance products, which we refer to as "sales,"
statutory premiums and deposits includes revenues from renewals of policies, 10%
of single premium payments, and premiums from reinsurance assumed by us. We
deduct from this measure the premiums that we cede to our reinsurers. Statutory
premiums and deposits differ from GAAP premiums because GAAP requires that
premiums on variable and universal life insurance products be accounted for
using deposit accounting. Deposit accounting excludes the premiums received on
these products and generally shows the fees earned from the products as
revenues.

                             Selected Financial Data
                  Individual Life and Long-Term Care Insurance

                                        As of or for the Year Ended December 31,
                                             2000        1999        1998
                                           ----------  ----------  ----------
                                                    (in millions)
Total statutory premiums and deposits:
Variable life ..........................  $    922.0  $    829.8  $    810.8
Universal life (1) .....................       173.5       117.9       436.8
Traditional life .......................       965.5     1,043.6     1,051.3
Individual long-term care ..............       455.3       276.6       218.5
Group long-term care ...................        89.8        78.4        72.7
                                          ----------  ----------  ----------
     Total .............................  $  2,606.1  $  2,346.3  $  2,590.1
                                          ==========  ==========  ==========
Life insurance in force:
Variable life ..........................  $ 57,716.2  $ 56,691.1  $ 52,552.9
Universal life .........................     9,085.6     8,967.2     8,511.0
Traditional life .......................    66,989.3    57,284.8    52,122.6
                                          ----------  ----------  ----------
     Total .............................  $133,791.1  $122,943.1  $113,186.5
                                          ==========  ==========  ==========
GAAP Reserves:
Variable life ..........................  $  6,517.1  $  6,560.0  $  5,407.5
Universal life .........................     2,268.7     2,065.7     1,930.3
Traditional life .......................    10,030.6     9,786.3     9,386.0
Individual long-term care ..............     1,317.3       658.0       473.4
Group long-term care ...................       403.4       334.3       275.2
                                          ----------  ----------  ----------
     Total .............................  $ 20,537.1  $ 19,404.3  $ 17,472.4
                                          ==========  ==========  ==========

(1)   Includes bank owned life insurance premiums of $52.5 million and $340.0
      million for the years ended December 31, 2000, and 1998. There were no
      bank owned life insurance premiums for the year ended December 31, 1999.


                                       7
<PAGE>

Distribution

      Protection products are distributed through multiple distribution
channels, including our career agency system, which we integrated into our
distribution subsidiary, Signator Financial Network (Signator), M Financial
Group, independent broker/dealers, a private label arrangement, banks and
directly to consumers, via the Internet and over the phone. Typically we employ
separate sales efforts for each product. However, we also attempt to optimize
our distributor relationships by selling complementary products where the needs
of the consumer call for them. The Protection Segment's distribution channels
include the following:

      Signator. Signator, created in 1999, is a separate distribution
subsidiary. Signator provides highly tailored financial planning tools and
market support and enables our agents to sell products of competing insurance
companies. This subsidiary is structured to enable us to recruit, develop and
retain top producers. Within Signator we include both our Signator General
Agency (GA) and Signator Brokerage channels. Signator Brokerage includes GA
Brokerage and Direct Brokerage. We have seen growth in sales from the brokerage
channel as more agencies are developing dedicated brokerage structures as part
of their overall business model and our expansion into the direct brokerage
channel. The Signator General Agency system includes approximately 2,400 sales
personnel. We believe that over time Signator will enable us to continue growing
revenues, while reducing unit expenses.

      M Financial Group. M Financial Group is a national producer group founded
in 1978 comprised of approximately 105 life insurance producing firms with
approximately 425 individual producers operating exclusively in the upper end of
the wealth transfer and executive benefit markets. We believe John Hancock has
been either the first or second largest provider of life insurance products to
the M Financial Group in each of the past three years, although the member firms
also sell the products of other prominent U.S. life insurance companies. For the
year 2000 we believe we were the largest provider.

      We have jointly developed a proprietary life insurance product line with M
Financial Group to meet the distinct requirements of its producers. We also
offer four proprietary investment options of M Fund, Inc. on all variable life
insurance products sold by M Financial Group members, in addition to the
investment options supported by the variable series trust (VST). Near the end of
2000 we were the first provider to roll out Magnastar, M Group's proprietary
private placement life insurance product, co-manufactured by M Life and John
Hancock Life Insurance Company and John Hancock Variable Life Insurance Company.

      In addition to these proprietary products, we provide a number of
exclusive services to M Financial Group members, including a deferred
compensation plan, dedicated sales, underwriting and services teams and
participation in special marketing events, as well as M Financial Group
sponsored systems and technology initiatives. In addition, M Life Insurance
Company shares the insurance risk, through reinsurance, on 50% of most of our
policies that its members sell. These products and services and this reinsurance
arrangement serve to align M Financial Group producers' incentives with ours.

      During 2000, John Hancock was the only provider to extend debt financing
for M Financial Holdings, Inc.'s purchase of one of its own COLI firms, to
assist it in the first step of its long-term aggregation process.

      The business generated by M Financial Group producers has experienced
lower termination or non-renewal (referred to in the industry as "lapse") and
mortality rates than the industry average.

      Independent Broker/Dealers. We have selling agreements for individual
long-term care insurance products with over 45 independent broker/dealer
organizations. In addition, our sales through Signator include some life
insurance sold by broker/dealers. In 2001, we will be rolling out our Express
Ticket process which is an innovative approach to selling long-term care
insurance in the broker/dealer community. With Express Ticket the broker
completes a simple "one page" order form with the client, John Hancock then
handles all follow-on processing. This process frees up the broker's time and
removes them from the position of obtaining in-depth personal, financial and
medical information from the client.

      Direct distribution. We have developed a direct distribution unit,
operating under the "MarketPlace by John


                                       8
<PAGE>

Hancock" brand, to complement our traditional sales efforts. Through this unit,
we sell our products over the telephone, through direct mail and over the
Internet directly to consumers. Consumers can call a toll-free number or go
directly to our web site to get information, obtain a quote or start an
application. We have built a call center and developed a streamlined
application, payment and issue process to support this distribution channel.

      Our e-commerce initiatives include the John Hancock Internet web site, and
partnerships with several on-line partners and key aggregators. We offer term
life insurance and long-term care products through the e-commerce channel, which
allows consumers to begin an insurance application process directly on-line. We
have announced our intent to introduce e-variable life, e-annuity and long-term
care products for distribution in the near future.

      Banks. We offer a full line of life and individual long-term care
insurance products through banks that have established an insurance sales force.
Sales of insurance products in this channel build on our well developed sales of
fixed and variable annuity and mutual fund product sales in the bank channel.

      Group sales force. Group long-term care insurance products are marketed by
a dedicated sales force located in major cities around the country. The sales
force works closely with consultants, brokers, and other intermediaries to
generate sales and grow existing accounts.

      Private label arrangements. In 1999, we launched an individual long-term
care product which is being sold through another insurer under a private label
arrangement. We continue to explore private label arrangements with respect to
various other products.

      Signator, the M Financial Group, our independent broker/dealer channel and
the bank channel are aimed at relationship-oriented consumers. The direct
distribution channel targets self-directed consumers.


                                       9
<PAGE>

The table below shows Protection Segment sales by distribution channel for the
periods indicated. Individual life insurance sales exclude excess premiums,
which are premiums that build cash value but do not purchase any additional face
amount of insurance, on variable life and universal life insurance products and
premiums on corporate owned life insurance and bank owned life insurance
policies covering more than 200 lives. Sales include 10% of single premium
payments on universal life and whole life insurance policies. Group long-term
care sales include only sales made to new employer groups initially effective in
the year. Re-enrollments on existing accounts, sales constituting increased
coverage to existing insureds, and sales to non-employer groups and new
employees added to a group are excluded. COLI is sold only by Signator and M
Financial Group. BOLI is sold only by Signator.

                Protection Segment Sales by Distribution Channel

                                                 For the Year Ended December 31,
                                                 -------------------------------
                                                      2000     1999     1998
                                                      ----     ----     ----
                                                          (in millions)
Signator: (1)
     Individual life--excluding COLI and BOLI ....   $129.0   $122.9   $111.4
     Individual life--COLI .......................     23.7      8.5      9.1
     Individual life--BOLI .......................      0.8       --     12.4
     Individual long-term care ...................     64.9     63.3     50.7
M Financial Group:
     Individual life--excluding COLI .............     59.9     55.8     48.7
     Individual life--COLI .......................     29.7     18.4     69.1
     Individual long-term care ...................      0.2      0.1      0.1
Independent Broker/Dealers:
     Individual life .............................      3.7      0.5       --
     Individual long-term care ...................      7.3      6.6      5.7
Direct Distribution:
     Individual life .............................     19.5      8.6      4.8
Banks:
     Individual life .............................      3.3      1.7      0.5
     Individual long-term care ...................      1.0      0.7      0.2
Dedicated Sales Force:
     Group long-term care ........................      6.1      6.3      3.8
Other:
     Individual life .............................      0.2      0.4      0.5
     Individual long-term care ...................      0.5      0.2      0.1
Total:
     Individual life--excluding COLI and BOLI ....    215.6    189.9    165.9
     Individual life--COLI and BOLI ..............     54.2     26.9     90.6
     Individual long-term care (2) ...............     73.9     70.9     56.8
     Group long-term care ........................      6.1      6.3      3.8

(1)   Sales originated through either broker/dealers or independent insurance
      brokers and reported within the Signator Channel were 55.3%, 45.9% and
      40.1% of total Signator individual life insurance sales for the years
      ended December 31, 2000, 1999 and 1998, respectively. For long-term care
      insurance for each of these three periods 29.5%, 21.0% and 16.6% of total
      Signator individual long-term care insurance sales originated through
      either broker/dealers or independent insurance brokers reported through
      the Signator Channel.

(2)   Individual long-term care sales include only LIMRA sales for all period
      presented.

Underwriting

      Insurance underwriting involves a determination of the type and amount of
risk that an insurer is willing to accept. Underwriting also determines the
amount and type of reinsurance levels appropriate for a particular type of risk.
By utilizing reinsurance, we can limit our risk and improve product pricing.


                                       10
<PAGE>

      Our underwriting standards for life insurance are intended to result in
the issuance of policies that produce mortality experience consistent with the
assumptions used in product pricing. Our underwriting is based on our historical
mortality experience, as well as the experience of the insurance industry and of
the general population. We continually compare our underwriting standards
against the industry to mitigate our exposure to higher risk business and to
stay abreast of industry trends. For individual long-term care products, we use
separate but similar underwriting criteria appropriate to the morbidity risks
insured. Our overall profitability depends to a large extent on the degree to
which our mortality and/or morbidity experience matches our pricing assumptions.
Our life and long-term care insurance underwriters evaluate policy applications
on the basis of the information provided by the applicant and others. We have
implemented new programs to improve our underwriting process. These include the
Telephone Interview Program, implemented in 1999, which permits eligible
long-term care clients to be interviewed over the telephone by trained nurses,
replacing the collection of a physician's statement in 50% of the cases, leading
to lower costs and faster cycle times, without any loss of required underwriting
information. We have also implemented the STAR (System to Assess Risk)
underwriting system in 2000 to improve the risk assessment process through
automation which has resulted in a reduction of cycle times, improved
productivity and a reduction of total costs. We are hard at work on the next
phase of our underwriting automation projects including on-line conditional
approval and reflexive questioning through our tele-application unit to better
set client expectations regarding underwriting classification. These initiatives
are expected to further reduce our unit costs by eliminating the use of
unnecessary underwriting tools and increasing policy taken rates.

      Group long-term care underwriting is conducted on both the employer group
level and the individual level. Our group long-term care corporate customers
generally offer their employees the opportunity to purchase coverage on a
"guaranteed-issue" basis, meaning that all employees are eligible for insurance
coverage, and offer individually underwritten coverage to family members. We
rely on our experience in underwriting large groups in order to set prices that
take into account the underwriting arrangements, the general health conditions
of the corporate customers' employees, the specifics of the negotiated plan
design, and other demographic and morbidity trends. Group products are written
on a guaranteed renewable basis, which permits repricing if necessary.

      Our corporate owned and bank owned life insurance policies covering
multiple lives are issued on a guaranteed issue basis, where the amount of
insurance issued per life on a guaranteed basis is related to the total number
of lives being covered and the particular need for which the product is being
purchased. Guaranteed issue underwriting applies to employees actively at work,
and product pricing reflects the additional guaranteed issue underwriting risk.

Reserves

      We establish and report liabilities for future policy benefits on our
balance sheet to meet the obligations under our insurance policies and
contracts. Our liability for variable life insurance and universal life
insurance policies and contracts is equal to the cumulative account balances.
Cumulative account balances include deposits plus credited interest less expense
and mortality fees and withdrawals. Future policy benefits for our traditional
life, individual long-term care and group long-term care insurance policies are
calculated based on a set of actuarial assumptions that we establish and
maintain throughout the lives of the policies. Our assumptions include
investment yields, mortality, morbidity and expenses.

Competition

      We face significant competition in all our retail protection businesses.
Our competitors include other large and highly rated insurance carriers as well
as certain banks, securities brokerage firms, investment advisors and other
financial intermediaries marketing annuities and mutual funds. Some of these
competitors have greater financial strength and resources and have penetrated
more markets. In particular, national banks may become more significant
competitors in the future for insurers who sell annuities as a result of
recently enacted legislation, the Gramm-Leach-Bliley Act, which permits
affiliations among banks, securities firms and insurance companies. For
additional information, see the Regulation section, included elsewhere in this
Form 10-K. In the e-commerce arena, we also face competition from internet
start-up companies and traditional competitors that have established internet
platforms.


                                       11
<PAGE>

We believe that we distinguish ourselves from our competitors through the
combination of:

o     our strong and reputable brand name;

o     our strong financial ratings;

o     our broad range of competitive and innovative products and our ability to
      create unique product combinations for various distribution channels;

o     the depth of our experience as one of the first companies to offer
      variable life insurance, individual long-term care insurance and group
      long-term care insurance;

o     our brand penetration within each channel of distribution;

o     our dedication to customer service.

      Competition also exists for agents and other distributors of insurance
products. Much of this competition is based on the pricing of products and the
agent or distributor compensation structure. We believe that our competitive
strengths coupled with the advantages of our Signator network will enable us to
compete successfully to attract and retain top quality agents and distributors.

Reinsurance

      We reinsure portions of the risks we assume for our protection products.
The maximum amount of individual ordinary life insurance retained by us on any
life is $10 million under an individual policy and $20 million under a
second-to-die policy. As of January 1, 2001, we have established additional
reinsurance programs, which limit our exposure to fluctuations in life claims
for individuals for whom the net amount at risk is $3 million or more. In
February 2001 the Company announced that it signed letters of intent with two
reinsurers covering 50% of its closed block business. The treaties are
structured so they will not affect policyholder dividends or any other financial
items reported within the closed block, which was established at the time of the
Company's demutualization to protect the reasonable dividend expectations of
certain participating life insurance policyholders.

By entering into reinsurance agreements with a diverse group of highly rated
reinsurers, we seek to control our exposure to losses. Our reinsurance, however,
does not discharge our legal obligations to pay policy claims on the policies
reinsured. As a result, we enter into reinsurance agreements only with highly
rated reinsurers. Nevertheless, there can be no assurance that all our
reinsurers will pay the claims we make against them. Failure of a reinsurer to
pay a claim could adversely affect our business, financial condition or results
of operations.

      For a further description of operating results, see Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Protection Segment, included elsewhere in this Form 10-K.


                                       12
<PAGE>

Asset Gathering Segment

Overview

      Through our Asset Gathering Segment, we offer individual annuities, mutual
fund products and investment management services. Individual annuities include
variable and fixed annuities, both immediate and deferred. Mutual fund products
primarily consist of open-end mutual funds and closed-end funds. Our investment
management services include retirement services, offered principally to 401(k)
plans, and the management of institutional pools of capital. In this segment, we
also include the results of Signator, John Hancock Signature Services, our
servicing subsidiary, First Signature Bank & Trust Company, our limited-service
banking subsidiary, and Essex Corporation, one of the nation's largest
intermediaries between banks and product manufacturers for annuities.

      The Asset Gathering Segment contributed 13.5%, 13.8% and 15.0% of
consolidated operating revenues and 17.1%, 18.8% and 22.2% of consolidated
after-tax operating income in the years ended December 31, 2000, 1999 and 1998,
respectively. The Asset Gathering Segment generated revenues of $1,195.9,
$1,057.3 and $1,015.3 million and after-tax operating income of $128.8, $115.1
and $111.1 million in 2000, 1999 and 1998, respectively. The Asset Gathering
Segment has achieved the following financial results for the periods indicated:

                                        As of or for the Year Ended December 31,
                                               2000        1999        1998
                                            ---------   ---------   ---------
                                                      (in millions)
Sales:
Variable annuities (1) ..................   $ 1,145.8   $   847.7   $   882.7
Fixed annuities (1) .....................       880.4       648.6       377.8
John Hancock Funds (2) ..................     5,307.0     3,899.6     6,797.7
                                            ---------   ---------   ---------
     Total ..............................   $ 7,333.2   $ 5,395.9   $ 8,058.2
                                            =========   =========   =========

Assets:
Variable annuities ......................   $ 7,425.3   $ 7,877.6   $ 6,820.5
Fixed annuities .........................     5,988.4     5,693.0     5,140.4
John Hancock Funds ......................       410.5       442.9       502.1
Other ...................................       243.0       283.7       252.7
                                            ---------   ---------   ---------
     Total ..............................   $14,067.2   $14,297.2   $12,715.7
                                            =========   =========   =========

Assets Under Management:
Variable annuities ......................   $ 7,116.0   $ 7,598.1   $ 6,569.6
Fixed annuities .........................     5,640.8     5,255.0     4,867.4
John Hancock Funds (3) ..................    31,725.8    32,696.6    34,945.2

(1)   Represents statutory annual statement values. Statutory revenues include
      premiums and deposits on variable and fixed annuities. Statutory premiums
      and deposits differ from GAAP premiums because GAAP requires that variable
      and certain fixed annuity products be accounted for using deposit
      accounting. Deposit accounting excludes from revenue the premiums and
      deposits received on these products.

(2)   Mutual fund and institutional asset sales are defined as new inflows of
      funds from investors into our investment products. Sales of mutual fund
      products are recorded on the trade date. Sales of institutional investment
      products are recorded on the date a firm commitment is established. Sales
      of retail money market products are not included in 1999 or 1998. If this
      methodology had been used in prior periods, sales for John Hancock Funds
      would have been $3,728.5 million and $6,592.9 million for the years ended
      December 31, 1999 and 1998, respectively.


                                       13
<PAGE>

(3)   Includes $2.9 billion, $2.3 billion and $2.6 billion of our general
      account assets and assets managed for certain John Hancock subsidiaries
      and assets managed for variable annuities as of December 31, 2000, 1999
      and 1998, respectively.

Products and Markets

Annuities

      We offer variable and fixed annuities, immediate and deferred, to a broad
range of consumers through multiple distribution channels. Annuities may be
deferred, where assets accumulate until the contract is surrendered, the
contractholder dies, or the contractholder begins receiving benefits under an
annuity payout option; or immediate, where payments begin within one year of
issue and continue for a fixed period of time or for life with or without a
period certain.

      Variable annuities are separate account products, where the contractholder
bears the investment risk and has the right to allocate their funds among
various separate investment subaccounts. Our major source of revenues from
variable annuities is mortality and expense fees charged to the contractholder,
generally determined as a percentage of the market value of the underlying
assets under management. We introduced a new variable annuity product line, the
Revolution series, in 1999, and became the first in the industry to offer
assistance with the cost of long-term care, with no underwriting. Revolution is
targeted to the needs of aging consumers who want to accumulate funds for
retirement and provide a hedge against the cost of long-term care. Revolution
sales comprise 73% of total variable annuity sales for 2000.

      Fixed annuities are general account products, where we bear the investment
risk as funds are invested in our general account and a stated interest rate is
credited to the contractholders' accounts. Our major source of income from fixed
annuities is the spread between the investment income earned on the underlying
general account assets and the interest credited to contractholders' accounts.

      Investment management skills are critical to the growth and profitability
of our annuity business. In addition to variable annuity products that offer the
same fund choices as our variable life insurance products, we also offer
variable annuities that offer funds managed by our subsidiaries. Our variable
annuity assets are managed by John Hancock Funds, our mutual fund subsidiary,
and by Independence Investment Associates, Inc., our internal institutional
equity manager. All our fixed annuity assets are managed internally.

      The relative proportion of our total annuity sales represented by fixed
and variable annuities is generally driven by the relative performance of the
equity and fixed income markets. John Hancock's total annuity deposits were
comprised of 43% fixed annuity and 57% variable annuity for the years ended
December 31, 2000 and 1999.


                                       14
<PAGE>

The following table presents certain information regarding our annuity reserve
activity for the periods indicated:

                            Annuity Reserve Activity

<TABLE>
<CAPTION>
                                                       As of or for the Year Ended December 31,
                                                             2000        1999        1998
                                                          ---------   ---------   ---------
                                                                    (in millions)
<S>                                                       <C>         <C>         <C>
Variable Annuities:
Reserves, beginning of year ............................  $ 7,683.2   $ 6,660.4   $ 5,245.0
     Deposits and other policy credits (1) .............    1,162.3       847.7       882.7
     Interest credited and investment performance ......     (538.3)      942.1     1,090.9
     Surrenders and benefits ...........................     (997.6)     (655.1)     (467.4)
     Product charges ...................................     (126.8)     (111.9)      (90.8)
                                                          ---------   ---------   ---------
Reserves, end of year ..................................  $ 7,182.8   $ 7,683.2   $ 6,660.4
                                                          =========   =========   =========
Fixed Annuities:
Reserves, beginning of year ............................  $ 4,946.4   $ 4,591.3   $ 4,501.8
     Premiums, deposits and other policy credits (1)  ..      899.1       648.6       360.6
     Interest credited .................................      291.0       262.3       245.0
     Surrenders and benefits ...........................     (759.2)     (547.2)     (507.1)
     Product charges ...................................      (11.5)       (8.6)       (9.0)
                                                          ---------   ---------   ---------
Reserves, end of year ..................................  $ 5,365.8   $ 4,946.4   $ 4,591.3
                                                          =========   =========   =========
Total Annuities:
Reserves, beginning of year ............................  $12,629.6   $11,251.7   $ 9,746.8
     Premiums, deposits and other policy credits (1)  ..    2,061.4     1,496.3     1,243.3
     Interest credited and investment performance ......     (247.3)    1,204.4     1,335.9
     Surrenders and benefits ...........................   (1,756.8)   (1,202.3)     (974.5)
     Product charges ...................................     (138.3)     (120.5)      (99.8)
                                                          ---------   ---------   ---------
Reserves, end of year ..................................  $12,548.6   $12,629.6   $11,251.7
                                                          =========   =========   =========
</TABLE>

(1)   Included in this line for the year ended December 31, 2000 are policy
      credits of $18.7 million for fixed annuity and $16.5 million for variable
      annuity which were added to annuity reserves as part of the
      demutualization.

John Hancock Funds

      We offer a variety of mutual fund products and related investment
management services through John Hancock Funds. We employ a team style in the
management of our funds. These teams manage portfolios in accordance with a
variety of specified strategies, which we believe gives us a competitive
advantage over competitors, many of whom deploy only one style across a family
of funds. As of December 31, 2000, our fixed income and equity research staffs
included over 67 portfolio managers and analysts with an average of 16 years of
experience. We are recruiting additional investment professionals to enhance our
capabilities across both fundamental and quantitative analysis and investment
styles. This ongoing commitment to investment research further enables us to
develop new products intended to strengthen our fund offerings, across a broad
array of investment styles.

o     Mutual Funds. John Hancock Funds offers a broad array of open-end mutual
      funds and closed-end funds to a broad base of consumers across varying
      income levels. Open-end mutual funds are subject to redemption at any time
      by investors. After their initial public offering, the shares of
      closed-end funds are not subject to redemption, and accordingly represent
      a more stable base of assets than open-end funds. As of December 31, 2000,
      72.7% of our mutual fund assets under management were invested in open-end
      mutual funds. We also offer our mutual funds as investment options in
      variable annuities and variable life insurance products. Our product
      offerings cover both domestic and international equity and fixed-income
      markets. Three new equity mutual funds were added during 2000: Growth
      Trends, Focused Relative Value and Multi-Cap Growth.

o     Retirement Services. In 2000 and prior years we offered mutual funds and
      record-keeping services to 401(k) plan sponsors, primarily small-and
      mid-size companies, on either a full-service or on an unbundled basis. In
      March 2001, we sold our full service 401(k) record-keeping business
      operated out of John


                                       15
<PAGE>

      Hancock Funds. We will continue to manage the assets of the business, the
      purchaser will assume the record-keeping and support responsibilities. The
      business includes approximately 1,300 plans and 160,000 participants.

      We also offer traditional IRA programs and a complete line of retirement
      products, including: SIMPLE IRA and SIMPLE 401(k) plans for companies with
      no more than 100 eligible employees and no other qualified plan;
      Simplified Employee Pensions for companies of any size, including
      self-employed persons, partnerships and corporations; and Roth IRA plans
      for individuals.

o     Institutional Pools of Capital. Through institutional funds and private
      accounts, John Hancock Funds manages assets for public pension plans, high
      net-worth individuals, corporate pension plans, pooled separate accounts,
      union pension plans, foundations and endowments.

The following table presents certain information regarding the assets under
management by John Hancock Funds for the periods indicated:

                               Asset Flow Summary

                                                For the Year Ended December 31,
                                                   2000       1999       1998
                                                ---------  ---------  ---------
                                                      (in millions)
Retail Mutual Funds:
Assets under management, beginning of year ..   $27,842.4  $29,248.7  $26,826.2
     Deposits and reinvestments .............     5,389.1    4,010.8    6,242.8
     Redemptions and withdrawals ............    (5,540.5)  (6,039.6)  (4,412.8)
     Market appreciation (depreciation) .....      (713.7)   1,051.4    1,044.0
     Fees ...................................      (435.9)    (428.9)    (451.5)
                                                ---------  ---------  ---------
Assets under management, end of year (1) ....   $26,541.4  $27,842.4  $29,248.7
                                                =========  =========  =========
Institutional Investment Management:
Assets under management, beginning of year ..   $ 4,854.2  $ 5,696.5  $ 4,575.8
     Deposits and reinvestments .............       677.1      494.3    2,184.4
     Redemptions and withdrawals ............      (571.2)  (1,561.1)    (907.2)
     Market appreciation (depreciation) .....       237.3      240.3     (132.4)
     Fees ...................................       (13.0)     (15.8)     (24.1)
                                                ---------  ---------  ---------
Assets under management, end of year ........   $ 5,184.4  $ 4,854.2  $ 5,696.5
                                                =========  =========  =========
Total:
Assets under management, beginning of year ..   $32,696.6  $34,945.2  $31,402.0
     Deposits and reinvestments .............     6,066.2    4,505.1    8,427.2
     Redemptions and withdrawals ............    (6,111.7)  (7,600.7)  (5,320.0)
     Market appreciation (depreciation) .....      (476.4)   1,291.7      911.6
     Fees ...................................      (448.9)    (444.7)    (475.6)
                                                ---------  ---------  ---------
Assets under management, end of year (1) ....   $31,725.8  $32,696.6  $34,945.2
                                                =========  =========  =========

(1)   Retail mutual fund assets under management includes $5.3 billion, $5.4
      billion and $5.0 billion in retirement plan assets at December 31, 2000,
      1999 and 1998, respectively.

Distribution

      Asset Gathering products are distributed through Signator, independent
broker/dealers, banks, directly to state lottery commissions and, both directly
and through pension consultants to retirement plan sponsors.

      Signator. Signator, through its broker/dealer and insurance agency
subsidiaries, is the primary distribution channel for our variable annuities. We
also sell fixed annuities, mutual funds, 401(k) programs and other retirement
programs through these entities.

      Broker/Dealers. Broker/dealers, which include regional and national
brokerage firms and financial planners, are the primary distribution channel for
our mutual funds. Broker/dealers also sell our fixed and variable annuities.


                                       16
<PAGE>

We support this distribution channel with an internal network of wholesalers.
These wholesalers meet directly with broker/dealers and financial planners and
are supported by an extensive home office sales staff.

      Pension Consultants. We market investment management services to pension
consultants nationwide who provide advisory services to plan sponsors. Marketing
efforts are supported by dedicated client relationship officers who keep clients
updated on portfolio performance information.

      Banks. Starting with sales of fixed annuities, we have expanded our
offerings through banks to include mutual funds and variable annuities. Starting
in 1998, we added additional products to our bank offerings. We believe we are
well positioned to take advantage of the growth opportunity we see for multiple
product offerings, coupled with added value marketing programs and customized
service support for banks.

      Essex Corporation. In January 1999, we purchased Essex Corporation, one of
the nation's largest intermediaries between banks and product manufacturers for
annuities. Essex Corporation also serves as an intermediary in the distribution
of mutual funds. Essex Corporation's primary source of income is commissions on
sales of these products.

      Direct Distribution. We are currently offering a variable annuity product
through the direct distribution channel where customers may call a toll-free
number and obtain an application to purchase the product. In the fourth quarter
of 2000, we also launched our e-variable annuity product, which models our term
product aggregator strategy, but in the annuity market.

The table below shows Asset Gathering Segment sales by distribution channel for
the periods indicated:

              Asset Gathering Segment Sales by Distribution Channel

<TABLE>
<CAPTION>
                                                  For the Year Ended December 31,
                                                     2000      1999      1998
                                                   --------  --------  --------
                                                           (in millions)
<S>                                                <C>       <C>       <C>
Broker/Dealers:
     Variable annuities .........................  $  334.7  $  126.5  $  155.8
     Fixed annuities (1) ........................       1.3      37.3      29.3
     Mutual funds ...............................   3,930.3   2,639.2   4,826.3
Signator:
     Variable annuities .........................     653.0     685.1     709.7
     Fixed annuities ............................      80.6      71.2      75.8
     Mutual funds ...............................     616.6     794.9     902.5
Pension Consultants:
      Mutual funds ..............................     596.6     317.8     885.9
Banks:
     Variable annuities .........................     130.0      25.7      14.2
     Fixed annuities (1) ........................     189.7      54.4     255.1
     Mutual funds ...............................     152.8     127.0     183.0
Essex (included with bank channel prior to 1999):
     Variable annuities .........................      24.7       6.9        --
     Fixed annuities ............................     552.3     422.0        --
     Mutual funds ...............................      10.7      20.7        --
Direct Distribution(2) ..........................       0.7       3.5       3.0
Other (2) .......................................      59.2      63.7      17.6
                                                   --------  --------  --------
  Total .........................................  $7,333.2  $5,395.9  $8,058.2
                                                   ========  ========  ========
</TABLE>

(1)   Sales generated by a certain financial institution of $139.0 million in
      2000 are being reclassified from broker/dealer to banks. If this
      reclassification were made to prior years, sales of $35.4 million and
      $29.3 million would have been reclassified from broker/dealer to banks in
      1999 and 1998, respectively.


                                       17
<PAGE>

(2)   Direct Distribution and Other include single premium immediate annuities,
      including lottery-related payout contracts, and supplemental contracts
      involving life contingencies.

Reserves

      We establish and report liabilities for future policy benefits on our
balance sheet to meet the obligations under our annuity contracts. Our liability
for variable annuity contracts and deferred fixed annuity contracts is equal to
the cumulative account balances. Cumulative account balances include deposits
plus credited interest or investment earnings less expense and mortality fees,
as applicable, and withdrawals. Future policy benefits on our immediate fixed
annuity contracts are calculated based on a set of actuarial assumptions that we
establish and maintain throughout the lives of the contracts.

Competition

      We face substantial competition in all aspects of our asset gathering
business. The annuity business is highly competitive. We compete with a large
number of insurance companies, investment management firms, mutual fund
companies, banks and others in the sale of annuities. We compete for mutual fund
business with hundreds of fund companies. Many of our competitors in the mutual
fund industry are larger, have been established for a longer period of time,
offer less expensive products, have deeper penetration in key distribution
channels and have more resources than us.

      Competition in the asset gathering business is based on several factors.
These include investment performance and the ability to successfully penetrate
distribution channels, to offer effective service to intermediaries and
consumers, to develop products to meet the changing needs of various consumer
segments, to charge competitive fees and to control expenses.

      We believe the Asset Gathering Segment is well positioned to increase
assets under management in the face of this competition. Our competitive
strengths include our ability to:

o     deliver strong investment performance, and enhance this performance by
      expanding the depth and breadth of fundamental research, portfolio
      management teams, and investment professionals;

o     develop new products and expand into new markets; and

o     provide excellent service to investors and distributors.

Distribution and Service Organizations

      Within the Asset Gathering Segment, we also include our distribution
company, Signator, and our servicing subsidiary, John Hancock Signature
Services.

      Signator is the holding company for Signator Investors, Inc. and several
insurance agencies. Signator Investors, Inc. representatives are able to offer
securities and financial advisory products and services including general
securities trading, wrap account products and other financial instruments to
their clients, including not only John Hancock mutual funds and variable
products, but also the products and services of other companies.

      John Hancock Signature Services combines and coordinates customer service
functions for life insurance, annuity and mutual fund customers. The services
provided by John Hancock Signature Services, Inc. include new business
processing, contract change services, claims processing, premium collection and
processing, billing, and preparation of annual or quarterly statements. Through
this subsidiary, we seek to provide an integrated and comprehensive customer
service function on a cost-effective basis. This system permits a customer to
have a single point of contact for most servicing needs.


                                       18
<PAGE>

Banking Products and Services

      First Signature Bank & Trust Company is a limited-service bank, which
accepts demand deposits but does not make commercial loans. It provides consumer
banking products and services to our customers. First Signature Bank & Trust
Company had $181.8 and $225.4 million in assets as of December 31, 2000 and
1999.

      For a further description of operating results, see Management's
Discussion and Analysis of Financial Condition and Results of Operations - Asset
Gathering Segment, included elsewhere in this Form 10-K.

Guaranteed and Structured Financial Products Segment

Overview

      Through our Guaranteed and Structured Financial Products Segment (G&SFP),
we offer a variety of specialized products and services to qualified defined
benefit and defined contribution retirement plans, and other domestic and
international institutional buyers. Our products include non-guaranteed,
partially guaranteed and fully-guaranteed general account and separate account
investment options. We distribute these products through home office and
regional sales representatives either directly to institutional buyers or
indirectly through financial intermediaries, consultants and brokers.

      The G&SFP Segment contributed 29.1%, 28.7% and 25.6% of consolidated
operating revenues and 28.2%, 33.0% and 29.1% of consolidated after-tax
operating income in the years ended December 31, 2000, 1999 and 1998,
respectively. The G&SFP Segment generated revenues of $2,574.3, $2,194.0 and
$1,731.2 million and after-tax operating income of $212.1, $202.4 and $145.7
million in 2000, 1999 and 1998, respectively. G&SFP Segment Assets are
summarized below:

                                                      As of December 31,
                                                  2000        1999       1998
                                               ---------   ---------   ---------
                                                        (in millions)
Assets:
Spread-based products ......................   $19,956.4   $17,957.7   $17,311.6
Fee-based products .........................    10,952.0    12,273.8    12,003.6
                                               ---------   ---------   ---------
Total ......................................   $30,908.4   $30,231.5   $29,315.2
                                               =========   =========   =========
Assets Under Management:
Spread-based products ......................   $19,514.6   $17,502.2   $16,808.6
Fee-based products .........................    10,846.1    11,862.8    11,738.0
                                               ---------   ---------   ---------
Total ......................................   $30,360.7   $29,365.0   $28,546.6
                                               =========   =========   =========

Products and Markets

      The G&SFP Segment offers spread-based products and fee-based products in a
variety of markets. The general account Guaranteed Investment Contract (GIC) has
been the predominant product issued in the qualified defined contribution plan
market. Single premium and separate account annuities are primarily limited to
qualified and non-qualified defined benefit plans. Funding agreements are issued
to non-qualified domestic and international institutional investors. By working
closely with our customers to develop customized investment programs, we have
built a leading market share in several important markets, including general
account GICs, funding agreements and single premium annuities.

      Spread-Based Products. Our spread-based products provide a guaranteed rate
of return to the customer. We derive earnings on these products primarily from
the difference between the investment returns on the supporting assets and the
guaranteed returns provided to customers. Our spread-based products include both
fund-type products and single premium annuities.


                                       19
<PAGE>

o     Fund-type products. Our fund-type products consist of the following:
      General account GICs. GICs are annuity contracts that pay a guaranteed
      rate of return. GICs are primarily marketed to sponsors of tax-qualified
      retirement plans such as 401(k) plans. The guaranteed rate of return on
      GICs can be a fixed rate or a floating rate based on an external market
      index.

      Funding agreements. Funding agreements are investment contracts that pay a
      guaranteed rate of return. However, funding agreements generally are
      issued to corporations, mutual funds and other institutional investors
      and, unlike GICs, are not typically used to fund retirement plans. The
      guaranteed rate of return on funding agreements can be a fixed rate or a
      floating rate based on an external market index.

o     Single premium annuities. Single premium annuities are immediate or
      deferred annuities which commence payment at a specified time, typically
      retirement. The two most common types of annuities are the straight life
      annuity, which makes payments for the life of a retired annuitant, and the
      joint and survivor annuity, which continues to make payments to a spouse
      after the death of the annuitant.

      The following table illustrates statutory premiums and deposits and assets
under management for our spread-based products. Statutory premiums and deposits
differ from GAAP premiums because GAAP requires that contributions to general
account GICs and funding agreements be accounted for using deposit accounting.
Deposit accounting excludes the contributions and deposits received and
generally shows only the fees and investment income earned from these products
as revenues.

                  Spread-Based Products Selected Financial Data

                                        As of or for the Year Ended December 31,
                                            2000         1999        1998
                                         ---------    ---------    ---------
                                                    (in millions)
Statutory Premiums and Deposits:
Fund-type products
     General account GICs ...........    $ 1,878.7    $ 2,442.2    $ 2,578.9
     Funding agreements .............      2,578.6      2,775.2      2,416.1
Single premium annuities ............        741.6        451.8        111.8
                                         ---------    ---------    ---------
     Total ..........................    $ 5,198.9    $ 5,669.2    $ 5,106.8
                                         =========    =========    =========

Assets Under Management:
Fund-type products
     General account GICs ...........    $ 8,338.8    $ 9,542.8    $10,329.2
     Funding agreements .............      6,627.1      4,267.9      3,105.7
Single premium annuities ............      4,548.7      3,691.5      3,373.7
                                         ---------    ---------    ---------
     Total ..........................    $19,514.6    $17,502.2    $16,808.6
                                         =========    =========    =========

      Fee-Based Products. Our fee-based products generally pass the investment
results of invested assets through to the contractholder with no, or minimal,
guarantees. We derive earnings on these products primarily from expense, risk
and profit charges which are generally assessed on the basis of assets under
management. Fee-based businesses provide relatively stable revenues and have
lower capital requirements than do our spread-based businesses. Our fee-based
products include:

o     Participating general account fund-type products and annuity contracts.
      These products are funding vehicles for pension plans that pass investment
      results through to the contractholder, after risk and profit charges.
      Annuity guarantees for these products are supported by asset adequacy
      requirements under which assets must be maintained at levels at least 5%
      above the annuity reserve. If the level of assets held under the contract
      falls below this threshold, we may liquidate assets equal to the annuity
      reserve and apply the assets to purchase a fully-guaranteed annuity.


                                       20
<PAGE>

o     Separate account GICs. These products pass the investment results of a
      separate account through to the contractholder and contain only minimal
      guarantees. Contractholders may select from among flexible investment
      options provided by our various investment managers. The separate account
      GIC business leverages the strong marketing relationships developed in our
      general account GIC business.

o     Participating separate account annuities. These products are funding
      vehicles for pension plans which offer customers an insured
      pension-funding program in conjunction with a broad range of investment
      options, including both equity and fixed-income investment classes. The
      risk associated with providing these annuities is mitigated by excess
      collateral maintenance requirements, which vary depending on the
      investment option selected. If the collateral falls below the maintenance
      requirements, we may liquidate assets equal to the annuity reserve and
      apply the assets to purchase a fully-guaranteed annuity.

o     Separate investment accounts. These are non-guaranteed group annuity
      contracts under which assets are held in a separate account. We typically
      use affiliated investment advisors to manage these assets. We may also use
      non-affiliated investment managers if the customer so requires. Because
      these products do not provide guarantees, most new sales of separate
      investment accounts are reported in the Investment Management Segment.
      Existing agreements, however, continue to be reported in and serviced by
      the Guaranteed and Structured Financial Products Segment because of
      customer relationships.

      The following table illustrates statutory premiums and deposits and assets
under management for our fee-based products. Statutory premiums and deposits
differ from GAAP premiums because GAAP requires that premiums on general account
participating pension products, separate account GICs, separate account
annuities and separate investment accounts be accounted for using deposit
accounting. Deposit accounting excludes the contributions and deposits received
and generally shows only the fees and investment income earned from these
products as revenues.

                   Fee-Based Products Selected Financial Data

<TABLE>
<CAPTION>
                                                         As of or for the Year Ended December 31,
                                                                2000        1999        1998
                                                             ---------   ---------   ---------
                                                                       (in millions)
<S>                                                          <C>         <C>         <C>
Statutory Premiums and Deposits:
General account participating pension
    fund-type products and annuity contracts ..............  $   467.0   $   527.9   $   566.7
Separate account GICs .....................................       50.3       615.7       459.9
Guaranteed separate account annuities .....................      (46.3)      (60.4)      (27.9)
Separate investment accounts ..............................      288.9       333.1       173.5
                                                             ---------   ---------   ---------
     Total ................................................  $   759.9   $ 1,416.3   $ 1,172.2
                                                             =========   =========   =========

Assets Under Management:
General account participating pension fund-type products
   and annuity contracts ..................................  $ 3,188.8   $ 3,357.1   $ 3,466.6
Separate account GICs .....................................    3,227.3     3,891.0     3,644.5
Guaranteed separate account annuities .....................    2,056.9     1,977.5     2,113.4
Separate investment accounts ..............................    2,373.1     2,637.2     2,513.5
                                                             ---------   ---------   ---------
     Total ................................................  $10,846.1   $11,862.8   $11,738.0
                                                             =========   =========   =========
</TABLE>


                                       21
<PAGE>

Distribution

      We distribute our guaranteed and structured financial products through a
variety of channels. General and separate account GICs are sold through our
regional representatives to plan sponsors, or to GIC managers who represent plan
sponsors. Funding agreements are sold either directly, through brokers, or
through investment banks in the form of medium-term notes. Annuities are sold
through pension consultants who represent defined benefit plan sponsors or
through brokers who receive a commission for sales of our products.

      We have an experienced sales staff that develop and maintain relationships
with target customers, consultants, and other financial intermediaries. We
believe that our consistent market presence over the past two decades has
created strong and valuable relationships with a large segment of the customer
base.

Spread-Based Products Risk Management

      Because of the significant guarantees provided as part of our spread-based
product offerings, risk management is particularly important in this line of
business. To facilitate risk management, we segregate and manage the assets
supporting our spread-based products separately from the rest of our general
account. Our risk management strategy is based on:

o     Managing interest rate exposure by closely matching the relative
      sensitivity of asset and liability values to interest rate changes, i.e.
      controlling the "duration mismatch" of assets and liabilities.

o     Using sophisticated systems and processes to project cash flows for each
      asset and each liability and to measure with precision the sensitivity of
      assets and liabilities to interest rate changes.

o     Writing contracts that typically have a predictable maturity structure and
      do not have premature surrender or redemption provisions.

o     Monitoring all contribution and withdrawal activity in each contract to
      anticipate deviations from expected cash flows.

o     Establishing working groups with representatives from our various business
      units, to facilitate interaction among investment management, sales
      management, risk management, financial management and the pricing staff.

      For additional information, see Quantitative and Qualitative Information
about Market Risk, included elsewhere in this Form 10-K.

Underwriting

      Underwriting is most significant for the following products in this
segment:

      General Account GICs. In developing pricing proposals for new contracts,
our underwriters estimate both base-line cash flows and also likely variance
from the base line due to plan participants reallocating assets from the "stable
value" option of their defined contribution plan. Our underwriters utilize
customized pricing models that generate plan-specific risk charges for each
customer's book value payment provision. If these pricing models project the
risk of losses exceeding customary thresholds, instead of rejecting the
business, our underwriters can modify the proposal by suggesting the use of risk
reduction techniques designed to shift some of the risk of redemptions back to
the plan or to a third party.

      Single Premium Annuities. We underwrite immediate annuities using recent
mortality experience and an assumption of continued improvement in annuitant
longevity. We underwrite deferred annuities by analyzing not only mortality risk
but also the expected time to retirement.


                                       22
<PAGE>

Reserves

      We establish and report liabilities for contractholders' funds and future
policy benefits to meet the obligations on our policies and contracts. Our
liability for general account GICs, funding agreements, and fee-based products
is equal to the cumulative account balances for these products. Cumulative
account balances include deposits plus credited interest or investment earnings
less expense charges and withdrawals. Future policy benefits for our single
premium annuity contracts are calculated based on a set of actuarial assumptions
that we establish and maintain throughout the lives of the contracts. Our
assumptions include investment yields, mortality and the expected time to
retirement.

Competition

      Our Guaranteed and Structured Financial Products Segment operates in a
variety of highly competitive institutional markets. Although a large number of
companies offer these products, the market is concentrated. Through the first
three quarters of 2000, seven insurers, including John Hancock, issued
approximately 60% of total GICs and funding agreements issued by U.S. insurance
companies reporting to LIMRA; and five insurers, including John Hancock, issued
more than 70% of total single premium annuities. Our competitors include a
variety of well-recognized insurance companies, domestic and foreign banks and
other institutional investment advisors, many of who are larger than we are and
have greater resources than we do.

      We believe that we are able to compete successfully in our markets as a
result of our strong financial ratings, investment management expertise,
national distribution, flexible product design and competitive pricing.
Competition in this market is restricted almost exclusively to insurance
companies with superior or excellent financial ratings. The requirement for
strong financial ratings reduces pressure on margins by limiting the number of
potential competitors and by lowering our cost of funds.

      For a further description of operating results, see Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Guaranteed and Structured Financial Products Segment, included elsewhere in this
Form 10-K.


                                       23
<PAGE>

Investment Management Segment

Overview

      Through our Investment Management Segment, we provide investment
management services to domestic and international institutions. While this
segment includes primarily assets managed for third-party institutional clients,
the investment professionals providing these services also manage assets
underlying our general account and separate account products, as well as
variable life and annuity and mutual fund products. The Investment Management
Segment attracts funds from corporate and public pension plan sponsors, banks,
insurance companies, mutual funds, and other domestic and international
institutions.

      The Investment Management Segment represented 26.5%, 31.6% and 31.9% of
our total assets under management as of December 31, 2000, 1999 and 1998, which
were $125.2, $127.3 and $124.4 billion, respectively. Investment Management
Segment assets were $3,124.5, $3,531.4 and $3,439.6 million as of December 31,
2000, 1999 and 1998, respectively. The Investment Management Segment contributed
$212.0, $189.9 and $143.9 million of consolidated operating revenues and $46.8,
$37.3 and $15.4 million of consolidated after-tax operating income in the years
ended December 31, 2000, 1999 and 1998, respectively.

Products and Markets

      The Investment Management Segment is primarily a fee-based investment
advisory business in which we do not offer guarantees to our customers. We
provide a variety of investment structures, such as investment advisory client
portfolios, individually managed and pooled separate accounts, registered
investment company funds, bond and mortgage securitizations, and mutual fund
management capabilities.

      Our investment management expertise covers a wide range of private and
publicly-traded asset classes and is based on fundamental research and
disciplined, quantitatively-based analysis and asset-liability management. Our
private fixed income, equity, commercial mortgage and alternative asset
operations have strong credit analysis capabilities and deal origination
expertise. These operations enjoy broad networks of relationships with
intermediaries giving them early access to new investment opportunities.

      The capabilities of the Investment Management Segment include:

      Public Fixed Income and Equity Investments. Through Independence
Investment Associates we provide active stock and bond management to pension
funds, endowments, and other institutions. We provide core, value, growth,
medium-cap, balanced and market neutral investment strategies. We also offer
international stock and bond management.

      In addition, we offer active, quantitative investment management services
in the high quality fixed income markets, with a special emphasis on structuring
and managing portfolios of mortgage-backed securities and Treasury securities
combined, when appropriate, with various derivative strategies.

      Private Fixed Income, Equity and Alternative Asset Class Investments. We
manage funds for external institutional clients investing in private
fixed-income and equity securities and alternative asset classes. Our strength
is in private placement corporate securities, structured and innovative
transactions and niche investment opportunities. Our completed offerings include
a mezzanine fund investing primarily in subordinated debt with equity
participation features and collateralized bond obligation funds, which have been
marketed domestically and overseas to banks, insurance companies, brokers and
other clients outside of the pension market.


                                       24
<PAGE>

      We are a leading manager of equity timberland for large tax-exempt
institutional investors, and are among the largest managers of equity farmland
investments. This segment also originates, services and securitizes commercial
mortgages. In addition, we sponsor affordable housing investments that qualify
for Federal tax credits.

      The following tables present certain information regarding the assets
under management by the Investment Management Segment for the periods indicated:

                  Total Assets Under Management By Asset Class

                                                        As of December 31,
                                                    2000       1999      1998
                                                 ---------  ---------  ---------
                                                          (in millions)
Assets Under Management: (1) (2)
Domestic equity and balanced ..................  $19,099.3  $26,940.8  $25,699.0
International equity and balanced .............    1,840.1    2,242.9    2,340.0
Domestic and international fixed income .......    8,469.3    6,879.6    7,552.1
Timber, farmland and independent power ........    3,136.0    3,983.9    3,958.5
                                                 ---------  ---------  ---------
     Total ....................................  $32,544.7  $40,047.2  $39,549.6
                                                 =========  =========  =========

                               Asset Flow Summary

<TABLE>
<CAPTION>
                                                        For the Year Ended December 31,
                                                          2000        1999        1998
                                                       ---------   ---------   ---------
                                                                 (in millions)
<S>                                                    <C>         <C>         <C>
Assets Under Management:
Assets under management, beginning of year (1) (3) ..  $40,047.2   $39,549.6   $34,295.5
Sales and reinvestments .............................    3,648.3     5,258.6     3,738.9
Redemptions and withdrawals .........................   (9,708.7)   (7,984.8)   (4,916.8)
Market (depreciation) appreciation ..................   (1,442.1)    3,223.8     6,432.0
                                                       ---------   ---------   ---------
Assets under management, end of year (1) (2) ........  $32,544.7   $40,047.2   $39,549.6
                                                       =========   =========   =========
</TABLE>

(1)   Includes $1,120.1 million, $1,060.8 million and $1,563.0 million of assets
      managed by subsidiaries for our general account for the year ended
      December 31, 2000, 1999 and 1998, respectively.

(2)   Does not include $106.9 million, $164.5 million and $88.1 million of
      general account cash and invested assets as of December 31, 2000, 1999 and
      1998, respectively.

(3)   Does not include $164.5 million, $88.1 million and $66.0 million of
      general account cash and invested assets as of January 1, 2000, 1999 and
      1998, respectively.

Distribution

      We sell our investment management products and services through multiple
distribution channels. Marketing to pension funds, endowments, foundations and
other institutional clients is conducted primarily by our experienced sales
professionals and dedicated marketing and client relationship staff. Products
are also offered through independent marketing specialists, consulting firms,
and investment banking firms.


                                       25
<PAGE>

Competition

      The institutional asset management industry is highly competitive. We
compete with other investment management firms, insurance companies, banks and
mutual fund companies, many of who are larger and have greater resources than
us. Consolidation activity over the past three years has increased the
concentration of competitors within the industry.

      We believe the key bases for competition are investment performance and
customer service. Our competitive strategy focuses on attracting assets through
superior performance. Consistent with this strategy, we continually evaluate
opportunities to develop internally, acquire, or divest investment management
units and strive to improve our investment management products and services. In
addition, we believe our leading role in non-traditional asset classes helps to
create a distinct and competitively advantageous profile in the institutional
asset management marketplace.

      For a further description of operating results, see Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Investment Management Segment, included elsewhere in this Form 10-K.


                                       26
<PAGE>

Corporate and Other Segment

Overview

      Our Corporate and Other Segment consists primarily of our international
insurance operations, corporate operations, including the holding company, John
Hancock Financial Services (JHFS), and non-core businesses that are either in
the process of winding down (i.e., are in "run-off") or have been divested. This
segment contributed approximately 19.4%, 17.1% and 16.3% of consolidated
operating revenues and 13.6%, 11.1% and 11.2% of consolidated after-tax
operating income in the years ended December 31, 2000, 1999 and 1998,
respectively. The Corporate and Other Segment generated revenues of $1,719.6,
$1,310.4 and $1,111.6 million and after-tax operating income of $102.5, $67.8
and $56.3 million in 2000, 1999 and 1998, respectively.

      The Corporate and Other Segment assets are summarized below:

                                              For the Year Ended December 31,
                                               2000         1999         1998
                                            ---------    ---------    ---------
                                                       (in millions)
Assets:
International insurance operations ......   $ 9,703.8    $ 8,810.8    $ 5,222.0
Corporate operations ....................     5,832.8      4,942.3      3,494.0
Non-core businesses .....................     1,106.3      1,212.2      1,894.8
Intra-segment eliminations ..............    (4,136.1)    (3,948.1)    (4,818.3)
                                            ---------    ---------    ---------
     Total ..............................   $12,506.8    $11,107.2    $ 5,792.5
                                            =========    =========    =========

International Insurance Operations

      Our international insurance operations include The Maritime Life Assurance
Company, (Maritime) the 8th largest Canadian life insurance company based on
total domestic assets under management at year-end 1999. Maritime distributes a
full range of individual life and health insurance products, investment products
and group life and health products through independent agencies, investment
brokerage firms, and employee benefit brokers and consultants. Our international
insurance operations also offer individual life and group insurance and pension
products through local affiliates doing business in five Southeast Asian
countries. Working with an international network of 45 insurers, we also
coordinate and reinsure group life, health, disability and pension coverage for
foreign and globally mobile employees of multinational companies in more than 50
countries and territories.

      We have formed a joint venture life insurance company in China which will
provide us an early foothold in this emerging economy with its vast population.
The joint venture company's license will initially be restricted to operations
in the city of Shanghai. All required regulatory approvals were received during
the fourth quarter of 2000, and operations commenced in January 2001.


                                       27
<PAGE>

Corporate Operations

      Corporate operations consist principally of (1) revenues and expense of
the holding company, investment and treasury activities, and assets, investment
income, interest expense and other expenses not specifically allocated to
segments or the holding company level and (2) group life insurance operations.
Our group life insurance business generated $240.6, $226.2 and $234.5 million in
premium in the years ended December 31, 2000, 1999, and 1998, respectively.

Non-Core Businesses

      We have certain non-core businesses that have been divested or put in
run-off, reflecting a strategic decision to focus on our retail and
institutional businesses. Non-core businesses consist primarily of run-off
property and casualty insurance companies that were sold in 1999, a portion of
our group life and accident and health business and related subsidiaries that
were sold in 1997, and other small subsidiaries in various stages of running-off
their operations.

      For a further description of operating results, see Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Corporate and Other Segment, included elsewhere in this Form 10-K.

General Account Investments

General Account and Separate Accounts

      Our investments include assets held in our general account and assets held
in numerous separate accounts. We manage our general account assets in
investment segments that support specific classes of product liabilities. These
investment segments permit us to implement investment policies that both support
the financial characteristics of the underlying liabilities, and also provide
returns on our invested capital. The investment segments also enable us to gauge
the performance and profitability of our various businesses.

      Separate account assets are managed in accordance with specific investment
contracts. We generally do not bear any investment risk on assets held in
separate accounts, but rather receive investment management fees based on levels
of assets under management, measured at fair value, as well as mortality fees,
policy administration fees and surrender charges. Generally, assets held in
separate accounts are not available to satisfy general account obligations.

      For a further description of our investments, see Management's Discussion
and Analysis of Financial Condition and Results of Operations - General Account
Investments, included elsewhere in this Form 10-K.

Ratings

      Insurance companies are rated by rating agencies based upon factors
relevant to policyholders. Ratings provide both industry participants and
insurance consumers meaningful information on specific insurance companies.
Ratings with respect to claims-paying ability and financial strength have become
an increasingly important factor in establishing the competitive position of
insurance companies. Higher ratings generally indicate financial stability and a
strong ability to pay claims. John Hancock Life Insurance Company is rated A++
(Superior) by A.M. Best, AAA (Highest) by Fitch IBCA, AA+ (second highest
rating) by S&P, and Aa2 (third highest rating) by Moody's.

      We believe that our strong ratings are an important factor in marketing
our products to our distributors and customers, since ratings information is
broadly disseminated and generally used throughout the industry. Our ratings
reflect each rating agency's current opinion of our financial strength,
operating performance and ability to meet our obligations to policyholders, and
are not evaluations directed toward the protection of investors. Such ratings
are neither a rating of securities nor a recommendation to buy, hold or sell any
security, including our common stock.


                                       28
<PAGE>

REGULATION

General

      Our business is subject to extensive regulation at both the state and
Federal level, including regulation under state insurance and Federal and state
securities laws.

State Insurance Regulation

      Our insurance subsidiaries are subject to supervision and regulation by
the insurance authorities in each jurisdiction in which they transact business.
Currently, we are licensed to transact business in all fifty states, the
District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, the Northern
Mariana Islands, 13 Canadian provinces and territories, and several Asian
countries including one province in the People's Republic of China, and
therefore are subject to regulation in all these jurisdictions. Most states have
laws and regulations governing such issues as: what lines of business a company
may engage in; underwriting practices, including a company's ability to request
results of applicants' genetic tests; what premium rates may be charged in
various lines of business; what products a company may sell; mandating certain
insurance benefits and policy forms; minimum rates for accumulation of cash
values and maximum rates for policy loans; licensing of insurance companies and
agents; advertising and marketing practices; statutory accounting and reporting
requirements; reserve requirements and solvency standards; admitted statutory
assets; the appropriate mix of investments; dividend payments; transactions with
affiliates; and acquisitions of control. State insurance departments
periodically review the business and operations of an insurance company by
examining its financial condition and how its agents sell its products. Our
insurance subsidiaries are also required to file various reports relating to
their financial condition, including detailed annual financial statements. This
is required in each jurisdiction where an insurance subsidiary is licensed.

      State insurance regulatory authorities and other state law enforcement
agencies and attorneys general from time to time make inquiries concerning
whether our insurance subsidiaries are in compliance with the regulations
covering their businesses. We try to respond to such inquiries in an appropriate
way and to take corrective action if warranted.

      The Arizona, New Jersey, Illinois, California and Vermont insurance
departments have ongoing market conduct examinations involving John Hancock Life
Insurance Company. The Company believes that it conducts its business in
accordance with all applicable state regulations and does not expect that the
outcome of these examinations will have a material impact on our business,
financial condition or results of operations.

      State insurance regulators and the National Association of Insurance
Commissioners are continually re-examining existing laws and regulations. Among
other things, these laws and regulations may focus on insurance company
investments and solvency issues, risk-adjusted capital guidelines,
interpretations of existing laws, the development of new laws, the
implementation of non-statutory guidelines and the circumstances under which
dividends may be paid.

Regulation Governing Potential Acquisitions of Control

      We are subject to regulation under the insurance holding company statutes
of the states in which our insurance subsidiaries are organized, principally
Massachusetts, which is the state of domicile of John Hancock Life Insurance
Company. The Massachusetts insurance law contains provisions which, in general,
provide that the acquisition or change of "control" of a domestic insurer or of
any person that controls a domestic insurer cannot be consummated without the
prior approval of the Massachusetts Commissioner of Insurance. In general, a
presumption of "control" arises from the ownership, control, possession with the
power to vote or possession of proxies with respect to, 10% or more of the
voting securities of an insurer or of a person that controls an insurer. A
person seeking to acquire control, directly or indirectly, of a Massachusetts
insurance company or of any person controlling a Massachusetts insurance company
must file an application for approval of the acquisition of control with the
Massachusetts Commissioner of Insurance and obtain the approval of the
Massachusetts Commissioner of Insurance before consummating the acquisition.


                                       29
<PAGE>

      In addition, we may in the future become subject to New York insurance law
governing the activities of insurance holding companies. Other state holding
company laws, specifically those of California and Delaware, and similar
Canadian laws, apply to us as well because we have insurance subsidiaries
organized in those jurisdictions. Accordingly, the direct or indirect
acquisition of control of John Hancock Life Insurance Company will be subject to
the prior approval of the California and Delaware Commissioners of Insurance and
the Office of the Superintendent of Financial Institutions in Canada and may
also be subject to the prior approval of the New York Superintendent of
Insurance in the event John Hancock Life Insurance Company is deemed a New York
domestic insurer under the provisions of the New York insurance holding company
law.

      In addition to the restrictions under applicable insurance holding company
statutes, each of the Plan of Reorganization governing our reorganization and
our restated certificate of incorporation prohibits:

o     any person, or persons acting in concert, from directly or indirectly
      acquiring or offering to acquire beneficial ownership of 10% or more of
      the outstanding shares of our common stock until two years after the
      effective date of the reorganization; and

o     without prior approval of our board of directors and the Massachusetts
      Commissioner of Insurance, any person, or persons acting in concert, from
      directly or indirectly acquiring or offering to acquire beneficial
      ownership of 10% or more of the outstanding shares of our common stock
      during the one year period following the two-year period described in the
      preceding paragraph.

      Under the Plan of Reorganization, the same restrictions apply to the
common stock of John Hancock Life Insurance Company.

      There is an exception to the foregoing prohibitions for acquisitions by a
person that becomes a beneficial owner of 10% or more of our common stock as a
result of our issuance of such common stock to such person as consideration in
an acquisition of another entity that was initiated by us by authority of our
board of directors. Any such acquisition initiated by us by authority of our
board of directors would require the approval of the Massachusetts Commissioner
of Insurance and the Commissioners of Insurance of California and Delaware, the
Office of the Superintendent of Financial Institutions in Canada and,
potentially, the New York Superintendent of Insurance in the event John Hancock
Life Insurance Company is deemed a New York domestic insurer under the
provisions of the New York insurance holding company law. If any person acquires
or offers to acquire 10% or more of the outstanding shares of our common stock
in violation of our Plan of Reorganization, we and the Massachusetts
Commissioner of Insurance would be entitled to injunctive relief. By virtue of
these provisions of the Plan of Reorganization and our restated certificate of
incorporation, John Hancock Financial Services, Inc. may not be subject to an
acquisition by another company during the two years following the effective date
of the reorganization and may only be subject to acquisition in the third year
following the effective date of the reorganization with the approval of our
board of directors and the Massachusetts Commissioner of Insurance.

      All the restrictions described above may deter, delay or prevent a future
acquisition of control, including transactions that could be perceived as
advantageous to our stockholders.

Regulation of Dividends and Other Payments from Insurance Subsidiaries

      John Hancock Financial Services, Inc. is a holding company and its assets
consist of the outstanding capital stock of John Hancock Life Insurance Company
and a portion of the net proceeds of our initial public offering. As an
insurance holding company, we depend primarily on dividends from John Hancock
Life Insurance Company to pay dividends to our stockholders (other than
dividends during the first year following the effective date of the
reorganization) and pay operating expenses. Any inability of John Hancock Life
Insurance Company to pay dividends to us in the future in an amount sufficient
for us to pay dividends to our stockholders and meet our cash obligations may
materially adversely affect the market price of our common stock and our
business, financial condition or results of operations.


                                       30
<PAGE>

      The Massachusetts insurance law limits how and when John Hancock Life
Insurance Company can pay dividends to us. Under the Massachusetts insurance
law, no insurer may pay any shareholder dividend from any source other than
statutory unassigned funds without the prior approval of the Massachusetts
Commission of Insurance. The Massachusetts insurance holding company act
requires that a report be given to the Massachusetts Commissioner of Insurance
no later than five days following declaration, and at least ten days' prior to
payment, of any dividend or distribution by a Massachusetts insurance company.
Further, this act provides that no extraordinary dividend may be paid without
thirty days' prior written notice to the Massachusetts Commissioner of
Insurance, and only if the Massachusetts Commissioner of Insurance has not
disapproved, or has approved, the payment within the thirty day notice period.
An extraordinary dividend is any dividend or distribution of cash or other
property whose fair market value, together with other dividends or distributions
made within the preceding twelve months, exceeds the greater of (1) 10% of an
insurance company's surplus as regards policyholders as of the preceding
December 31, and (2) a life insurance company's statutory net gain from
operations for the twelve months ending on the preceding December 31. John
Hancock Life Insurance Company, in the future, could also be viewed as being
commercially domiciled in New York and, if so, dividend payments may also be
subject to New York's insurance holding company act as well as Massachusetts
law.

Surplus and Capital Requirements

      Insurance regulators have the discretionary authority, in connection with
the ongoing licensing of our insurance subsidiaries, to limit or prohibit the
ability to issue new policies if, in the regulators' judgment, the insurer is
not maintaining a minimum amount of surplus or is in hazardous financial
condition. Limits may also be established on the ability to issue new life
insurance policies and annuity contracts above an amount based upon the face
amount and premiums of policies of a similar type issued in the prior year.

Risk-Based Capital

      The National Association of Insurance Commissioners has established
risk-based capital standards for life insurance companies as well as a model act
to apply such standards at the state level. The model act provides that life
insurance companies must submit an annual risk-based capital report to state
regulators reporting their risk-based capital based on four categories of risk:
asset risk, insurance risk, interest rate risk and business risk. The formula is
intended to be used by insurance regulators as an early warning tool to identify
possible weakly capitalized companies for purposes of initiating further
regulatory action. John Hancock Life Insurance Company exceeded the level of
risk-based capital that would require it to propose actions to correct a
deficiency by 155% as of December 31, 2000

Statutory Investment Valuation Reserves

      Life insurance companies are required to establish an asset valuation
reserve ("AVR") consisting of two components: (i) a "default component," which
provides for future credit-related losses on fixed maturity investments, and
(ii) an "equity component," which provides for losses on all types of equity
investments, including equity securities and real estate. Insurers also are
required to establish an interest maintenance reserve ("IMR") for net realized
capital gains and losses on fixed maturity securities, net of tax, related to
changes in interest rates. The IMR is required to be amortized into statutory
earnings on a basis reflecting the remaining period to maturity of the fixed
maturity securities sold. These reserves are required by state insurance
regulatory authorities to be established as a liability on a life insurer's
statutory financial statements, but do not affect our financial statements
prepared in accordance with GAAP. Although future additions to AVR will reduce
the future statutory capital and surplus of John Hancock Life Insurance Company,
we do not believe that the impact under current regulations of such reserve
requirements will materially affect the ability of John Hancock Life Insurance
Company to increase its statutory capital and surplus and pay future dividends
to John Hancock Financial Services, Inc.


                                       31
<PAGE>

IRIS Ratios

      The National Association of Insurance Commissioners has developed a set of
financial tests known as the Insurance Regulatory Information System ("IRIS")
for early identification of companies which may require special attention by
insurance regulators. Insurance companies submit data on an annual basis to the
National Association of Insurance Commissioners. This data is used to calculate
ratios covering various categories of financial data, with defined "usual
ranges" for each category. IRIS consists of 12 key financial ratios for life
insurance companies. An insurance company may fall out of the usual range with
respect to one or more ratios because of specific transactions that are in
themselves immaterial or eliminated at the consolidated level. Departure from
the usual range on four or more of the ratios may lead to inquiries from
individual states' insurance departments. During the five-year period ended
December 31, 2000, John Hancock Life Insurance Company has not been outside the
usual range for any IRIS ratio except for the net change in capital surplus
ratio for the year 2000. This ratio fell outside the usual range because of the
demutualization transaction. Specifically, under the applicable statutory
accounting rules, the Company was required to exclude the proceeds from the
stock offering from surplus while the demutualization consideration paid in cash
was deducted from surplus, thereby distorting the ratio. This adjustment is not
expected to recur in the year 2001.

Regulation of Investments

      Our insurance subsidiaries are subject to state laws and regulations that
require diversification of their investment portfolios. Some of these laws and
regulations also limit the amount of investments in specified investment
categories, such as below investment grade fixed maturity securities, equity
real estate, other equity investments and derivatives. Failure to comply with
these laws and regulations would cause investments exceeding regulatory
limitations to be treated as nonadmitted assets for purposes of measuring
statutory surplus, in some instances, requiring divestiture. State regulatory
authorities from the domiciliary states of our insurance subsidiaries have not
indicated any non-compliance with any such regulations.

Valuation of Life Insurance Policies Model Regulation

      The National Association of Insurance Commissioners has adopted a revision
to the Valuation of Life Insurance Policies Model Regulation (known as Revised
XXX). This model regulation established new minimum statutory reserve
requirements for certain individual life insurance policies written in the
future. Before the new reserve standards can become effective, individual states
must adopt the model regulation. Massachusetts has adopted the Regulation
effective January 1, 2001. John Hancock has revised its term life insurance
products with guaranteed premium periods and is in the process of revising its
universal life insurance products with no-lapse guarantees. In 2001, John
Hancock will establish increased reserves to be consistent with the new minimum
standards with respect to policies issued after the effective date of the
regulation.

Federal Insurance Initiatives and Litigation

      Although the Federal government generally does not directly regulate the
insurance business, federal initiatives often have an impact on our business.
Current and proposed measures that may significantly affect the insurance
business generally include limitations on anti-trust immunity, minimum solvency
requirements and health care reform.


                                       32
<PAGE>

      On November 12, 1999, the Gramm-Leach-Bliley Act of 1999 became law,
implementing fundamental changes in the regulation of the financial services
industry in the United States. The act permits the transformation of the already
converging banking, insurance and securities industries by permitting mergers
that combine commercial banks, insurers and securities firms under one holding
company. Under the act, national banks retain their existing ability to sell
insurance products in some circumstances. In addition, bank holding companies
that qualify and elect to be treated as "financial holding companies" may engage
in activities, and acquire companies engaged in activities, that are "financial"
in nature or "incidental" or "complementary" to such financial activities,
including acting as principal, agent or broker in selling life, property and
casualty and other forms of insurance, including annuities. A financial holding
company can own any kind of insurance company or insurance broker or agent, but
its bank subsidiary cannot own the insurance company. Under state law, the
financial holding company would need to apply to the insurance commissioner in
the insurer's state of domicile for prior approval of the acquisition of the
insurer, and the act provides that the commissioner, in considering the
application, may not discriminate against the financial holding company because
it is affiliated with a bank. Under the act, no state may prevent or interfere
with affiliations between banks and insurers, insurance agents or brokers, or
the licensing of a bank or affiliate as an insurer or agent or broker.

Tax Legislation

      Currently, under the Internal Revenue Code, holders of many life insurance
and annuity products, including both traditional and variable products, are
entitled to tax-favored treatment on these products. For example, income tax
payable by policyholders on investment earnings under traditional and variable
life insurance and annuity products which are owned by natural persons is
deferred during the product's accumulation period and is payable, if at all,
only when the insurance or annuity benefits are actually paid or to be paid.
Also, for example, interest on loans up to $50,000 secured by the cash value of
life insurance policies owned by businesses on key employees is eligible for
deduction even though investment earnings during the accumulation period are
tax-deferred.

      In the past, legislation has been proposed that would have curtailed the
tax-favored treatment of some of our life insurance and annuity products. If any
such proposals were enacted, market demand for such products would be adversely
affected. In addition, there are a number of proposals currently being
considered by Congress which would either eliminate or significantly reduce
Federal estate taxes. Many insurance products are designed and sold to help
policyholders reduce the effect of Federal estate taxation on their estates.
Thus, if any legislation that eliminates or significantly reduces Federal estate
taxation is enacted, the Company expects that such development would adversely
affect sales of our insurance and investment advisory products.

Securities Laws

      Certain of our investment advisory activities are subject to federal and
state securities laws and regulations. Our mutual funds are registered under the
Securities Act of 1933, as amended (the "Securities Act"), and the Investment
Company Act. All of our separate investment accounts that fund retail variable
annuity contracts and retail variable life insurance products issued by us,
other than those which fund private placement investment options that are exempt
from registration or support fixed rate investment options that are also exempt
from registration, are registered both under the Securities Act and the
Investment Company Act. Institutional products such as group annuity contracts,
guaranteed investment contracts and funding agreements are sold to tax qualified
pension plans or are sold to other sophisticated investors as "private
placements," and are exempt from registration under both acts. Some of our
subsidiaries are registered as broker/dealers under the Securities Exchange Act
of 1934, as amended (the "Securities Exchange Act"), and with the National
Association of Securities Dealers, Inc., and a number are registered as
investment advisers under the Investment Advisers Act of 1940. One subsidiary is
registered as a commodity pool operator and as a commodity trading advisor under
the Commodity Exchange Act. Our insurance companies or other subsidiaries also
own or manage other investment vehicles that are exempt from registration under
the Securities Act and the Investment Company Act but may be subject to other
requirements of those laws, such as antifraud provisions and the terms of
applicable exemptions. We are also subject to similar laws and regulations in
the states and foreign countries in which we provide investment advisory
services, offer the products described above or non-variable life and annuity
products or conduct other securities and investment related activities.


                                       33
<PAGE>

Environmental Considerations

      As owners and operators of real property, we are subject to extensive
federal, state and local environmental laws and regulations. Inherent in such
ownership and operation is the risk that there may be potential environmental
liabilities and costs in connection with any required remediation of such
properties. When deemed appropriate, we routinely conduct environmental
assessments for real estate being acquired for investment and before taking
title to property acquired through foreclosure or deed in lieu of foreclosure.
Based on these environmental assessments and compliance with our internal
environmental procedures, we believe that any costs associated with compliance
with environmental laws and regulations or any remediation of such properties
would not be material to our consolidated financial position. Furthermore,
although we hold equity positions in subsidiaries and investments that could
potentially be subject to environmental liabilities, we believe, based on our
assessment of the business and properties of these companies and our level of
involvement in the operation and management of such companies, that we would not
be subject to any environmental liabilities with respect to these investments
which would have a material adverse effect on our business, financial position
or results of operations.

ERISA Considerations

      Certain of our lines of business, including our management of employee
benefit plan assets in our advisory capacity in separate accounts, are subject
to the requirements of ERISA. In addition, the Small Business Job Protection
Act, which we refer to as the SBJPA, offers insurers protection from potential
litigation exposure prompted by the 1993 U.S. Supreme Court decision in John
Hancock Mutual Life Insurance Company v. Harris Trust & Savings Bank, which we
refer to as the Harris Trust Decision, in which the Court held that, with
respect to a portion of the funds held under certain general account group
annuity contracts, an insurer is subject to the fiduciary requirements of ERISA.
The pertinent SBJPA provisions provide that insurers are protected from
liability for breaches of fiduciary duties under ERISA for past actions with
respect to their general account contracts. However, insurers remain subject to
federal criminal law and liable for actions brought by the U.S. Secretary of
Labor alleging breaches of fiduciary duties that also constitute a violation of
federal or state criminal law. The SBJPA also provides that contracts issued
from an insurer's general account on or before December 31, 1998, that are not
guaranteed benefit policies, will not be subject to ERISA's fiduciary
requirements if they meet the requirements of regulations issued by the United
States Department of Labor. The SBJPA further provides that contracts issued
from an insurer's general account after December 31, 1998, that are not
guaranteed benefit policies will be subject to ERISA. In January 2000, the
Department of Labor published a regulation pursuant to the SBJPA which provides,
among other things, that if an employee benefit plan acquired an insurance
policy (other than a guaranteed benefit policy) issued on or before December 31,
1998 that is supported by the assets of the insurer's general account, the
plan's assets for purposes of ERISA will not be deemed to include any of the
assets of the insurer's general account, provided that the requirements of the
regulation are met. Accordingly, if those requirements are met, the insurer is
not subject to the fiduciary obligations of ERISA in connection with such an
insurance policy. These requirements include detailed disclosures to be made to
the employee benefit plan and the requirement that the insurer must permit the
policyholder to terminate the policy on 90 days' notice and receive without
penalty, at the policyholder's option, either (1) the accumulated fund balance
(which may be subject to market value adjustment) or (2) a book value payment of
such amount in annual installments with interest. John Hancock Life Insurance
Company intends to comply with the requirements set forth therein to secure the
exemption provided by the regulations from the fiduciary obligations of ERISA.
However, John Hancock Life Insurance Company's exposure to disintermediation
risk could increase due to the termination options that it would be required to
provide to policyholders. Any such increase, however, would not be material.
Since there has been no final ruling in the Harris Trust case (described under
"Item 3. Legal Proceedings" in this Form 10-K), we are unable at this time to
determine the effects of the decision, and therefore cannot compare the
litigation risk to the disintermediation risk created by compliance with the
regulations. With respect to employee welfare benefit plans subject to ERISA,
the Congress periodically has considered amendments to the law's Federal
preemption provision, which would expose John Hancock Life Insurance Company,
and the insurance industry generally, to state law causes of action, and
accompanying extra-contractual (e.g., punitive) damages in lawsuits involving,
for example, group life and group disability claims. To date, all such
amendments to ERISA have been defeated.


                                       34
<PAGE>

Employees

      As of March 1, 2001 we employed approximately 8,503 people. We believe our
relations with our employees are satisfactory.

ITEM 1A. Executive Officers of the Registrant

      The names of the executive officers of John Hancock Financial Services,
Inc. and their respective ages and positions, as of March 20, 2001:

<TABLE>
<CAPTION>
NAME                       AGE      POSITION
<S>                        <C>      <C>
Stephen L. Brown           63       Chairman of the Board and Director
David F. D'Alessandro      50       President, Chief Executive Officer, Chairman-elect and Director
Wayne A. Budd              59       Executive Vice President, General Counsel and Director
John M. DeCiccio           52       Executive Vice President, and Chief Investment Officer
Kathleen M. Graveline      49       Executive Vice President
Thomas E. Moloney          57       Chief Financial Officer
Robert F. Walters          52       Executive Vice President and Chief Information Officer
</TABLE>

Officers of the Company serve until their retirement, resignation, death or
removal. Set forth below is a description of their business positions during at
least the past five years:

      Stephen L. Brown, 63, is the Chairman of the Board and a director of John
Hancock Financial Services, Inc. and will retire on May 14, 2001. Since 1992, he
has been Chairman and Chief Executive Officer of John Hancock Life Insurance
Company and a John Hancock Life Insurance Company director since 1982. He is a
Fellow, Society of Actuaries, Enrolled Actuary under ERISA, member of American
Academy of Actuaries and Chartered Life Underwriter, American College of
Chartered Life Underwriters. He is a former director of the Federal Reserve Bank
of Boston. Mr. Brown became chairman of The Berkeley Financial Group in 1999
where he previously served as a director. He is the Chairman of the Executive
Committee of the board of directors of John Hancock Financial Services, Inc. Mr.
Brown is a trustee or director of twenty-five registered investment companies
advised by John Hancock Advisers, Inc., a registered investment adviser and
subsidiary of The Berkeley Financial Group. He is a director of John Hancock
Subsidiaries, Inc. Mr. Brown is also a director of Aspen Technology, Inc. and
Ionics, Incorporated.

      David F. D'Alessandro, 50, has been the President and Chief Executive
Officer and a director of the Company since 2000 and will also become Chairman
effective May 14, 2001, upon Mr. Brown's retirement. He had been President and
Chief Operations Officer of John Hancock Life Insurance Company since 1998 and
has been a John Hancock Life Insurance Company director since 1990. From 1988 to
1997 he was Senior Executive Vice President of John Hancock Life Insurance
Company. He is Vice Chairman and Chairman-elect of the Executive Committee of
the board of directors of John Hancock Financial Services, Inc., Chairman of
John Hancock Variable Life Insurance Company, and a director of John Hancock
Subsidiaries, Inc. and The Berkeley Financial Group. Mr. D'Alessandro is a
director of Partners Healthcare Systems, Inc., an integrated healthcare delivery
system, and Westvaco Corporation, a paper and paperboard producer.

      Wayne A. Budd, 59, has been Executive Vice President and General Counsel
and a director of the Company since 2000 and a John Hancock Life Insurance
Company director since 1998. He is a director of John Hancock Subsidiaries, Inc.
From 1996 to 2000, Mr. Budd was Group President - New England for the Bell
Atlantic Corporation. Prior to his position with Bell Atlantic, Mr. Budd was a
Senior Partner in the law firm of Goodwin Procter LLP. He is a director of Tosco
Corporation, an independent oil refiner and marketer of petroleum products.

      John M. DeCiccio, 52, has been an Executive Vice President of John Hancock
Financial Services, Inc. and Chief Investment Officer of John Hancock Life
Insurance Company since 2000. From 1994 through 2000, he was


                                       35
<PAGE>

Senior Vice President, Investment and Pension Sector, of John Hancock Mutual
Life Insurance Company. From 1997 through 2000, he led the demutualization
project for John Hancock Mutual Life Insurance Company. He is a director of John
Hancock Subsidiaries, Inc.

      Kathleen M. Graveline, 49, has been an Executive Vice President and Policy
Committee Member of John Hancock Financial Services, Inc. since 2000. She has
also been an Executive Vice President of John Hancock Mutual Life Insurance
Company since 1999. In 2000, she was elected Chairman of the board of directors
of John Hancock Signature Services. She is Chairman of Essex Corporation and a
director of John Hancock Subsidiaries, Inc. From 1996 through 1999, she was
Senior Vice President, Retail Sector, of John Hancock Mutual Life Insurance
Company.

      Thomas E. Moloney, 57, is the Chief Financial Officer of John Hancock
Financial Services, Inc. and John Hancock Life Insurance Company. He has been
Chief Financial Officer of John Hancock Mutual Life Insurance Company and John
Hancock Subsidiaries, Inc. since 1992. He is the Chairman and a director of John
Hancock Management Company and John Hancock Reassurance Co., Ltd. He is a
director of The Berkeley Financial Group, John Hancock Realty Services Corp.,
John Hancock Signature Services, John Hancock Subsidiaries, Inc., The Maritime
Life Assurance Company and John Hancock Canadian Holdings Limited.

      Robert F. Walters, 52, has been Executive Vice President and Chief
Information Officer of John Hancock Financial Services, Inc. and of John Hancock
Life Insurance Company since February 5, 2001. He is a director of Essex
Corporation. Mr. Walters is also a director of ART Technology Group, Inc., which
offers an integrated suite of Internet customer relationship management and
e-commerce software applications.

ITEM 2. Properties

      Our home office consists of our 60-story landmark office tower and five
other buildings located in Boston, Massachusetts. We own this facility and
occupy approximately 53.0% of the 3.8 million gross square feet of space in
these buildings. The balance of the space in these buildings is rented to
commercial tenants. In addition, we lease office space throughout the United
States as needed for our operations, including for our sales force. We believe
that our current facilities are adequate for our current and expected needs.

      Since 1987, we have entered into a series of lease agreements with a
non-affiliated organization for the rental of furniture and equipment. The
leases have a non-cancelable term of twelve months and an expected term of
approximately nine years. Annual aggregate commitments under these leases are
approximately $7.8 million.

ITEM 3. Legal Proceedings

Sales Practice Class Action Settlement

      Over the past several years, companies engaged in the life insurance
business have faced extensive claims, including class-action lawsuits, alleging
improper marketing and sales of individual life insurance policies or annuities.
On December 31, 1997, the United States District Court for the District of
Massachusetts approved a settlement of a nationwide class action lawsuit
regarding sales practices against John Hancock Mutual Life Insurance Company,
John Hancock Variable Life Insurance Company and John Hancock Distributors,
Inc., Duhaime, et al. v. John Hancock Mutual Life Insurance Company, John
Hancock Variable Life Insurance Company and John Hancock Distributors, Inc. With
certain limited exceptions, the class that is bound by the terms of the
settlement includes persons and entities who at any time during the class period
(January 1, 1979 through December 31, 1996) had an ownership interest in one or
more of our whole life, universal life or variable life insurance policies (and
certain annuities and mutual funds) issued during the class period.


                                       36
<PAGE>

      In conjunction with this settlement, we have established a reserve that
stood at $172.7 million at December 31, 2000. Given the uncertainties associated
with estimating the reserve, it is reasonably possible that the final cost of
the settlement could differ materially from the amounts presently provided for
by us. We will continue to update this estimate of the final cost of the
settlement as the claims are processed and more specific information is
developed, particularly as the actual cost of the claims subject to alternative
dispute resolution becomes available. However, based on information available at
the time, and the uncertainties associated with the final claim processing and
alternate dispute resolution and arbitration, the range of any additional costs
related to the settlement cannot be estimated with precision.

Harris Trust Litigation

      Since 1983, we have been involved in complex litigation known as Harris
Trust and Savings Bank, as Trustee of Sperry Master Retirement Trust No. 2 v.
John Hancock Mutual Life Insurance Company (S.D.N.Y. Civ. 83-5491). This lawsuit
originally raised only state law causes of action, but in 1984, the plaintiff
amended the Complaint to allege that John Hancock was a fiduciary and party in
interest under ERISA in rendering investment advice and exercising control over
plan assets. Plaintiff alleged that John Hancock breached its fiduciary duty in
failing to act for the exclusive benefit of plan participants by retaining
excess funds of the plan, by imposing arbitrary charges for a return of plan
funds, by failing to pay an appropriate rate of interest on plan funds, and by
charging the plan excessive compensation. In 1989, the district court dismissed
all of plaintiff's ERISA claims and, in 1991, also dismissed all of plaintiff's
state law claims. The plaintiff appealed to the Second Circuit Court of Appeals,
seeking reversal of several of the district court's rulings, including two of
the rulings regarding the applicability of ERISA to the dispute. The district
court's state law rulings were upheld, and the ERISA rulings were affirmed in
part and reversed in part. Specifically, the Second Circuit upheld the district
court's conclusion that John Hancock was not a fiduciary under ERISA with
respect to the insurance policy as a contract. The Second Circuit, however,
reversed the district court's determination that none of the assets, held by
John Hancock in its general account in connection with this contract were plan
assets, and held that "free funds" associated with this contract constitute plan
assets for ERISA purposes. This decision was appealed to the Supreme Court,
which affirmed the Second Circuit's ruling in 1993. The Department of Labor
filed an amicus brief in support of John Hancock's position on the merits before
the Supreme Court. The case was remanded to the district court. The case was
tried to a federal district court judge in 1997, and the judge issued an opinion
in November 2000.

      In that opinion the judge determined that John Hancock should have allowed
the Trust to withdraw the free funds by means of an extracontractual payout. The
Court awarded the Trust $13,767,200 in relation to this claim together with
unspecified additional pre-judgment interest on this amount from October 1988.

      The Court also determined that Hancock violated its fiduciary duty when it
failed to revalue the liabilities for guaranteed benefits, which had been
established at rates set out in the contract, on a basis which was more
favorable to the Trust. In addition, the Court concluded that certain of
Hancock's internal allocations of expenses and investment income violated ERISA.
Damages in the amount of $5,724,528, together with unspecified prejudgment
interest from December 1996, were awarded on these issues. As part of the
relief, the judge ordered the removal of Hancock as a fiduciary to the plan.

      The Court also awarded the Plaintiff unspecified fees and costs. Given
this litigation's long history, the amount of these fees and costs, along with
the pre-judgment interest, may substantially exceed the damages already awarded
by the District Court judge. However, we believe that the underlying case was
incorrectly decided and we intend to appeal the lower court's decision.
Notwithstanding what we believe to be the merits of the Company's position in
this case, we are unable to predict the outcome of our appeal; and, if
unsuccessful, our ultimate liability, including fees, costs and interest could
be material with respect to earnings in any given reporting period. However, we
do not believe that any such liability would be material in relation to our
financial position or liquidity.


                                       37
<PAGE>

Other Legal and Regulatory Proceedings

      We are regularly involved in other litigation, both as a defendant and as
a plaintiff. The litigation naming us as a defendant ordinarily involves our
activities as a provider of insurance protection products, as well as an
investment adviser, employer and taxpayer. In addition, state regulatory bodies,
the United States Securities and Exchange Commission, the National Association
of Securities Dealers, Inc. and other regulatory bodies regularly make inquiries
and, from time to time conduct examinations concerning our compliance with,
among other things, insurance laws, securities laws, and laws governing the
activities of broker/dealers. We do not believe at this time that the ultimate
resolution of any of these legal or regulatory matters that are currently
pending, either individually or in the aggregate, will have a material adverse
effect on our financial condition or results of operations.

ITEM 4. Submission of Matters to a Vote of Security Holders

      No matter was submitted to a vote of security holders of John Hancock
Financial Services, Inc. during the fourth quarter of the fiscal year covered by
this report.


                                       38
<PAGE>

PART II

ITEM 5. Market for John Hancock Financial Services, Inc. Common Stock and
        Related Stockholder Matters

      John Hancock's common stock began trading on the New York Stock Exchange
(NYSE) under the symbol "JHF" on January 27, 2000. Prior to such date, there was
no established public trading market for the common stock. For a description of
the use of proceeds from the Offerings see Management's Discussion and Analysis
of Financial Condition and Results of Operations - Liquidity and Capital
Resources, included elsewhere in this Form 10-K. As of March 20, 2001, there
were approximately 800,000 shareholders of record and 309.7 million shares
outstanding with a closing price of $36.02.

The following table presents the high and low closing prices for the common
stock of John Hancock on the NYSE for the period indicated and the quarterly
dividend declared per share.

                                                     High      Low     Dividends
                                                     ----      ---     ---------

2000
For the period from February 1, 2000 through
    March 31, 2000                                  $18.81    $13.44      N/A
Second Quarter                                      $24.63    $16.38      N/A
Third Quarter                                       $28.13    $20.63      N/A
Fourth Quarter                                      $38.25    $25.63     $0.30

      John Hancock paid an initial annual cash dividend of $.30 per common share
on December 14, 2000 to shareholders of record on the close of business on
November 20, 2000. Future dividend decisions will be based on, and affected by,
a number of factors, including the operating results and financial requirements
of the Company and the impact of regulatory restrictions. See Regulation and
Management's Discussion and Analysis - Liquidity and Capital Resources, included
elsewhere in this Form 10-K.

ITEM 6. Selected Financial Data

      The following table sets forth certain selected historical consolidated
financial data. The selected income statement data for each of the years in the
three year period ended December 31, 2000 and balance sheet data as of December
31, 2000 and 1999 have been derived from our audited consolidated financial
statements and related notes, included elsewhere in this Form 10-K and should be
read in conjunction with those financial statements and Management's Discussion
and Analysis of Financial Condition and Results of Operations, also included
elsewhere in this Form 10-K. The following selected income statement data for
the years ended December 31, 1997 and 1996 and balance sheet data as of December
31, 1998, 1997 and 1996 have been derived from our audited consolidated
financial statements not included herein. The following selected consolidated
financial data has been prepared in accordance with GAAP, except that the
statutory data presented below has been prepared in accordance with applicable
statutory accounting practices and was taken from our annual statements filed
with insurance regulatory authorities. Certain reclassifications to prior
periods have been made to conform to the current period presentations.


                                       39
<PAGE>

<TABLE>
<CAPTION>
                                                                  For the Year Ended December 31,
                                                     ------------------------------------------------------
                                                        2000       1999        1998       1997       1996
                                                     ---------  ---------   ---------  ---------  ---------
                                                                         (in millions)
<S>                                                  <C>        <C>         <C>        <C>        <C>
Income Statement Data: (1)
Revenues
Premiums ..........................................  $ 2,587.1  $ 2,717.5   $ 2,197.9  $ 2,473.6  $ 2,922.5
Universal life and investment-type product
   charges ........................................      749.3      703.5       597.0      512.0      466.3
Net investment income .............................    3,271.4    3,574.0     3,330.7    3,190.7    3,223.1
Net realized investment gains, net of related
   amortization of deferred policy acquisition
   costs and amounts credited to participating
   pension contractholders (2) ....................       83.2      175.1       106.4      157.0      110.7
Investment management revenues,
   commissions and other fees .....................      764.8      680.9       659.7      554.7      751.3
Other revenue .....................................       18.2        6.5        10.3       58.3      230.9
Contribution from the closed block (5) ............      124.1         --          --         --         --
                                                     ---------  ---------   ---------  ---------  ---------
      Total revenues ..............................    7,598.1    7,857.5     6,902.0    6,946.3    7,704.8
      Total benefits and expenses (3) (4) .........    6,413.0    7,595.3     6,275.9    6,356.6    7,036.8
                                                     ---------  ---------   ---------  ---------  ---------

Income before income taxes and cumulative effect
   of accounting change ...........................    1,185.1      262.2       626.1      589.7      668.0
Income taxes ......................................      346.2       99.3       177.6      106.4      247.5
                                                     ---------  ---------   ---------  ---------  ---------
Income before cumulative effect of accounting
   change .........................................      838.9      162.9       448.5      483.3      420.5

Cumulative effect of accounting change ............         --       (9.7)         --         --         --
                                                     ---------  ---------   ---------  ---------  ---------
      Net income ..................................  $   838.9  $   153.2   $   448.5  $   483.3  $   420.5
                                                     =========  =========   =========  =========  =========
Basic earnings per common share (6)
   Income before cumulative effect of
      accounting change ...........................  $    2.67  $    0.52
   Cumulative effect of accounting change .........         --       0.03
   Net income .....................................  $    2.67  $    0.49

Diluted earnings per common share (6)
   Income before cumulative effect of
      accounting change ...........................  $    2.65  $    0.52
   Cumulative effect of accounting change .........         --       0.03
   Net income .....................................       2.65       0.49
Cash dividends paid per share .....................       0.30         --
</TABLE>

<TABLE>
<CAPTION>
                                        As of or for the Year Ended December 31,
                                 -----------------------------------------------------
                                    2000       1999       1998       1997      1996
                                 ---------  ---------  ---------  ---------  ---------
                                                     (in millions)
<S>                              <C>        <C>        <C>        <C>        <C>
Balance Sheet Data:
General account assets ........  $60,898.5  $56,408.1  $52,000.1  $49,906.4  $48,420.6
Separate account assets .......   26,454.8   28,047.6   24,966.6   21,511.1   18,082.1
Total assets ..................   87,353.3   84,455.7   76,966.7   71,417.5   66,502.7
General account liabilities ...   54,491.8   50,986.6   46,416.9   44,667.7   43,265.9
Long-term debt ................      534.0      536.9      602.7      543.3    1,037.0

Separate account liabilities ..   26,454.8   28,047.6   24,966.6   21,511.1   18,082.1
Total liabilities .............   81,480.6   79,571.1   71,986.2   66,722.1   62,385.0

Minority interest .............       93.5       93.5       25.3       25.3       25.3

Shareholders' equity (7) ......    5,779.2    4,791.1    4,955.2    4,670.1    4,092.4
</TABLE>


                                       40
<PAGE>

      We evaluate segment performance and base management's incentives on
segment after-tax operating income. For a discussion of segment after-tax
operating income see Management's Discussion and Analysis of Financial Condition
and Results of Operations included elsewhere in this Form 10-K.

(1)   We have completed a number of transactions which have affected the
      comparability of our results of operations.

      On March 31, 1999, we completed the sale of Unigard Security Insurance
      Company ("USIC") and John Hancock Insurance Co. of Bermuda Ltd. ("John
      Hancock Bermuda"). The sale of USIC was completed by entering into a 100%
      quota share reinsurance agreement with a third party reinsurer and then
      through a stock sale. We also sold 100% of the stock of John Hancock
      Bermuda, which offered reinsurance products and services. Assets and
      liabilities transferred in connection with both sales amounted to $381.0
      million and $161.8 million, respectively. The sale of USIC resulted in an
      after-tax loss of $21.4 million. John Hancock Bermuda was sold for its net
      book value which resulted in the recognition of no gain or loss.

      On February 28, 1997, we sold a major portion of our group insurance
      business to UNICARE Life & Health Insurance Company ("UNICARE"), a
      wholly-owned subsidiary of WellPoint Health Networks, Inc. The business
      sold included our group accident and health business and related group
      life insurance business and Cost Care, Inc., Hancock Association Services
      Group and Tri-State Inc, all of which were indirectly wholly-owned
      subsidiaries of the Company. The Company retained its group long-term care
      operations. Assets equal to liabilities of $686.7 million at February 28,
      1997 were transferred to UNICARE in connection with the sale. Income from
      operations in 1997 was not significant. The insurance business sold was
      transferred to UNICARE through a 100% coinsurance agreement.

      On November 29, 1996, we closed the sale of 95% of John Hancock Freedom
      Securities Corporation ("Freedom Securities"), a holding company, and its
      subsidiaries, primarily Tucker Anthony Incorporated and Sutro and Co.,
      both broker/dealers. Net assets transferred were approximately $164.3
      million and the sale resulted in the recognition of a $25.1 million
      pre-tax gain in 1996. We sold the remaining 5% of Freedom Securities
      during 1998 and recognized a pre-tax gain of $4.3 million.

      Effective July 1, 1996, John Hancock Property and Casualty Insurance
      Company ("JHP&C") and its wholly-owned subsidiary, John Hancock Indemnity
      Company ("Indemnity") each entered into a quota share reinsurance
      agreement with a third party reinsurer under which they ceded 100% of
      their loss, loss adjustment expense and unearned premium reserves at June
      30, 1996, relating to continuing operations. Under the terms of the quota
      share reinsurance agreement, JHP&C cedes 100% of all continuing operations
      business written subsequent to June 30, 1996. Net assets transferred were
      approximately $12.0 million and no gain or loss was recognized on the
      transaction. On September 12, 1996, JHP&C sold 100% of the stock of
      Indemnity. Net assets transferred were approximately $6.0 million and the
      sale resulted in the recognition of a $6.0 million pre-tax gain. On
      September 9, 1999, we sold 100% of the stock of JHP&C. Net assets were
      approximately $21.0 million and no gain or loss was recognized on the
      sale.


                                       41
<PAGE>

      The disposed businesses' results of operations for each of the three years
      in the three-year period ended December 31, 2000 are presented below:

<TABLE>
<CAPTION>
                                                                  For the Year Ended December 31,
                                                                    2000         1999         1998
                                                                  -------      -------      -------
                                                                            (in millions)
      <S>                                                         <C>          <C>          <C>
      Income Statement Data:
          Revenues
            Premiums ........................................     $    --      $    --      $    --
            Net investment income ...........................        (2.7)         9.0         29.9
            Net realized investment (losses) gains, net of
               related amortization of deferred policy
               acquisition costs and amounts credited to
               participating pension contractholders ........         0.3        (23.0)        20.5
            Other (expense) revenue .........................          --         (2.9)         (.7)
                                                                  -------      -------      -------
                  Total revenues ............................        (2.4)       (16.9)        49.7

          Benefits and expenses
            Benefits to policyholders, excluding amounts
               related to net realized investment gains
               credited to participating pension
               contractholders ..............................         8.8        243.6         11.2
            Other operating costs and expenses ..............         4.4           --           --
            Amortization of deferred acquisition costs,
               excluding amounts related to net realized
               investment gains .............................          --           --           --
            Dividends to policyholders ......................          --           --           --
                                                                  -------      -------      -------
                  Total benefits and expenses ...............        13.2        243.6         11.2
                                                                  -------      -------      -------

          Income before income taxes ........................       (15.6)      (260.5)        38.5
            Income taxes ....................................        (4.5)      (113.8)         7.5
                                                                  -------      -------      -------
          Net (loss) income .................................     $ (11.1)     $(146.7)     $  31.0
                                                                  =======      =======      =======
</TABLE>

(2)   Net realized investment gains have been reduced by: (1) amortization of
      deferred policy acquisition costs to the extent that such amortization
      results from realized gains and losses and (2) the portion of realized
      gains and losses credited to participating pension contractholder
      accounts. We believe presenting realized investment gains and losses in
      this format provides information useful in evaluating our operating
      performance. This presentation may not be comparable to presentations made
      by other insurers. For a presentation of net realized gains and related
      amounts see Management's Discussion and Analysis of Financial Condition
      and Results of Segment Operations included elsewhere in this Form 10-K.

(3)   Total benefits and expenses includes benefits to policyholders of $4,457.1
      million, $5,418.4 million, $4,152.0 million, $4,303.1 million, $4,676.7
      million for the years ended December 31, 2000, 1999, 1998, 1997 and 1996,
      respectively. Benefits to policyholders excludes amounts related to net
      realized investment gains credited to participating pension
      contractholders of $6.9 million, $35.3 million, $79.1 million, $29.3
      million and $22.3 million for the years ended December 31, 2000, 1999,
      1998, 1997 and 1996, respectively.


                                       42
<PAGE>

(4)   Total benefits and expenses includes amortization of deferred policy
      acquisition costs of $191.6 million, $166.8 million, $249.7 million,
      $312.0 million, and $230.9 million for the years ended December 31, 2000,
      1999, 1998, 1997 and 1996, respectively. Amortization of deferred policy
      acquisition costs excludes amounts related to net realized investment
      gains of $(0.9) million, $50.5 million, $41.2 million, $31.2 million and
      $17.6 million for the years ended December 31, 2000, 1999, 1998, 1997 and
      1996, respectively.

(5)   For additional information on the creation of the closed block see Note 5
      to our audited consolidated financial statements, included elsewhere in
      this Form 10-K.

(6)   This is unaudited pro forma information which gives effect to the
      Reorganization and Initial Public Offering (IPO) of the Company referred
      to in Note 1 to our audited consolidated financial statements. Because the
      Company did not have outstanding common stock prior to its IPO on February
      1, 2000, the 1999 per share balances represent earnings per common share
      on a pro forma basis for the period January 1, 1999 through December 31,
      1999 using 314.8 million outstanding common shares for the basic and
      diluted calculations. The 2000 earnings per common share balances
      represent earnings per common share on a pro forma basis for the period
      from January 1, 2000 through December 31, 2000 using 314.5 million and
      316.2 million outstanding shares for the basic and diluted earnings per
      share calculations, respectively. Actual net income per common share for
      the period from February 1, 2000 through December 31, 2000 was $2.53 and
      $2.51 for the basic and diluted calculations, respectively. No cumulative
      effect of accounting change occurred in 2000. Pro forma earnings per share
      for the periods prior to 1999 are presented as it would not be meaningful.

(7)   Includes adjustment under Statement of Financial Accounting Standards No.
      115, "Accounting for Certain Investments in Debt and Equity Securities."
      Balances prior to 2000 are formerly referred to as policyholders' equity.

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

      Management's Discussion and Analysis of Financial Condition and Results of
Operations is incorporated herein by reference to Management's Discussion and
Analysis of Financial Condition and Results of Operations in our Annual Report
to Shareholders which is included in Exhibit 13 to this Form 10-K.

ITEM 7A. Quantitative and Qualitative Information About Market Risk

      John Hancock Financial Services, Inc.'s exposure to market risk is
primarily related to credit risk and interest rate risk. Quantitative and
Qualitative Information About Market Risk resulting from credit issues and
interest rates are incorporated herein by reference to Quantitative and
Qualitative Information About Market Risk in Management's Discussion and
Analysis of Financial Condition and Results of Operations in our Annual Report
to Shareholders which is included in Exhibit 13 to this Form 10-K.

ITEM 8. Financial Statements and Supplementary Data

      The Company's Financial Statements and Supplementary Data is incorporated
herein by reference to our Annual Report to Shareholders which is included in
Exhibit 13 to this Form 10-K.

ITEM 9. Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure

None.


                                       43
<PAGE>

PART III

ITEM 10. Directors and Executive Officers of John Hancock Financial Services

      Certain of the information called for by Item 10 is set forth in the
definitive proxy statement for the 2001 annual meeting of stockholders (the
Proxy Statement) filed or to be filed by John Hancock Financial Services with
the United States Securities and Exchange Commission within 120 days after the
end of the fiscal year covered by this Form 10-K under the caption "Proposal 1
Election of Directors" and "The Board of Directors and Its Committees - General
Information and Committees" and is incorporated herein by reference. Additional
information required by Item 10 regarding John Hancock Financial Services'
executive officers is set forth in Item 1A of this Form 10-K under the caption
"Executive Officers of the Registrant".

ITEM 11. Executive Compensation

The information called for by Item 11 is set forth in the Proxy Statement under
the captions "Executive Compensation" and "The Board of Directors and Its
Committees - Compensation of Directors" and is incorporated herein by reference.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management

The information called for by Item 12 is set forth in the Proxy Statement under
the caption "Voting Procedures and Security Ownership - Security Ownership" and
is incorporated herein by reference.

ITEM 13. Certain Relationships and Related Transactions

The information called for by Item 13 is set forth in the Proxy Statement under
the caption "The Board of Directors and Its Committees - Certain Relationships"
and "Executive Compensation - Stock Ownership and Loan Program" and is
incorporated herein by reference.


                                       44
<PAGE>

PART IV

ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)   Documents filed as part of this report.

1.    Financial Statements (See Item 8. Financial Statements
         and Supplementary Data)
      Report of Ernst & Young LLP, Independent Auditors
      Consolidated Financial Statements
         Income Statements
         Balance Sheets
         Statements of Shareholders' Equity and Comprehensive Income
         Statements of Cash Flows
         Notes to Financial Statements
2.    Financial Statement Schedules
         Schedule I - Summary of Investments - Other Than Investments in
            Affiliates
         Schedule II - Condensed Financial Information of Registrant
         Schedule III - Supplementary Insurance Information
         Schedule IV - Reinsurance

Note: All other financial statement schedules are omitted because they are
inapplicable.

3.    EXHIBITS. See exhibit on next page.

                                    EXHIBITS
Exhibit
Number                        Description
------                        -----------

2.1      Plan of Reorganization**

3.1      Restated Certificate of Incorporation of John Hancock Financial
         Services, Inc.**

3.2      Amended and Restated By-laws of John Hancock Financial Services, Inc.*

10.1     Credit Agreement dated as of August 3, 2000, among John Hancock
         Financial Services, Inc., John Hancock Life Insurance Company, John
         Hancock Capital Corporation, The Banks listed therein, Fleet National
         Bank, as Co-Administrative Agent, The Chase Manhattan Bank, as
         Co-Administrative Agent, Citicorp USA, Inc., as Syndication Agent, and
         BankOne, NA as Documentation Agent, and FleetBoston Robertson Stephens,
         Inc., and Chase Securities, Inc., as Joint Book Managers and Joint Lead
         Arrangers. ***

10.2     Amended and Restated Retention Agreement between John Hancock Life
         Insurance Company and Kathleen M. Graveline.****+

10.3     Fiscal Agency Agreement, dated as of February 25, 1994 by and between
         John Hancock Mutual Life Insurance Company, as Issuer, and First
         National Bank of Boston, as Fiscal Agent**

10.4     Reinsurance Agreement, dated as of July 30, 1992 by and between John
         Hancock Mutual Life Insurance Company and Provident Life and Accident
         Insurance Company**

10.5     Reinsurance Agreement, dated as of July 30, 1992 by and between John
         Hancock Mutual Life Insurance Company and Provident Life and Accident
         Insurance Company**

10.6     Coinsurance Agreement, dated as of March 1, 1997 by and between John
         Hancock Financial Life Insurance Company and UNICARE Life & Health
         Insurance Company**

10.7     Letter of Credit Agreement, dated as of January 2, 1997 by and among
         John Hancock Mutual Life Insurance Company, Banks named therein and
         Morgan Guaranty Trust Company of New York as Issuing Bank and Agent**

10.8     Long-Term Incentive Plan for Senior Executives@+

10.9     Form of Employment Continuation Agreement**+


                                       45
<PAGE>

10.10    Form of Stockholder Rights Agreement**+

10.11    1999 Long-Term Stock Incentive Plan**+

10.11.1  First Amendment to the 1999 Long-Term Stock Incentive Plan**+

10.11.2  Incentive Compensation Plan For Employees@+

10.12    Form of Note for Stock Ownership And Loan Program *+

10.13    Deferred Compensation Plan for Non-Employee Directors *+

10.14    Deferred Equity Rights Program for Non-Employee Directors*+

10.15    Deferred Compensation Plan for Executives@+

13       Portions of John Hancock Financial Services, Inc. 2000 Annual Report to
         Shareholders that are expressly incorporated herein by reference in
         this Form 10-K. Other sections of the Annual Report furnished for the
         information of the Commission are not deemed "filed" as part of this
         Form 10-K.*

21.1     Subsidiaries of the Registrant*

23.1     Consent of Ernst & Young LLP*


Any exhibit not included with this Form 10-K when furnished to any shareholder
of record will be furnished to such shareholder upon written request and payment
of up to $.25 per page plus postage. Such requests should be directed to John
Hancock Financial Services, Inc., Investor Relations, John Hancock Place, Post
Office Box 111, Boston, Massachusetts 02117.

*        Filed herewith

**       Previously filed as an exhibit to John Hancock Financial Services,
         Inc.'s S-1 Registration Statement (file no. 333-87271), and
         incorporated by reference herein.

***      Previously filed as Exhibit 10 to John Hancock Financial Services,
         Inc.'s quarterly report on Form 10-Q for the quarter ended June 30,
         2000, and incorporated by reference herein.

****     Previously filed as Exhibit 10.1 to John Hancock Financial Services,
         Inc.'s quarterly report on Form 10-Q for the quarter ended March 31,
         2000, and incorporated by reference herein.

@        Previously filed as an exhibit to John Hancock Financial Services,
         Inc.'s S-8 Registration Statement (file no. 333-55064), and
         incorporated by reference herein.

+        Management Contract or Compensatory Plan or Arrangement.

(b) Reports on Form 8-K.

There were no reports on Form 8-K required to be filed during the fourth quarter
of 2000.

(c) See Item 14 (a) 3.

(d) See Item 14 (a) 2.


                                       46
<PAGE>

                      JOHN HANCOCK FINANCIAL SERVICES, INC.

                     SCHEDULE I -- SUMMARY OF INVESTMENTS -
                    OTHER THAN INVESTMENTS IN RELATED PARTIES
                             As of December 31, 2000
                                  (in millions)

<TABLE>
<CAPTION>
                                                                                                  AMOUNT AT WHICH
                                                                                                   SHOWN IN THE
                                                                                                   CONSOLIDATED
TYPE OF INVESTMENT                                                 COST (2)          VALUE         BALANCE SHEET
------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>             <C>                <C>
Fixed maturity securities, available-for-sale:
Bonds:
United States government and government agencies
   and authorities                                                    243.2           247.9              247.9
States, municipalities and political subdivisions                     126.6           126.7              126.7
Foreign governments                                                 1,387.5         1,455.0            1,455.0
Public utilities                                                    1,052.6         1,086.2            1,086.2
Convertibles and bonds with warrants attached                         250.9           258.4              258.4
All other corporate bonds                                          12,157.3        12,296.7           12,296.7
Certificates of deposits                                                0.0             0.0                0.0
Redeemable preferred stock                                            611.6           591.0              591.0
                                                                 ---------------------------------------------
Total fixed maturity securities, available-for-sale                15,829.7        16,061.9           16,061.9
                                                                 ---------------------------------------------

Equity securities, available-for-sale:
Common stocks:
Public utilities                                                        4.7             5.5                5.5
Banks, trust and insurance companies                                   20.6            21.0               21.0
Industrial, miscellaneous and all other                               724.4           990.2              990.2
Non-redeemable preferred stock                                        120.9           117.7              117.7
                                                                 ---------------------------------------------
Total equity securities, available-for-sale                           870.6         1,134.4            1,134.4
                                                                 ---------------------------------------------

Fixed maturity securities, held-to-maturity:
Bonds
United States government and government
   agencies and authorities                                            32.5            33.2               32.5
States, municipalities and political subdivisions                     717.4           701.3              717.4
Foreign governments                                                     5.6            10.2                5.6
Public utilities                                                      973.2           901.3              973.2
Convertibles and bonds with warrants attached                         174.2           149.0              174.2
All other corporate bonds                                           9,985.7         9,856.2            9,985.7
Certificates of deposits                                                0.0             0.0                0.0
Redeemable preferred stock                                              0.0             0.0                0.0
                                                                 ---------------------------------------------
         Total fixed maturity securities, held-to-maturity         11,888.6        11,651.2           11,888.6
                                                                 ---------------------------------------------
</TABLE>


                                       47
<PAGE>

                      JOHN HANCOCK FINANCIAL SERVICES, INC.

                     SCHEDULE I -- SUMMARY OF INVESTMENTS -
             OTHER THAN INVESTMENTS IN RELATED PARTIES - (CONTINUED)
                             As of December 31, 2000
                                  (in millions)

<TABLE>
<CAPTION>
                                                                                                   AMOUNT AT WHICH
                                                                                                     SHOWN IN THE
                                                                                                     CONSOLIDATED
TYPE OF INVESTMENT                                                 COST (2)        VALUE            BALANCE SHEET
------------------------------------------------------------------------------------------------------------------
<S>                                                                <C>             <C>                <C>
Equity securities, trading:
Common stocks:
Public utilities                                                        7.1             8.6                8.6
Banks, trust and insurance companies                                   14.9            24.6               24.6
Industrial, miscellaneous and all other                               171.4           198.4              198.4
Non-redeemable preferred stock                                          0.0             0.0                0.0
                                                                 -------------------------------------------------
Total equity securities, trading                                      193.4           231.6              231.6
                                                                 -------------------------------------------------

Mortgage loans on real estate, net (1)                              9,039.4            XXXX            8,969.4
Real estate, net:
Investment properties (1)                                             386.8            XXXX              373.6
Acquired in satisfaction of debt (1)                                  175.7            XXXX              145.4
Policy loans                                                          428.6            XXXX              428.6
Other long-term investments (2)                                     1,353.0            XXXX            1,353.0
Short-term investments                                                151.9            XXXX              151.9
                                                                 -------------------------------------------------
    Total investments                                              40,317.7        29,079.1           40,738.4
                                                                 =================================================
</TABLE>

(1) Difference from Column B is primarily due to valuation allowances due to
impairments on mortgage loans on real estate and due to accumulated depreciation
and valuation allowances due to impairments on real estate. See note 2 to the
audited consolidated financial statements.

(2) Difference from Column B is primarily due to operating gains (losses) of
investments in limited partnerships.


                                       48
<PAGE>

                      JOHN HANCOCK FINANCIAL SERVICES, INC.

                 SCHEDULE II -- CONDENSED FINANCIAL INFORMATION
                           OF REGISTRANT (Parent Only)

                                  BALANCE SHEET

<TABLE>
<CAPTION>
                                                                               December 31, 2000
                                                                              ------------------
<S>                                                                                <C>
Assets                                                                           (in millions)
Investments:
Investment in unconsolidated subsidiaries                                          $5,677.3
                                                                              ------------------

      Total Investments                                                             5,677.3

Cash and cash equivalents                                                             106.5
Account receivable                                                                      3.6
Income taxes                                                                            3.6
Other assets                                                                            5.3
                                                                              ------------------
      Total Assets                                                                 $5,796.3
                                                                              ==================

Liabilities and Shareholders' Equity
Liabilities:
Dividends payable to shareholders                                                     $17.1
                                                                              ------------------

      Total Liabilities                                                                17.1

Shareholders' Equity
Common stock, $.01 par value; 2.0 billion shares authorized;
    315.0 million shares issued, 312.0 million shares outstanding                       3.2
Additional paid in capital                                                          5,086.4
Retained earnings                                                                     700.6
Accumulated other comprehensive income                                                 80.9
Treasury stock, at cost (3.0 million shares)                                          (91.8)
                                                                              ------------------
      Total Shareholders' Equity                                                    5,779.2

      Total Liabilities and Shareholders' Equity                                   $5,796.3
                                                                              ==================
</TABLE>

The condensed financial information should be read in conjunction with the
audited consolidated financial statements and notes thereto.


                                       49
<PAGE>

                      JOHN HANCOCK FINANCIAL SERVICES, INC.

                  SCHEDULE II - CONDENSED FINANCIAL INFORMATION
                           OF REGISTRANT (Parent Only)

                               STATEMENT OF INCOME

                                                                  Year Ended
                                                               December 31, 2000
                                                               -----------------
                                                                 (in millions)

Revenues
      Net investment income                                           $11.9
      Other revenue                                                     0.2
                                                               -----------------
        Total revenues                                                 12.1

Benefits and expenses
      Other operating costs and expenses                               31.7
                                                               -----------------
        Total benefits and expenses                                    31.7

Loss before income taxes                                              (19.7)

Income taxes                                                            3.6
                                                               -----------------
Net loss after taxes                                                  (16.1)

Equity in the net income of unconsolidated subsidiaries               811.0
                                                               -----------------

Net income                                                           $794.9
                                                               =================

The condensed financial information should be read in conjunction with the
audited consolidated financial statements and notes thereto.


                                       50
<PAGE>

                      JOHN HANCOCK FINANCIAL SERVICES, INC.

                 SCHEDULE II -- CONDENSED FINANCIAL INFORMATION
                           OF REGISTRANT (Parent Only)

                             STATEMENT OF CASH FLOWS

                                                                  Year Ended
                                                              December 31, 2000
                                                              -----------------
                                                                 (in millions)
Net income                                                            $794.9
   Adjustments to reconcile net income to net cash
     used in operating activities:
        Depreciation                                                     0.1
        Equity in the undistributed net income of
           unconsolidated subsidiaries                                (811.0)
        Amounts received from unconsolidated subsidiaries
           related to stock option plans                                 3.5
        Increase in accounts receivables                                (3.6)
        Increase in income taxes                                        (3.6)
        Increase in other assets                                        (5.4)
        Increase in dividends payable to shareholders                   17.1
                                                                  -------------
                 Net cash used in operating activities                  (7.9)

Cash flows from investing activities:
  Capital contributed to unconsolidated subsidiaries                (1,823.1)
  Dividends received from unconsolidated subsidiaries                  466.0
                                                                  -------------

                 Net cash used in investing activities              (1,357.1)

Cash flows from financing activities
    Issuance of common stock                                         1,657.7
    Acquisition of treasury stock at cost                              (91.8)
    Dividends paid on common stock                                     (94.3)
                                                                  -------------

                 Net cash provided by financing activities           1,471.5

                 Net increase in cash and cash equivalents             106.5

 Cash and cash equivalents at beginning of year                         --
                                                                  -------------

Cash and cash equivalents at the end of the year                      $106.5
                                                                  =============

The condensed financial information should be read in conjunction with the
audited consolidated financial statements and notes thereto.


                                       51
<PAGE>

                      JOHN HANCOCK FINANCIAL SERVICES, INC.

                     SCHEDULE III -- SUPPLEMENTARY INSURANCE
           INFORMATION As of December 31, 2000, 1999 and 1998 and for
                          each of the years then ended
                                  (in millions)

<TABLE>
<CAPTION>
                                            FUTURE                      OTHER
                                            POLICY                      POLICY
                                           BENEFITS,                    CLAIMS
                             DEFERRED       LOSSES,                      AND
                              POLICY      CLAIMS AND                   BENEFITS
                            ACQUISITION      LOSS         UNEARNED     PAYABLE       PREMIUM
          SEGMENT              COSTS       EXPENSES     PREMIUMS (1)     (1)         REVENUE

<S>                         <C>           <C>           <C>           <C>            <C>
2000:
Protection                  $ 1,606.4     $ 4,814.4     $   262.6     $    33.5      $   684.2
Asset Gathering                 558.2       5,619.9            --          (4.5)          63.4
Guaranteed & Structured
Financial Products                8.5      21,962.4          60.4           0.7          763.4
Investment Management              --            --            --            --             --
Corporate & Other               355.0       6,471.6         348.3         224.0        1,076.1
     Total                  $ 2,528.1     $38,868.3     $   671.3     $   253.7      $ 2,587.1

1999:
Protection                  $ 2,383.8     $15,035.0     $   217.4     $   112.1      $ 1,431.7
Asset Gathering                 521.5       5,166.8            --           0.2           17.2
Guaranteed & Structured
Financial Products                8.4      20,310.4          56.1           0.5          463.7
Investment Management              --            --            --            --             --
Corporate & Other               321.2       6,629.1         216.7         246.1          804.9
     Total                  $ 3,234.9     $47,141.3     $   490.2     $   358.9      $ 2,717.5

1998:
Protection                  $ 2,073.8     $14,093.6     $   219.5     $    85.5      $ 1,351.4
Asset Gathering                 425.2       4,850.0            --           0.2           19.8
Guaranteed & Structured
Financial Products                8.7      19,366.4          48.4           0.3          121.4
Investment Management              --            --            --            --             --
Corporate & Other               251.0       3,865.0         105.9         800.3          705.3
     Total                  $ 2,758.7     $42,175.0     $   373.8     $   886.3      $ 2,197.9
</TABLE>


                                       52
<PAGE>

                      JOHN HANCOCK FINANCIAL SERVICES, INC.

              SCHEDULE III -- SUPPLEMENTARY INSURANCE INFORMATION -
           (CONTINUED) As of December 31, 2000, 1999 and 1998 and for
                          each of the years then ended
                                  (in millions)

<TABLE>
<CAPTION>
                                                             AMORTIZATION OF
                                             BENEFITS,       DEFERRED POLICY
                                              CLAIMS,      ACQUISITION COSTS,
                                NET         LOSSES, AND     EXCLUDING AMOUNTS          OTHER
                            INVESTMENT      SETTLEMENT     RELATED TO REALIZED       OPERATING
SEGMENT                       INCOME         EXPENSES       INVESTMENT GAINS          EXPENSES

<S>                         <C>              <C>                <C>                  <C>
2000:
Protection                  $  612.1         $  836.1           $   63.3             $  445.2
Asset Gathering                445.8            371.3               78.8                557.4
Guaranteed & Structured
Financial Products           1,743.2          2,125.5                2.6                 79.7
Investment Management           22.7               --                 --                132.7
Corporate & Other              447.6          1,124.2               46.9                381.4
     Total                  $3,271.4         $4,457.1           $  191.6             $1,596.4

1999:
Protection                  $1,107.3         $1,709.4           $   71.8             $  427.3
Asset Gathering                388.6            299.3               53.5                542.1
Guaranteed & Structured
Financial Products           1,681.4          2,130.9                3.1                 88.3
Investment Management           45.9               --                 --                127.2
Corporate & Other              350.8          1,278.8               38.4                227.4
     Total                  $3,574.0         $5,418.4           $  166.8             $1,412.3

1998:
Protection                  $1,063.9         $1,493.8           $  153.9             $  442.4
Asset Gathering                378.0            296.3               46.8                504.9
Guaranteed & Structured
Financial Products           1,576.3          1,411.5                3.7                 92.6
Investment Management           24.1               --                 --                117.8
Corporate & Other              288.4            950.4               45.3                225.3
     Total                  $3,330.7         $4,152.0           $  249.7             $1,383.0
</TABLE>

(1) Unearned premiums and other policy claims and benefits payable are included
in Column C amounts.

(2) Allocations of net investment income and certain operating expenses are
based on a number of assumptions and estimates, and reported operating results
would change by segment if different methods were applied.

See accompanying independent auditors' report.


                                       53
<PAGE>

                      JOHN HANCOCK FINANCIAL SERVICES, INC.

                           SCHEDULE IV -- REINSURANCE
  As of December 31, 2000, 1999 and 1998 and for each of the years then ended:
                                  (in millions)

<TABLE>
<CAPTION>
                                                                                               PERCENTAGE
                                                   CEDED TO        ASSUMED                      OF AMOUNT
                                       GROSS         OTHER       FROM OTHER                    ASSUMED TO
                                      AMOUNT       COMPANIES      COMPANIES    NET AMOUNT         NET
<S>                                 <C>            <C>           <C>           <C>               <C>
2000:
Life insurance in force             $346,720.6     $ 91,827.1    $ 27,489.1    $282,382.6         9.7%
                                ============================================================================

Premiums:
Life insurance                      $  1,818.8     $    227.5    $     23.9    $  1,615.2         1.5%

Accident and health insurance          1,338.6          807.9         441.2         971.9        45.4%
P&C                                         --             --            --            --         0.0%
                                ----------------------------------------------------------------------------
     Total                          $  3,157.4     $  1,035.4    $    465.1    $  2,587.1        18.0%
                                ============================================================================

1999:
Life insurance in force             $380,019.3     $ 83,232.3    $ 29,214.6    $326,001.6         9.0%
                                ============================================================================

Premiums:
Life insurance                      $  2,292.8     $    302.0    $    139.4    $  2,130.2         6.5%
Accident and health insurance          1,142.4          728.5         173.1         587.0        29.5%
P&C                                         --             --           0.3           0.3       100.0%
                                ----------------------------------------------------------------------------
     Total                          $  3,435.2     $  1,030.5    $    312.8    $  2,717.5        11.5%
                                ============================================================================

1998:
Life insurance in force             $324,597.7     $ 88,662.6    $ 29,210.1    $265,145.2        11.0%
                                ============================================================================

Premiums:
Life insurance                      $  1,871.9     $    327.6    $    221.0    $  1,765.3        12.5%

Accident and health insurance            956.5          654.8         130.9         432.6        30.3%
P&C                                        7.1            9.0           1.9            --         0.0%
                                ----------------------------------------------------------------------------
     Total                          $  2,835.5     $    991.4    $    353.8    $  2,197.9        16.1%
                                ============================================================================
</TABLE>

Note: The life insurance caption represents principally premiums from
traditional life insurance and life-contingent immediate annuities and excludes
deposits on investment products and the universal life insurance products
caption represents principally premiums from traditional life insurance and
life-contingent immediate annuities and excludes deposits on investment products
and universal life insurance products.

See accompanying independent auditors' report.


                                       54
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                           JOHN HANCOCK FINANCIAL SERVICES, INC.

                                           By: /s/ Thomas E. Moloney

                                           Thomas E. Moloney
                                           Chief Financial Officer
Date: March 23, 2001

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons in the capacities and on the dates
indicated.

<TABLE>
<CAPTION>
               SIGNATURE                    TITLE                              DATE
               ---------                    -----                              ----
<S>                                  <C>                                     <C>


/s/ Stephen L. Brown
---------------------------------
Stephen L. Brown                     Chairman of the Board and Director      March 23, 2001


/s/ David F. D'Alessandro
---------------------------------
David F. D'Alessandro                President, Chief Executive Officer      March 23, 2001
                                     and Director

/s/ Wayne A. Budd
---------------------------------
Wayne A. Budd                        Executive Vice President, General       March 23, 2001
                                     Counsel and Director

/s/ Samuel W. Bodman
---------------------------------
Samuel W. Bodman                     Director                                March 23, 2001


/s/ I. MacAllister Booth
---------------------------------
I. MacAllister Booth                 Director                                March 23, 2001


/s/ John M. Connors, Jr.
---------------------------------
John M. Connors, Jr.                 Director                                March 23, 2001


/s/ Robert E. Fast, Esq.
---------------------------------
Robert E. Fast, Esq.                 Director                                March 23, 2001


/s/ Dr. Kathleen Foley Feldstein
---------------------------------
Dr. Kathleen Foley Feldstein         Director                                March 23, 2001


/s/ Nelson S. Gifford
---------------------------------
Nelson S. Gifford                    Director                                March 23, 2001


/s/ Michael C. Hawley
---------------------------------
Michael C. Hawley                    Director                                March 23, 2001


/s/ Edward H. Linde
---------------------------------
Edward H. Linde                      Director                                March 23, 2001


/s/ Judith A. McHale
---------------------------------
Judith A. McHale                     Director                                March 23, 2001


/s/ Richard F. Syron
---------------------------------
Richard F. Syron                     Director                                March 23, 2001


/s/ Robert J. Tarr, Jr.
---------------------------------
Robert J. Tarr, Jr.                  Director                                March 23, 2001


/s/ R. Robert Popeo
---------------------------------
R. Robert Popeo                      Director                                March 23, 2001
</TABLE>


                                       55