What is the impact of Mandatory Provident Fund (eMPF) fee changes on GWAM core earnings, and when will offsets be fully realized?

The USD 25 million per quarter impact guidance remains. Most expense actions were taken proactively before the transition, with remaining costs expected to disappear by Q2 FY26. “So most of the expense actions we took were upfront to try and get ahead of it. That's why we've seen such an improvement in our margin, frankly, leading up to the transition. So we are very proactive in terms of not waiting for the transition to happen. So we feel we've taken most of the costs out, except for those that are remaining, which will disappear in Q1.”

Clarify the medical cost inflation assumptions factored into the LTC actuarial review, especially regarding utilization losses.

Utilization losses are due to higher medical inflation. The updated assumption reflects elevated inflation persisting longer before returning to a long-term view that is higher than general inflation expectations. “So as I mentioned, we did reflect that it would -- like the medical cost inflation has come down since its peak, but it's still slightly elevated we would -- we reflected that, that would persist a little longer before returning to our longer-term view. And I think I would leave it with our longer-term view is higher than general inflation expectations.”

Is the strategy refresh due to a new team? How does balanced growth in Canada/U.S. impact share buybacks and the efficiency target?

The refresh is due to an evolving environment, not just a new team. Balanced growth aims to sustain scale and capital generation in North America. Share buybacks remain important, and the sub-45% efficiency ratio target is maintained, supported by AI investments. “Actually, Mario, we're not withdrawing our sub-45% targets when it comes to efficiency ratio. I expect that to be maintained.”

MFC

Manulife (MFC) Q3 FY25 earnings call: guidance and Q&A

Earnings call· Sep 2025 (Q3 FY25)· Financials· Nov 13, 2025

Source: earnings call transcript

Executive summary

Manulife Q3 FY25 — Record Core Earnings and Refreshed Strategy

Manulife delivered strong Q3 FY25 results, marked by record core earnings and robust insurance new business growth, while unveiling a refreshed strategy focused on balanced growth across Asia, Global WAM, Canada, and the U.S. The company aims to leverage AI and strategic partnerships, including a new India JV, to drive sustainable long-term growth and achieve its 2027 financial targets, despite facing net outflows in Global WAM and elevated U.S. claims.

Highlights

Core EPS grew 16% from the prior year, reflecting strong double-digit growth in core earnings and share buybacks.
Record core earnings contributed to a core ROE of 18.1%, expanding 1.5 percentage points year-on-year.
The LICAT ratio remained strong at 138%, providing a $26 billion buffer above the supervisory target ratio.
Adjusted book value per share was up 12% from the prior year quarter to $38.22.
Total new business CSM increased over 20% year-over-year for the fifth consecutive quarter, highlighting future earnings potential.

Concerns

Global WAM experienced net outflows of $6.2 billion, primarily from North American Retail and U.S. retirement channels.
The ALDA portfolio was impacted by a $289 million charge from lower-than-expected returns on private equity, commercial real estate, and timber assets.
U.S. insurance claims experience was unfavorable compared to a favorable prior year, with claims severity remaining somewhat elevated.

Guidance & targets

Category	Target	Timeline	Confidence
Core ROE	18% plus high materiality	FY27 · 2027	High
Remittances	approximately $6 billion high materiality	FY25 · 2025	High
ECL charge	$30 million to $50 million medium materiality	per quarter on average	Medium
Core earnings impact from LTC basis change	modest positive impact low materiality	going forward	High
GWAM flows from infrastructure fund	positive contributor to flows medium materiality	next year · 2026	High
eMPF impact on Retirement business core earnings	reflect an impact medium materiality	Q4 · 2025	High
eMPF fee changes impact	USD 25 million a quarter medium materiality	per quarter	High
CSM amortization increase	approximately $30 million per quarter medium materiality	going forward	High
India JV capital injection	USD 400 million high materiality	next decade	High
Corporate segment result	$300 million to $400 million low materiality	per quarter	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Asia Generated solid growth across all new business metrics despite a very strong prior year comparable, led by strong growth in Asia Other. Hong Kong sales declined year-on-year but generated sequential growth of 4%. Improved product mix drove NBV margin expansion. Benefited from continued business growth momentum, favorable basis change impact, improved insurance experience, and ECL provision release. APE sales: +5% YoYNew business CSM: +18% YoYNew business value: +7% YoYNBV margin: 39% (+2.5 percentage points YoY)Core earnings: +29% YoY	—	—	—	—
Global WAM Delivered record-level core earnings, supported by higher average AUMA and performance fees, as well as continued expense discipline. Net flows were challenged, resulting in outflows from North American Retail ($3.9B) and U.S. retirement ($1.6B), and institutional business ($0.7B). Delivered positive operating leverage and expanded core EBITDA margin. Core earnings: +9% YoYPre-tax core earnings: +19% YoYNet outflows: $6.2BCore EBITDA margin: 30.9% (+310 bps YoY, +80 bps sequentially)	—	—	—	—
Canada Delivered solid results with APE sales growth reflecting continued double-digit growth in individual insurance, primarily due to higher par sales. Individual insurance was the key contributor to new business CSM growth as group insurance does not generate CSM. Core earnings growth driven by higher investment spreads, group insurance growth, and favorable individual insurance experience, partially offset by less favorable group insurance experience. APE sales: +9% YoYNew business CSM: +15% YoYCore earnings: +4% YoY	—	—	—	—
U.S. Delivered strong APE sales growth fueled by higher broad-based demand, leading to more than doubling of new business CSM and significant increase in new business value. Core earnings decreased primarily due to unfavorable life insurance claims experience and lower expected investment earnings, partially offset by ECL provision release and favorable lapse experience. Fundamentals remain strong, with sequential improvement in core earnings. APE sales: +51% YoYNew business CSM: >+100% YoYNew business value: +53% YoYCore earnings: -20% YoY	—	—	—	—

MFC operating KPIs by quarter

MFC operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Jun 2025 Q2 FY25	This call Sep 2025 Q3 FY25	Change vs prior quarter
LICAT ratio	136% Our balance sheet remains strong and provides financial flexibility with a strong LICAT ratio of 136% and a leverage ratio that is well below our 25% target. Source: earnings call transcript	138% Our balance sheet remains strong with a LICAT ratio of 138% and a leverage ratio of 22.7% and we generated another quarter of book value per share growth with an increase of 7% from the prior year while continuing to return a significant amount of capital to shareholders. Source: earnings call transcript	+2 pt
Financial leverage ratio	23.6% Our LICAT capital ratio remained strong at 136%, and our financial leverage ratio was 23.6%, continuing to stay well below our 25% medium-term target. Source: earnings call transcript	22.7% Our balance sheet remains strong with a LICAT ratio of 138% and a leverage ratio of 22.7% and we generated another quarter of book value per share growth with an increase of 7% from the prior year while continuing to return a significant amount of capital to shareholders. Source: earnings call transcript	-0.9 pt

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

Mahindra Agreement to form a joint venture to enter the India insurance market.

Mahindra is a leading conglomerate and existing asset management partner in India. Manulife brings global expertise in insurance, product development, and risk management. Mahindra provides substantial local knowledge, a strong brand, and distribution infrastructure. The move is driven by favorable regulatory and digital environments, economic growth, and increased wealth in India.

Risks & headwinds

Global WAM net outflows Q3 FY25

$6.2 billion

Mitigation:Focus on disciplined growth with proactive expense management, resulting in positive operating leverage and margin expansion. Expect third infrastructure fund to be a positive contributor to flows as money is deployed over the course of next year.

ALDA portfolio underperformance Q3 FY25

$289 million charge

Mitigation:Impacted by lower-than-expected returns on private equity, commercial real estate, and timber assets, reflecting a recent decline in commodity prices. No specific mitigation strategy stated beyond acknowledging the market conditions.

Unfavorable U.S. life insurance claims experience Q3 FY25

Core earnings decreased 20% YoY in U.S. segment.

Mitigation:Fundamentals of the U.S. business remain strong, with sequential improvement in core earnings and continued strong new business metrics. Overall LTC insurance experience was modestly positive, including favorable incidents reported in the CSM.

Elevated medical cost inflation impacting LTC utilization Ongoing

Higher utilization of benefits given the higher cost of care, reflected in actuarial review.

Mitigation:Reflected in updated actuarial assumptions, with elevated inflation expected to persist longer before returning to a higher-than-general inflation long-term view. Partially offset by favorable re-rate experience and assumed future premium rate increases.

What to watch in Q4 FY25

India JV regulatory approval and operational launch

12-18 months from Q3 FY25

Current Agreement reached, subject to regulatory approvals.

Target Regulatory approval and operations commencing.

Why it matters

Marks entry into a significant growth market, crucial for Manulife's long-term strategy and diversification.

I expect it would take in the order of 12 to 18 months to get this operation off the ground and up and running, including the regulatory approval process that you referenced, and I look forward to providing updates along the way.

Find out whether MFC delivers this. Inve re-checks your case every morning.

Q&A highlights

What products will the India JV offer, what does Manulife bring, and what is the regulatory approval timeline?

Manulife brings global insurance expertise, Mahindra brings local knowledge and distribution. Products are TBD. Regulatory approval and operational launch are expected to take 12-18 months.

“I expect it would take in the order of 12 to 18 months to get this operation off the ground and up and running, including the regulatory approval process that you referenced, and I look forward to providing updates along the way.”

asked by John Aiken · answered by Philip Witherington

3 min read 6 chapters

Detailed narrative

Refreshed Enterprise Strategy

Manulife unveiled a refreshed enterprise strategy, building on its strengths with a growth focus and an ambition to be the #1 choice for customers. Key elements include maintaining a diversified portfolio, capturing growth opportunities in Asia and Global WAM, enhancing leadership in Canada, and maintaining a scaled presence in the U.S.

The strategy also emphasizes leveraging early leadership in AI to become an AI-powered organization and utilizing product, digital innovation, and partnerships to become a trusted partner for customer well-being.

India Market Entry

The company announced an agreement with Mahindra, a leading Indian conglomerate and existing asset management partner, to form a joint venture to enter the India insurance market, subject to regulatory approvals. This strategic move is driven by favorable regulatory and digital environments, consistent economic growth, and increased wealth in India.

Manulife will contribute global insurance expertise, including product development and risk management, while Mahindra offers substantial local knowledge, a strong brand, and distribution infrastructure. The operational launch is expected within 12-18 months, with a projected capital cost of USD 400 million over the next decade.

Inforce Management Evolution

Marc Costantini, Global Head of Inforce Management, is departing after over 25 years with Manulife. His role, which included the completion of several monumental reinsurance transactions, has been embedded as a core capability within the organization. Naveed Irshad, President and CEO of Manulife Canada, has taken on expanded responsibility for Inforce Management and reinsurance globally, while continuing to lead the Canada segment.

Actuarial Review & LTC Business

Manulife completed its annual basis change, including a comprehensive triennial review of its U.S. long-term care (LTC) business. This resulted in a net favorable impact of a $605 million decrease in overall pre-tax fulfill and cash flows, comprising a $1.1 billion increase in CSM, partially offset by a modest decrease in net income of $216 million post-tax.

The LTC study was slightly favorable due to favorable re-rate experience, assumed future premium rate increases, and higher terminations, partially offset by higher utilization of benefits driven by elevated medical cost inflation, which is expected to persist longer.

Global WAM Net Outflows

Global WAM experienced net outflows of $6.2 billion in the quarter, following six consecutive quarters of positive net flows. This was primarily due to $3.9 billion in outflows from North American Retail intermediary and wealth channels, and $1.6 billion from the U.S. retirement business, where elevated markets led to higher participant withdrawals.

Institutional business also saw modest net outflows of $0.7 billion. Despite these challenges, GWAM delivered positive operating leverage and expanded its core EBITDA margin by 310 basis points year-on-year to 30.9%.

U.S. Business Strategy Refinement

The U.S. business strategy for John Hancock focuses on scaling its existing profitable behavioral insurance products, which promote health and wellness, to a broader range of customer segments including affluent individuals and emerging high net worth individuals, beyond its current niche in high net worth.

The company is also exploring opportunities in adjacent products that align with its risk appetite, but explicitly stated no intention to return to higher market risk products like variable annuities, which were part of its past broader business.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.