Manulife Financial (NYSE:MFC) used its fourth-quarter and full-year 2025 earnings call to highlight what CEO Phil Witherington described as a “defining year” for the company, marked by record core earnings, strong new business growth under IFRS 17, and continued capital returns. Management also reiterated confidence in its refreshed enterprise strategy introduced in November and said it remains on track toward key 2027 targets, including an 18%+ core return on equity (ROE).
Full-year 2025: Strong new business growth and higher shareholder returns
Witherington said Manulife delivered “strong top-line results,” with new business contractual service margin (CSM) growth exceeding 20% in each insurance segment. He said this contributed to double-digit growth in the company’s CSM balance, supporting future earnings.
Capital and balance sheet: Dividend raised 10% and new buyback program approved
Manulife generated CAD 6.4 billion of remittances in 2025 and returned nearly CAD 5.5 billion of capital to shareholders, Witherington said. The company ended the year with a LICAT ratio of 136% and a financial leverage ratio of 23.9%, which management characterized as providing “significant financial flexibility.”
Manulife announced a 10% increase in its quarterly common share dividend and received approval from OSFI for a new normal course issuer bid (NCIB) to repurchase up to 42 million shares, or about 2.5% of shares outstanding. Witherington said buybacks under the new NCIB are expected to begin in late February 2026, subject to Toronto Stock Exchange approval. Later in the Q&A, Witherington said the company’s intention is to complete the new NCIB in full, while maintaining a “balanced” capital deployment approach that does not constrain organic investment.
CFO Colin Simpson said adjusted book value per share rose 6% year-over-year to CAD 38.27, noting that a strengthening Canadian dollar reduced the growth rate by 3%.
Quarterly results: Core EPS up 9%, but net income impacted by market and hedging items
Simpson said Manulife’s fourth quarter marked its sixth consecutive quarter with new business CSM growth above 20%, driven by favorable business mix and margin improvements. Core EPS increased 9% year-over-year, supported by core earnings growth and share repurchases.
Manulife reported net income of CAD 1.5 billion for the quarter. Simpson said results reflected unfavorable market experience, including a CAD 232 million charge in an “older portfolio” tied primarily to lower-than-expected returns from infrastructure, private equity, and real estate. He also cited a CAD 162 million loss from hedge accounting and effectiveness, attributed mainly to swap spread widening in Canada and, to a lesser extent, derivatives without hedge accounting.
On the insurance side, Simpson said the company generated positive overall insurance experience in the quarter, including a release of PfAD provisions from prior-year events and strong gains in Canada. However, he said insurance experience was less favorable than the prior year due largely to unfavorable U.S. life claims experience. Investment results decreased 5%, primarily due to lower investment spreads.
Business segment highlights: Asia margin expansion; Global WAM outflows; U.S. claims variability
Asia: Simpson said Asia APE sales fell 3% year-over-year, with double-digit growth in Japan and “Asia Other” more than offset by lower sales in Hong Kong. Despite lower volume, Asia delivered strong double-digit growth in new business CSM and new business value (NBV), supported by business mix. Simpson said Asia’s NBV margin increased 5.5 percentage points to 41.2%. Asia core earnings rose 24% year-over-year, helped by business growth and the net favorable impact of a basis change in the prior quarter.
In the Q&A, executive Steve Finch said Hong Kong’s full-year performance was strong, citing full-year sales up 21%, NBV up 31%, new business CSM up 21%, and core earnings up 26%. He attributed the fourth-quarter softness to a difficult comparison and pressure in the broker channel as distributors adjusted to regulatory changes, adding that Manulife saw continued growth in agency and bancassurance channels.
Finch also addressed a sharp year-over-year increase in Hong Kong NBV margin, saying it was driven by mix—particularly lower sales in a lower-margin broker channel—as well as a product shift toward health and protection.
Global WAM: Simpson said Global WAM posted 8% growth in pre-tax core earnings in the quarter, supported by AUMA growth and margin expansion, partly offset by a transition to eMPF in Hong Kong. The segment recorded net outflows of CAD 9.5 billion, driven by several large U.S. retirement plan redemptions, some Canadian retirement outflows, and net outflows in North American retail. Simpson said those were partially offset by strong institutional flows, including contributions from CQS and Comvest.
Gross flows rose 15% to CAD 50 billion, and core EBITDA margin expanded 60 basis points to 29.2%, which management said was strong given the eMPF transition. In the Q&A, executives said the eMPF earnings impact was about halfway reflected in the quarter and reiterated prior guidance. They also said Comvest—closed late in the year—was a positive contributor to flows and core earnings and is tracking in line with expectations, though Manulife did not break out Comvest metrics separately.
Canada: Simpson said Canada posted 2% growth in APE sales and 4% growth in NBV, reflecting strength in individual insurance and annuities, partially offset by lower large-case and group insurance sales. Core earnings increased 6%, driven by favorable individual insurance experience, higher investment spreads, and group insurance business growth, partly offset by less favorable group insurance experience. In the Q&A, management said 2024 group sales included a large “jumbo case,” emphasizing that persistency and in-force premiums remain on a solid trajectory.
U.S.: Simpson said U.S. APE sales rose 9% and new business CSM grew 34%, but core earnings fell 22% year-over-year due to lower investment spreads and unfavorable life insurance claims experience. In the Q&A, U.S. executives said the business operates at the high end of the market with large policies, which can drive quarter-to-quarter mortality variability. They said claims experience improved sequentially from earlier in 2025 and characterized the fourth-quarter outcome as within a “normal range” of variability, not a trend requiring reserve action.
Strategy and investments: Portfolio actions, distribution, and AI initiatives
Witherington outlined progress under Manulife’s refreshed strategy, emphasizing maintaining a diversified business model while investing for “high-quality, sustainable growth.” He cited several strategic moves made in 2025, including the acquisition of Comvest Credit Partners, a joint venture to enter India’s life insurance market, and an agreement to acquire Schroders Indonesia (the latter two subject to regulatory approval). He also noted Manulife became the first international life insurer to establish an office in the Dubai International Financial Centre focused on high-net-worth life insurance solutions.
On customer and distribution initiatives, Witherington highlighted a Hong Kong collaboration with Bupa International, Canada’s offering of access to GRAIL’s Galleri multi-cancer early detection test, the renewal of a bancassurance partnership with China Bank in the Philippines through 2039, enhancements to the Manulife iFunds platform in Singapore using AI-powered analytics, and an expansion of the wholesaling team in the U.S.
On AI, Witherington said Manulife ranked first among global life insurers for AI maturity by Evident and has achieved 30% of its target to generate more than $1 billion of AI enterprise value by 2027. He described AI use cases spanning virtual assistants, underwriting automation, distribution support, and internal engineering tools, and said the company is progressing toward a proprietary “agentic AI platform” to manage AI tools at scale with governance controls.
About Manulife Financial (NYSE:MFC)
Manulife Financial Corporation is a multinational insurance and financial services company headquartered in Toronto, Ontario. Founded in the late 19th century as The Manufacturers Life Insurance Company, Manulife provides a broad range of financial products and services to individual and institutional clients. Its core businesses include life and health insurance, retirement and pension solutions, wealth and asset management, and group benefits.
In wealth and asset management, Manulife operates through Manulife Investment Management and offers mutual funds, segregated funds, institutional asset management, and retirement plan solutions.
