Manulife Financial ((TSE:MFC)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Manulife Financial’s recent earnings call exuded confidence, revealing a strong performance in 2024. The company highlighted significant achievements in core earnings, digital transformation, and shareholder returns, showcasing its resilience and strategic growth despite challenges such as the global minimum tax and lower returns in the U.S. segment and real estate investments.
Record Core Earnings
Manulife Financial reported record core earnings exceeding $7 billion for the first time, marking a 10% increase from 2023. This milestone underscores the company’s robust financial health and effective growth strategies.
Successful Portfolio Restructuring
The company successfully executed milestone reinsurance transactions, including the largest-ever long-term care reinsurance with Global Atlantic and Canadian universal life reinsurance with RGA. These transactions released $2.8 billion in capital, highlighting Manulife’s strategic financial maneuvers.
Strong Digital Transformation
Manulife’s digital initiatives generated over $600 million in benefits, 3.5 times the level in 2023. The launch of 27 GenAI use cases into production underscores the company’s commitment to innovation and efficiency.
Robust APE Sales and New Business Growth
The company achieved record annual premium equivalent (APE) sales and new business value growth of over 30%, with the highest growth from the Asian market, demonstrating its strong market presence and expansion.
Increased Shareholder Returns
Over $6 billion was returned to shareholders through dividends and buybacks, with a 10% increase in the quarterly dividend, reflecting Manulife’s commitment to delivering shareholder value.
Global WAM Growth
Global Wealth and Asset Management (WAM) achieved positive net inflows of $1.2 billion and a 34% increase in core earnings, indicating strong performance in the asset management sector.
Impact of Global Minimum Tax
The global minimum tax impacted core earnings growth, reducing it by approximately 3 percentage points, a challenge the company is navigating carefully.
Challenges in US Segment
The U.S. segment experienced a 16% decrease in core earnings due to lower investment spreads and impacts from reinsurance transactions, highlighting an area for improvement.
Public Equity and Real Estate Returns
Manulife reported a $113 million charge due to lower-than-expected public equity returns and a $97 million charge from lower returns on commercial real estate investments, indicating challenges in these investment areas.
Forward-Looking Guidance
Manulife’s forward-looking guidance emphasizes continued strategic initiatives and financial metrics. The company aims to maintain strong growth momentum, with Asia and Global WAM contributing to the majority of earnings. Strategic reinsurance transactions and robust digital transformation efforts are set to drive future profitability and efficiency.
In conclusion, Manulife Financial’s earnings call reflected a positive sentiment, highlighting record achievements in core earnings and strong shareholder returns. While challenges exist, particularly in the U.S. segment and certain investment areas, the company remains poised for strategic growth and sustained performance.
