2025-08-07 13:00Financial Data and Key Metrics Changes - Core EPS grew by 2% year-over-year, reflecting strong underlying business growth, though dampened by elevated U.S. mortality and expected credit loss provisions [12][13] - Net income for the quarter was $1.8 billion, an increase of $747 million compared to the prior year, driven by positive market experience [19] - Book value per share increased by 7% year-over-year to $35.78, despite returning over $6.4 billion of capital to shareholders [26][28] Business Line Data and Key Metrics Changes - AP sales increased by 15% year-over-year, with over 30% growth in both Asia and the U.S. [15] - New business CSM grew by 37% and new business value increased by 20% [15] - Global WAM achieved nearly $1 billion in positive net flows, demonstrating strength in institutional and retirement inflows [15][21] Market Data and Key Metrics Changes - Asia segment saw APE increase by 31% year-over-year, with significant contributions from Hong Kong, Mainland China, and Singapore [20] - Canada reported a 34% decrease in APE sales, offset by strong growth in individual insurance [23] - U.S. segment delivered strong AP sales growth of 40%, but core earnings decreased by 53% due to unfavorable mortality experience [25] Company Strategy and Development Direction - The company remains committed to investing in businesses for sustainable growth, with a focus on digital transformation and AI capabilities [7][8] - The acquisition of Comvest Credit Partners aims to enhance private credit capabilities and scale the private markets business [9][10] - A review of the company's strategy is planned to assess potential refreshes for long-term ambitions [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver high-quality sustainable growth despite short-term headwinds [12][28] - The company anticipates continued strong performance in Asia and is optimistic about future growth opportunities [20][23] - Management noted that elevated credit loss provisions are expected to stabilize, with a continued focus on maintaining a strong balance sheet [17][28] Other Important Information - The LICAT ratio remains strong at 136%, providing financial flexibility [28] - The company plans to transition to a new eMPF platform in Hong Kong, which is expected to impact core earnings starting in 2026 [22][23] Q&A Session Summary Question: What other areas may the company want to bulk up in operations? - The company is focused on organic growth opportunities but is also looking for inorganic opportunities that can accelerate growth [37][40] Question: What is the expected impact of the eMPF transition on margins? - The transition is expected to impact margins by approximately 150 basis points, with a recovery anticipated thereafter [44][46] Question: Can you provide details on the Comvest acquisition's accretion? - The acquisition is expected to provide $0.02 to $0.03 of core EPS accretion annually from 2026 onwards [50][52] Question: How does the company view the valuation of the Comvest acquisition? - The company believes the future value created from the acquisition justifies the valuation, highlighting strong growth potential and synergies [67][70] Question: What is the outlook for the U.S. long-term care business? - A triennial review of the long-term care business is expected in Q3, with trends showing utilization losses offset by lower incidents and higher claims terminations [97][99] Question: What drove the recent spike in credit losses? - The spike was primarily due to a few below-investment-grade loans, with the overall portfolio remaining 96% investment grade [110][112]