Manulife Financial Corporation

Manulife reported core EPS up 16% year over year, core earnings up 12%, and core ROE of 16.3%, up 130 basis points. APE sales increased 21% year over year, new business CSM grew 16%, CSM balance grew 20%, and Global WAM net inflows were $0.4 billion. Net income was $2.1 billion, and adjusted book value per share increased 15% year over year to $41.12. Capital remained strong with a LICAT ratio of 136% and a financial leverage ratio of 22.2%. For the LTC reinsurance deal, Manulife said it transfers biometric risk on $3.2 billion of reserves at 80% quota share, with foregone core earnings of CAD 30 million per annum in the first year and a current run rate of LTC claim savings of over 6%. Forwardly, management said Canada insurance experience is expected to trend neutral by year-end, while the new LTC deal is largely capital neutral and should reduce morbidity risk by 24% including prior transactions.

Phil Witherington said the quarter showed disciplined execution and the benefits of a diversified portfolio, with strong growth in Asia and Global WAM alongside continued capital returns. He emphasized strategy execution through distribution, product innovation, and AI adoption, highlighting new leadership appointments and Manulife’s recognition as a leader in AI maturity. On LTC, he framed the new reinsurance structure as another step in derisking the in-force book while preserving asset management economics and long-term earnings capacity.

Colin Simpson highlighted the hard numbers: core EPS up 16%, core earnings up 12%, net income of $2.1 billion, and adjusted book value per share up 15% to $41.12. He pointed to LICAT at 136%, $26 billion in excess of the supervisory target, and leverage of 22.2%, well below the 25% medium-term target. He also noted Global WAM’s 31.2% core EBITDA margin, the return of net inflows, and a 10% increase in corporate results weakness year over year that was driven partly by the retro P&C business, central project spending, and withholding tax accruals.

Analysts focused heavily on the implications of China’s tax and enforcement actions around offshore insurance and wealth flows into Hong Kong. Management said the domestic Hong Kong franchise is the core strength, that MCV sales are not expected to go to zero, and that any short-term effects should be manageable, with demand for Hong Kong products still driven by broader needs such as currency diversification and access to investments. Questions also centered on the LTC reinsurance structure, where management clarified the NAIC ceding commission would be around 6% to 7%, that they retain asset management under ALM, and that the deal should preserve earnings and capital generation from the assets. Analysts pressed on buybacks and ROE; management said the current 2.5% buyback pace is consistent with reaching the 18% ROE goal and does not require an outsized increase.