Core Insights - Insurers like Manulife Financial have diversified beyond traditional underwriting by developing wealth and asset management divisions, creating additional growth sources [1] Company Analysis - Manulife Financial is highlighted as an example of an insurer that has successfully expanded its operations beyond traditional insurance, focusing on wealth and asset management [1]

Group 1 - Manulife Financial Corporation has initiated an automatic share repurchase plan to buy back its common shares under a previously announced normal course issuer bid (NCIB) [1] - The actual number of shares repurchased, timing, and price will be influenced by future market conditions [1] - The automatic plan allows for share repurchases even during internal trading blackout periods and in compliance with insider trading rules [1] Group 2 - Manulife is a leading international financial services provider, operating under the name Manulife in Canada, Asia, and Europe, and as John Hancock in the United States [4] - The company had over 37,000 employees and served more than 36 million customers as of the end of 2024 [4] - Manulife trades as 'MFC' on multiple stock exchanges, including Toronto, New York, and the Philippines, and as '945' in Hong Kong [4]

Group 1 - Manulife Financial Corporation is viewed as an interesting company in the life insurance sector due to its strong fundamentals and long-term growth prospects [1] - The company has been analyzed by a fund manager/analyst with over 18 years of experience in the financial markets, indicating a level of expertise in the evaluation [1] Group 2 - No stock, option, or similar derivative positions are held in any of the companies mentioned, indicating an unbiased analysis [2] - The article expresses personal opinions and does not involve compensation from the companies discussed, reinforcing the independence of the analysis [2]

Core Insights - Manulife Financial Corporation (MFC) reported fourth-quarter 2024 core earnings of 74 cents per share, exceeding the Zacks Consensus Estimate by 10.4% and reflecting an 8.8% year-over-year improvement [1] - The company achieved core earnings of $1.4 billion (C$1.9 billion), marking a 6% increase year over year, driven by strong business growth in Global Wealth and Asset Management (WAM), Canada, and Asia [2] - New business value (NBV) for the quarter was $601 million (C$842 million), up 31% year over year, attributed to higher sales volumes across Asia, Canada, and the U.S. [2] - Annualized premium equivalent (APE) sales rose 42% year over year, primarily due to increased sales in Asia and the U.S. [3] - Wealth and asset management assets under management and administration reached $705.6 billion (C$1,015 billion), a 21% increase year over year, with net inflows of $0.8 billion (C$1.2 billion) compared to net outflows of $1.3 billion in the previous year [3] Financial Metrics - Core return on equity improved by 50 basis points year over year to 16.4% [4] - The Life Insurance Capital Adequacy Test ratio stood at 137% as of December 31, 2024, unchanged from the previous year [4] - Adjusted book value per common share increased by 15% year over year to $37.02 [4] Segment Performance - Global Wealth and Asset Management's core earnings were $343 million (C$481 million), up 34% year over year, driven by higher net fee income and positive net flows [5] - The Asia division reported core earnings of $341 million (C$477 million), a 16% year-over-year increase, with significant growth in APE sales, new business CSM, and NBV [6] - The Canada division's core earnings reached $278 million (C$390 million), an 11% increase year over year, supported by favorable insurance experiences and growth in Group Insurance [7] - The U.S. division's core earnings were $210 million (C$294 million), down 16% year over year due to lower investment spreads and impacts from prior reinsurance transactions [8] Dividend Update - The board of directors approved a 10% increase in the quarterly dividend to 44 cents, with shareholders of record as of March 5 set to receive the dividend on March 19 [10]

Fourth Quarter and Full Year 2024 Financial & Operating Results February 20, 2025 Caution regarding forward-looking statements From time to time, Manulife makes written and/or oral forward-looking statements, including in this presentation. In addition, our representatives may make forward-looking statements orally to analysts, investors, the media and others. All such statements are made pursuant to the "safe harbour" provisions of Canadian provincial securities laws and the U.S. Private Securities Litigat ...

Financial Data and Key Metrics Changes - Manulife reported record core earnings exceeding $7 billion for the first time, representing a 10 percentage point increase from 2023 [7][8] - Core EPS grew by 11%, with a potential growth of 14% excluding the impact of global minimum taxes, surpassing the medium-term target of 10% to 12% [21][40] - The core ROE expanded to 16.4%, indicating progress towards the 2027 target of over 18% [22][55] - Adjusted book value per share increased by 15% to $37.02, despite returning over $6 billion to shareholders [52] Business Line Data and Key Metrics Changes - APE sales increased by 42% year-over-year, with Asia leading the growth [35] - New business CSM and new business value in Asia grew by 32% and 31% respectively [35] - Global WAM achieved a 34% increase in core earnings, supported by higher average third-party AUMA exceeding $1 trillion [44] - The Canadian segment saw a 4% increase in APE sales, driven by higher participating life insurance and segregated fund sales [46] Market Data and Key Metrics Changes - Asia segment APE sales surged by 63%, with significant contributions from Hong Kong [43] - Global WAM maintained positive net inflows of $1.2 billion, marking the fifth consecutive quarter of over 20% growth in pre-tax core earnings [38][44] - The US segment experienced a 7% increase in APE sales, although core earnings decreased by 16% due to lower investment spreads [47] Company Strategy and Development Direction - The company aims to become the most digital customer-centric organization in the industry, with significant investments in digital capabilities [11][14] - A new buyback program was announced to repurchase up to 3% of outstanding common shares, reflecting a commitment to returning capital to shareholders [18][50] - The focus remains on sustaining growth in Asia and Global WAM while maintaining market leadership in Canada [30][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic volatility and geopolitical uncertainty, supported by a strong balance sheet [26][23] - The company anticipates continued strong momentum in Asia and Global WAM, with a commitment to investing in these high-potential businesses [30][32] - Management highlighted the importance of disciplined expense management, achieving an efficiency ratio of 44.8% [15][55] Other Important Information - The company executed several milestone transactions, including the largest-ever LTC reinsurance transaction, which is expected to unlock significant shareholder value [10][18] - Record remittances of $7 billion were generated in 2024, benefiting from capital optimization initiatives [49][50] Q&A Session Summary Question: What drove the improvement in the drag? - The improvement was primarily due to better performance in private equity and infrastructure, with expectations for broad improvement across the portfolio [60][61] Question: What is the outlook for the Asia segment? - The Asia segment is expected to maintain mid-teens growth, with the majority of growth coming from normal business activities rather than methodology changes [69][72] Question: Can you discuss the margins in Global WAM? - Global WAM has seen strong margins due to disciplined expense management and access to higher-margin geographies, with expectations for continued growth [88][90] Question: What is the exposure to California wildfires? - The exposure is limited to about $90 million, with expectations that actual losses will be less than half of that amount [96] Question: What are the drivers of earnings on surplus? - The increase in earnings on surplus was driven by favorable currency impacts and fund rebalancing, with expectations for stability going forward [105][107] Question: Why did Manulife not take a write-down in Vietnam? - Manulife's strong in-force portfolio and protective measures in bank assurance partnerships contributed to the decision not to take a write-down [114][115]

Financial Performance - Core earnings for 2024 reached CAD 7.2 billion, an 8% increase from 2023, with Q4 core earnings at CAD 1.9 billion, up 6% year-over-year [3]. - Net income attributable to shareholders for 2024 was CAD 5.4 billion, an increase of CAD 300 million compared to 2023, with Q4 net income at CAD 1.6 billion, relatively stable compared to Q4 2023 [3]. - The core EPS for 2024 was CAD 3.87, an 11% increase from 2023, with Q4 core EPS at CAD 1.03, up 9% year-over-year [3]. - Core earnings for Q4 2024 reached CAD 1,907 million, up from CAD 1,773 million in Q4 2023, representing an increase of 7.5% [29]. - Total core earnings for the full year 2024 were CAD 7,226 million, compared to CAD 6,684 million in 2023, reflecting a growth of 8.1% [29]. - The net income attributable to shareholders for Q4 2024 was CAD 1,638 million, compared to CAD 1,659 million in Q4 2023, showing a slight decrease of 1.3% [29]. - The company reported a market experience loss of CAD 192 million in Q4 2024, compared to a gain of CAD 186 million in Q3 2024 [29]. Capital Management - The company recorded CAD 7 billion in capital repatriation for 2024, compared to CAD 5.5 billion in 2023 [3]. - A total of CAD 3.2 billion was used to repurchase and cancel 4.6% of the issued common shares, equating to over 82 million shares [3]. - The company announced a 10% increase in quarterly common share dividends and initiated a new normal course issuer bid to repurchase up to 3% of issued common shares [3]. Sales and Growth - APE sales for 2024 reached CAD 8.4 billion, a 30% increase from 2023, with Q4 APE sales at CAD 2.2 billion, up 42% year-over-year [6]. - Total inflows for the year were CAD 171.7 billion, a 19% increase from CAD 143.4 billion in 2023, with Q4 inflows at CAD 43.5 billion, up 21% from CAD 35.1 billion [9]. - The company achieved net inflows of CAD 13.3 billion in global wealth and asset management business for 2024, a significant increase from CAD 4.5 billion in 2023 [6]. - The retirement business net inflows for 2024 were CAD 700 million, a significant improvement from a net outflow of CAD 4 billion in 2023, attributed to the absence of large plan redemptions and increased sales of new retirement plans [22]. Operational Efficiency - Core EBITDA margin improved to 28.6% in 2024, up 290 basis points from 25.7% in 2023, reflecting operational efficiency [9]. - The company successfully launched 27 generative AI applications by the end of 2024, with 32 more in development, enhancing customer engagement and operational efficiency [15]. - The overall business performance indicates a consistent growth trajectory, with a focus on improving operational efficiencies and market presence [53]. Regional Performance - In Asia, the Manulife Pro program expanded to Indonesia, Japan, and Hong Kong, resulting in a 23% year-over-year increase in agent APE sales in 2024 [12]. - APE sales in Asia for 2024 grew by 36%, with new business CSM and new business value increasing by 38% and 35% respectively, driven by broad growth across multiple Asian markets [22]. - In Canada, APE sales and new business value increased by 20% and 28% respectively, primarily due to growth in group insurance, participating life insurance, and segregated fund products [22]. - In the U.S., APE sales and new business value grew by 9% and 14% respectively, driven by increased demand for accumulation insurance products [22]. Expenses - Core expenses for Q4 2024 amounted to CAD 1,888 million, an increase from CAD 1,787 million in Q4 2023, representing a growth of 5.7% year-over-year [82]. - Total core expenses for the full year 2024 reached CAD 7,089 million, compared to CAD 6,682 million in 2023, reflecting an increase of 6.1% [82]. - General expenses in the income statement for Q4 2024 were CAD 1,328 million, up from CAD 1,180 million in Q4 2023, marking a 12.6% increase [82]. - Restructuring expenses in Q4 2024 totaled CAD 67 million, compared to CAD 46 million in Q4 2023, indicating a significant increase of 45.7% [82].

Core Viewpoint - Manulife Financial Corporation has appointed Nancy Carroll and John Montalbano to its Board of Directors, effective February 28, 2025, enhancing its governance with experienced professionals in financial services and asset management [1][4]. Group 1: New Board Members - Nancy Carroll has over 40 years of experience as a legal advisor in the insurance and reinsurance sectors, previously serving as a partner at McCarthy Tétrault LLP [2]. - John Montalbano is a seasoned executive in wealth and asset management, formerly the CEO of RBC Global Asset Management and currently the Principal of Tower Beach Capital Ltd [3]. Group 2: Board Contributions - The new board members are expected to provide valuable oversight of Manulife's strategy and operations, with Carroll joining the Audit Committee and Corporate Governance and Nominating Committee, while Montalbano will be part of the Management Resources and Compensation Committee and Risk Committee [4]. Group 3: Company Overview - Manulife Financial Corporation is a leading international financial services provider, operating under the Manulife brand in Canada, Asia, and Europe, and as John Hancock in the United States, serving over 36 million customers globally [5].

Financial Performance - Total core earnings for Q4 2024 reached $1,907 million, an increase from $1,773 million in Q4 2023, representing a growth of 7.5%[43] - Core earnings for Asia in Q4 2024 were $666 million, up from $564 million in Q4 2023, reflecting a growth of 18.1%[43] - The net income attributed to shareholders for the full year 2024 was $5,385 million, compared to $5,103 million in 2023, marking a year-over-year increase of 5.5%[43] - The core EPS for 2024 was reported at $4.00, compared to $3.73 in 2023, indicating a growth of 7.2%[43] - Core earnings available to common shareholders for the full year 2024 reached $6,915 million, compared to $6,381 million in 2023, reflecting a year-over-year growth of 8.4%[73] - Core earnings (post-tax) for 2023 totaled $6,684 million, with contributions from Asia ($2,048 million), Canada ($1,487 million), U.S. ($1,759 million), and WAM and Other ($1,321 million) [53] - The net income attributed to shareholders (post-tax) for 2023 was $5,103 million, with significant items excluded from core earnings resulting in a loss of $1,790 million from market experience [53] - In 4Q24, core earnings (post-tax) were reported at $1,907 million, with contributions from Asia ($666 million), Canada ($390 million), U.S. ($412 million), and WAM and Other ($481 million) [58] - The net income attributed to shareholders (post-tax) for 4Q24 was $1,638 million, reflecting a strong performance despite market experience losses of $192 million [57] - Core earnings (pre-tax) for 2023 reached $7,848 million, indicating a robust operational performance across all regions [54] - The total income (loss) before income taxes for 2023 was $6,452 million, indicating a solid revenue generation capability [53] Segment Performance - The Global Wealth and Asset Management segment reported core earnings of $481 million in Q4 2024, up from $353 million in Q4 2023, a significant increase of 36.3%[43] - The core revenue for Global WAM in Q4 2024 was $2,140 million, compared to $1,842 million in Q4 2023, reflecting a 16.2% increase[80] - Global WAM core earnings (post-tax) for Q4 2024 reached $481 million, up from $353 million in Q4 2023, representing a 36.2% year-over-year increase[79] - New business CSM net of NCI for Asia was $586 million in Q4 2024, compared to $424 million in Q4 2023, reflecting a 38.2% increase[78] Expenses and Charges - The restructuring charge for Q4 2024 was $52 million, compared to $36 million in Q4 2023, reflecting an increase of 44.4%[43] - Core expenses for Q4 2024 were $1,797 million, an increase of 4.7% from $1,725 million in Q4 2023[87] - Total expenses for Q4 2024 reached $1,888 million, up from $1,787 million in Q4 2023, reflecting a year-over-year increase of 5.6%[87] - The restructuring charge in Q4 2024 was $67 million, compared to $46 million in Q4 2023, indicating a significant increase in restructuring efforts[87] - For the full year 2024, core expenses totaled $6,899 million, a 5.3% increase from $6,550 million in 2023[87] - The company reported a total of $7,089 million in expenses for the full year 2024, compared to $6,682 million in 2023, marking an increase of 6.1%[87] Market and Investment Performance - The company experienced market experience losses of $192 million in Q4 2024, compared to gains of $186 million in Q3 2024[43] - The company’s total impact of new insurance business in CSM for Q4 2024 was $(622) million, compared to $2,674 million in Q4 2023, indicating significant volatility in investment performance[82] - Total investment income for the full year 2024 was $20,459 million, up from $19,318 million in 2023, indicating a growth of 5.9%[82] Future Outlook and Strategic Initiatives - The company plans to expand its digital and customer leadership initiatives, which are expected to drive revenue benefits and new business CSM growth[36] - Future outlook remains positive with ongoing investments in new products and technologies aimed at market expansion and enhancing customer engagement [56] - The company anticipates potential future common share repurchases as part of its strategic priorities[90] - Forward-looking statements indicate that the company aims to adapt products and services to changing market conditions[91] - The company emphasizes the importance of maintaining its reputation and financial strength amidst various market risks[93] Capital and Financial Ratios - The LICAT ratio for The Manufacturers Life Insurance Company as of December 31, 2024, was disclosed under regulatory requirements, indicating strong capital adequacy[34] - The adjusted book value as of December 31, 2024, was $63,994 million, an increase from $61,508 million as of September 30, 2024[75] - Core ROE for Q4 2024 was 16.5%, slightly down from 16.6% in Q3 2024 but up from 15.7% in Q2 2024[73] - The CSM, net of NCI, as of December 31, 2024, was $22,127 million, an increase from $20,930 million as of September 30, 2024[74]

Core Points - Manulife Financial Corporation has filed its 2024 audited annual financial statements and related MD&A with securities regulators, including the Canadian Securities Administrators and the U.S. Securities and Exchange Commission [1] - The financial information is accessible on the company's website, and shareholders can request a hard copy free of charge [1] Company Overview - Manulife Financial Corporation is a leading international financial services provider headquartered in Toronto, Canada, offering financial advice and insurance [2] - The company operates as Manulife in Canada, Asia, and Europe, and primarily as John Hancock in the United States [2] - As of the end of 2023, Manulife had over 38,000 employees, more than 98,000 agents, and thousands of distribution partners, serving over 35 million customers [2] - The company trades as 'MFC' on the Toronto, New York, and Philippine stock exchanges, and under '945' in Hong Kong [2]