Manulife Reports First Quarter 2025 Results

TORONTO, May 7, 2025

• Core earnings² of $1.8 billion, a 1% decrease on a constant exchange rate basis³ compared with the first quarter of 2024 ("1Q24")⁴
• Net income attributed to shareholders of $0.5 billion, a decrease of $0.4 billion compared with 1Q24
• Core EPS⁵ of $0.99, up 3%³ from 1Q24⁴. EPS of $0.25, down 48%³ from 1Q24
• Core ROE⁵ of 15.6% and ROE of 3.9%
• LICAT ratio⁶ of 137%
• APE sales up 37%⁷, new business CSM up 31%³ and new business value ("NBV") up 36%⁷ from 1Q24^4,8
• Global Wealth and Asset Management ("Global WAM") net inflows⁷ of $0.5 billion, down from $6.7 billion in 1Q24

"We started the year with continued strong momentum, delivering record levels of insurance new business results this quarter. We generated double-digit growth in new business value across all insurance segments, led by Asia with a 43% increase year over year, demonstrating broad-based strength in our top-line results. Global WAM delivered 24% core earnings growth, expanded core EBITDA margin5 by 290 basis points and generated positive net flows. We also completed our second long-term care reinsurance transaction9, a testament to our focused execution and commitment in delivering sustainable value to shareholders. Overall, I am proud of our performance this quarter against an increasingly volatile operating environment, and our results reflect the strength of the franchise.

"The work we have done since 2017 has put the company in a position of great strength. We could not have transformed the company in such a tangible way without the hard work, disciplined execution, and commitment of our more than 37,000 colleagues across the globe. I couldn't be prouder of what we've accomplished and of the momentum we built, and I look forward to watching Phil Witherington lead the company in writing its next chapter."

— Roy Gori, Manulife President & Chief Executive Officer

"Our underlying business growth remained resilient, while our core EPS growth was dampened by strengthened provisions related to expected credit loss and a provision for the California wildfires. Book value per common share continued to increase steadily in 1Q25, growing 12% year over year. We maintained a strong LICAT ratio of 137%, and our financial leverage ratio5 was 23.9%, well within our medium-term target of 25%. Anchored by our strategic priorities and supported by our robust balance sheet, we are well-positioned to navigate the current economic conditions and capitalize on growth opportunities."

— Colin Simpson, Manulife Chief Financial Officer

Results at a Glance

Results by Segment

Strategic Highlights

We are capitalizing on opportunities and driving growth while optimizing our portfolio 

In Global WAM, we launched FutureStep^TM, a new fully digital retirement plan offering for small businesses in the U.S., in collaboration with Vestwell, a financial technology company. This complements our existing plan offerings and enhances our market presence. It marks a significant step in transforming our retirement business to become the partner of choice for distributors, third-party administrators, and plan sponsors.

In Asia, we renewed our bancassurance partnership in the Philippines with China Banking Corporation ("Chinabank"), extending our exclusive partnership for another 15 years. This strategic partnership, which started in 2007, solidifies the two organizations' shared commitment to provide holistic life, wealth, and health solutions for the long-term financial security of Filipino families.

In addition, we closed the previously announced transaction to reinsure two blocks of in-force business, including a younger block of long-term care, with Reinsurance Group of America. We plan to return the capital released from this transaction through our new share buyback program which commenced in late February 2025.¹⁰

We continue to expand our innovative product portfolio to meet changing customer needs

In Asia, we introduced our Shared Values proposition by offering a first-of-its-kind combination of high-net-worth life insurance with comprehensive health benefits in our International High Net Worth business. The proposition provides access to customer benefits including a whole-body MRI scan, medical second opinion concierge services and critical illness benefits.

In Global WAM, we launched the John Hancock CQS Asset Backed Securities ("ABS") Fund in the U.S., our second retail fund leveraging Manulife | CQS Investment Management expertise. This fund offers exposure to the global ABS market, aiming to generate returns through current income and capital appreciation with a diversified, actively managed portfolio.

In the U.S., we continued enhancing the appeal of our differentiated suite of solutions, including the launch of a new hybrid indexed universal life insurance solution offering more flexible living benefits and a streamlined digital application process.

We are advancing our digital, customer leadership ambition with AI enhancements

In Asia, we further strengthened our GenAI capabilities to enhance sales support and improve customer experience. We rolled out our AI Assistant solution to support agents in Singapore and to help our teams better serve brokers in Japan, enabling faster access to product information, reducing administrative workload and allowing distributors to focus more on customer engagement. 

In Canada, we introduced an innovative GenAI tool within our Individual Insurance business, which enables our internal sales team to automatically generate personalized communications to advisors by analyzing historical data and identifying available opportunities. As a result, interactions between wholesalers and advisors have improved, contributing to an 11% year-over-year increase in the number of advisors placing business with us in 1Q25.

We are helping our customers live longer, healthier, better lives

In the U.S., we became the first life insurer to offer eligible John Hancock Vitality members access to Function Health's technology and screening tools. Function Health includes access to over 100 lab tests – spanning heart, hormone, thyroid, and autoimmunity, among others. This addition builds on our growing portfolio of offerings that help our customers take proactive steps to better understand their health.

In Canada, we further enhanced the Manulife Vitality program with offerings to assist members in meeting their health and wellness goals, including additional resources and incentives for managing and preventing diabetes, the extension of travel rewards to all members, and the addition of ŌURA as our newest Vitality rewards partner.

Strong Global WAM and Asia results contributed to resilient earnings¹¹

Core earnings of $1.8 billion in 1Q25, down 1% from 1Q24

Core earnings decreased modestly on a constant exchange rate basis, as continued business growth in Global WAM and Asia was offset by strengthened provisions related to expected credit loss ("ECL") of $45 million post-tax in 1Q25¹², compared with a net release of $8 million post-tax in 1Q24¹², and a provision for the California wildfires of $43 million post-tax in 1Q25.

• Asia core earnings were up 7%, reflecting continued business growth, improved impact of new business, and favourable claims experience, partially offset by strengthened ECL provisions.
  
  
• Global WAM core earnings grew 24%, primarily driven by higher net fee income from favourable market impacts over the past 12 months and positive net flows, higher performance fees, and continued expense discipline.
  
  
• Canada core earnings increased 3%, primarily driven by overall favourable net insurance experience, and business growth in Group Insurance, partially offset by strengthened ECL provisions and lower Manulife Bank earnings.
  
  
• U.S. core earnings decreased 25%, reflecting lower investment spreads, strengthened ECL provisions, and the net unfavourable impact of the annual review of actuarial methods and assumptions in 2024.
  
  
• Corporate and Other core earnings decreased $46 million, mainly related to a provision for the California wildfires in our Property and Casualty reinsurance business.

Net Income attributed to shareholders of $0.5 billion in 1Q25, $0.4 billion lower compared with 1Q24

The $0.4 billion decrease in net income was driven by a larger net charge from market experience. The net charge from market experience in 1Q25 was primarily related to a $0.7 billion realized loss due to the sale of debt instruments related to the RGA U.S. Reinsurance Transaction, lower-than-expected returns on alternative long-duration assets, mainly related to real estate and private equities, and lower-than-expected returns on public equities. The realized loss due to the sale of debt instruments was offset by an associated change in Other Comprehensive Income, resulting in a neutral impact to book value.

Record levels across all three insurance new business metrics and positive net flows in Global WAM

Continued momentum in our 1Q25 top-line insurance results, as evidenced by the year-over-year growth of 37%, 31% and 36% in APE sales, new business CSM and NBV, respectively

• Asia delivered another strong quarter with record levels of APE sales, new business CSM and NBV, with year-over-year growth of 50%, 38% and 43%, respectively, reflecting higher sales volumes in Hong Kong, Asia Other¹³ and Japan. NBV margin⁷ of 38.1% demonstrated resilience.
  
  
• Canada APE sales increased 9% bolstered by higher sales volumes across all business lines. Coupled with higher margins in Group Insurance, NBV grew 15% compared with 1Q24. New business CSM also increased 30%, driven by higher sales volumes in Individual Insurance and segregated fund products.
  
  
• In the U.S., APE sales and NBV increased 6% and 30%, respectively, reflecting continued demand from affluent customers for accumulation insurance products. New business CSM decreased 3%, primarily driven by product mix, partially offset by higher sales volumes.

Global WAM net inflows of $0.5 billion in 1Q25, compared with net inflows of $6.7 billion in 1Q24

• Retirement net outflows of $2.6 billion in 1Q25 decreased from net inflows of $3.2 billion in 1Q24, reflecting higher retirement plan redemptions and higher net member withdrawals in North America.
  
  
• Retail net inflows of $0.5 billion in 1Q25 decreased from net inflows of $1.7 billion in 1Q24, reflecting higher redemptions due to lower investor demand amid market volatility. This was partially offset by higher money market fund sales and new fund launches in mainland China, as well as higher net sales through our retail wealth platform in Canada.
  
  
• Institutional Asset Management net inflows of $2.6 billion in 1Q25 increased compared with net inflows of $1.8 billion in 1Q24, driven by lower redemptions in fixed income mandates.

Growth in new business continues to drive higher organic CSM and CSM balance

CSM¹⁴ was $22,296 million as at March 31, 2025

CSM increased $169 million compared with December 31, 2024. Organic CSM movement contributed $598 million of the increase for the first quarter of 2025, representing an 11%⁷ growth on an annualized basis, primarily driven by the impact of new business, interest accretion and net favourable insurance experience, partially offset by amortization recognized in core earnings. Inorganic CSM movement was a decrease of $429 million for the same period, primarily driven by the unfavourable impacts of equity market performance and the impact of the RGA U.S. Reinsurance Transaction, partially offset by the favourable impacts of changes in foreign currency exchange rates. Post-tax CSM net of NCI² was $18,524 million as at March 31, 2025.

Earnings Results Conference Call

Manulife will host a conference call and live webcast on its First Quarter 2025 results on May 8, 2025, at 8:00 a.m. (ET). To access the conference call, dial 1-800-806-5484 or 1-416-340-2217 (Passcode: 3499479#). Please call in 15 minutes before the scheduled start time. You will be required to provide your name and organization to the operator. You may access the webcast at https://www.manulife.com/en/investors/results-and-reports.

The archived webcast will be available following the call at the same URL as above. A replay of the call will also be available until June 7, 2025, by dialing 1-800-408-3053 or 1-905-694-9451 (Passcode: 9456881#).

The First Quarter 2025 Statistical Information Package and 2024 New Business Value Report are also available on the Manulife website at https://www.manulife.com/en/investors/results-and-reports.

This earnings news release should be read in conjunction with the Company's First Quarter 2025 Report to Shareholders, including our unaudited interim Consolidated Financial Statements for the three months ended March 31, 2025, prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board, which is available on our website at https://www.manulife.com/en/investors/results-and-reports.html. The Company's 1Q25 MD&A and additional information relating to the Company is available on the SEDAR+ website at http://www.sedarplus.ca and on the U.S. Securities and Exchange Commission's ("SEC") website at http://www.sec.gov.

Any information contained in, or otherwise accessible through, websites mentioned in this news release does not form a part of this document unless it is expressly incorporated by reference.

Media Inquiries
Fiona McLean
(437) 441-7491
fiona_mclean@manulife.com

Investor Relations
Hung Ko
(416) 806-9921
hung_ko@manulife.com 

Earnings

The following table presents net income attributed to shareholders, consisting of core earnings and details of the items excluded from core earnings:

Global Minimum Taxes ("GMT")

On June 20, 2024, the Canadian government passed the Global Minimum Tax Act into law. Canada's GMT is applied retroactively to fiscal periods commencing on or after December 31, 2023. As additional local jurisdictions are expected to enact the GMT in 2025, GMT is now recognized in net income in the reporting segments whose earnings are subject to this tax. GMT is reported in both core earnings and items excluded from core earnings in line with our definition of core earnings in section E3 Non-GAAP and Other Financial Measures of the 1Q25 MD&A.

To improve the comparability of results between 2025 and 2024, we have updated certain 2024 non-GAAP and other financial measures to reflect the impact of GMT, including quarterly core earnings, core ROE, core EPS, financial leverage ratio, adjusted book value per common share, new business value, and post-tax CSM net of NCI. For further information and a complete list of the impacted financial measures, please see section A7 "Global Minimum Taxes (GMT)" of the 1Q25 MD&A, which is incorporated by reference.

Non-GAAP and other financial measures

The Company prepares its Consolidated Financial Statements in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. We use a number of non-GAAP and other financial measures to evaluate overall performance and to assess each of our businesses. This section includes information required by National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure in respect of "specified financial measures" (as defined therein).

Non-GAAP financial measures include core earnings (loss); core earnings available to common shareholders; core earnings before interest, taxes, depreciation and amortization ("core EBITDA"); core expenses; adjusted book value; post-tax contractual service margin; post-tax contractual service margin net of NCI ("post-tax CSM net of NCI"); and core revenue. In addition, non-GAAP financial measures include the following stated on a constant exchange rate ("CER") basis: any of the foregoing non-GAAP financial measures; net income attributed to shareholders; and common shareholders' net income.

Non-GAAP ratios include core return on common shareholders' equity ("core ROE"); diluted core earnings per common share ("core EPS"); expense efficiency ratio; adjusted book value per common share; financial leverage ratio; core EBITDA margin; and percentage growth/decline on a constant exchange rate basis in any of the above non-GAAP financial measures and non-GAAP ratios; net income attributed to shareholders; diluted earnings per common share ("EPS"), CSM, and new business CSM.

Other specified financial measures include  NBV; APE sales; gross flows; net flows; average assets under management and administration ("average AUMA"); NBV margin; and percentage growth/decline in these foregoing specified financial measures. In addition, explanations of the components of the CSM movement, other than the new business CSM were provided in the 1Q25 MD&A.

Non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under GAAP and, therefore, might not be comparable to similar financial measures disclosed by other issuers. Therefore, they should not be considered in isolation or as a substitute for any other financial information prepared in accordance with GAAP. For more information on non-GAAP financial measures, including those referred to above, see the section "Non-GAAP and other financial measures" in our 1Q25 MD&A, which is incorporated by reference.

Reconciliation of core earnings to net income attributed to shareholders – 1Q25
($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Core earnings, CER basis and U.S. dollars – 1Q25
($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Reconciliation of core earnings to net income attributed to shareholders – 4Q24⁽¹⁾
($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Core earnings, CER basis and U.S. dollars – 4Q24
($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Reconciliation of core earnings to net income attributed to shareholders – 1Q24⁽¹⁾
($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Core earnings, CER basis and U.S. dollars – 1Q24
($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Core earnings available to common shareholders⁽¹⁾
($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Core ROE⁽¹⁾
($ millions, unless otherwise stated)

CSM and post-tax CSM information⁽¹⁾
($ millions pre-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)