Q2 2026 Manulife Financial Corp Earnings Call Transcript
Key Points
- Strong APE sales growth of 21% year-over-year, with double-digit growth across all segments, driven by broad-based contributions in Asia.
- Core EPS grew 16% year-over-year, supported by 12% growth in core earnings and continued share buybacks.
- Asia core earnings reached a record level, up 21% year-over-year, led by strong sales and business growth.
- Global WAM returned to net inflows of $0.4 billion, driven by record gross flows and strength in the institutional business.
- Announced a third long-term care reinsurance transaction with Munich Re, reducing LTC morbidity risk by 24% and improving the overall risk profile.
- Maintained a strong capital position with a LICAT ratio of 136% and a leverage ratio well below the medium-term target, supporting continued capital returns.
- Core ROE improved to 16.3%, up 130 basis points from the prior year quarter.
- New business CSM grew 16% year-over-year, contributing to a 20% increase in the CSM balance, positioning for future earnings growth.
- Continued progress in AI initiatives, recognized as the number-one life insurer for AI maturity by Evident for the second consecutive year.
- Canada APE sales grew 23% year-over-year, with strong growth in individual insurance and group insurance, achieving number-one market share in Q1.
- Insurance experience headwinds in Canada and the US, with unfavorable claims experience in Canada group insurance and US life insurance.
- Canada core earnings declined 10% year-over-year due to unfavorable claims and expense experience in group insurance and normal claims variability in individual insurance.
- Global WAM net inflows were partially offset by outflows in North American retirement and retail, with retail outflows driven by active mutual fund redemptions in Canada.
- The long-term care reinsurance transaction has a modest negative cede and foregone core earnings of $30 million per annum in the first year.
- Lower sales in mainland China and other markets in Asia, partially offsetting strong growth in Hong Kong, Singapore, and Japan.
- Market conditions continue to weigh on valuations and returns in certain alternative asset classes, impacting ALDA returns.
- The corporate segment result is expected to be towards the top end of the $300 million to $400 million loss range, driven by central AI investments and a softening P&C retro business.
- Potential regulatory changes in China regarding offshore insurance policies could impact MCV sales, though management expects manageable short-term effects.
- Elevated expenses from transformational investments in Canada are expected to persist to the end of the year.
- The pace of share buybacks is not expected to be boosted by reinsurance transactions, with management guiding to a consistent 2.5% program.
Thank you for standing by. This is the conference operator. Welcome to the Manulife Financial Corporation second-quarter 2026 results conference call. (Operator Instructions) and the conference is being recorded. (Operator Instructions)
I would now like to turn the conference over to Mr. Hung Ko, Global Head of Treasury and Investor Relations. Please go ahead.
Thank you. Welcome to Manulife's earnings conference call to discuss our second-quarter 2026 financial and operating results. Our earnings materials, including the webcast file for today's call, are available in the Investor Relations section of our website at manulife.com.
Before we start, please refer to slide 2 for a caution on forward-looking statements and slide 32 for a note on the non-GAAP and other financial measures used in this presentation. Please note that certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially
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