MFC

It has been about a month since the last earnings report for Manulife Financial (MFC). Shares have added about 0% in that time frame, underperforming the S&P 500. Will the recent trend continue leading up to its next earnings release, or is Manulife due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers. MFC Q2 Earnings Beat on Asia Growth and Strong Insurance SalesManulife Financial Corporation reported second-quarter 2026 core earnings of 79 cents per share, which beat the Zacks Consensus Estimate by 1.3%. The bottom line increased 16% year over year. Revenues of $7.83 billion surpassed the consensus estimate of $7.42 billion by 5.4%.Results benefited from business growth in Asia and Global Wealth and Asset Management, along with a lower expected credit loss charge. Annualized premium equivalent sales increased 21%, while new business contractual service margin and new business value rose 16% and 10%, respectively. Core earnings were C$1.92 billion ($1.38 billion), up 12% year over year. The improvement reflected continued growth in Asia, higher Global WAM earnings and the net positive impact of updates to actuarial methods and assumptions made in 2025.The increase was partly offset by unfavorable insurance experience in Canada and Asia, lower U.S. investment spreads and the effect of the eMPF transition in Hong Kong. Net income attributed to shareholders increased C$321 million to C$2.11 billion, aided by favorable market experience.Core return on equity expanded 130 basis points year over year to 16.3%. The expense efficiency ratio improved 100 basis points year over year to 44.5%, indicating positive operating leverage during the quarter. APE sales advanced 21% year over year to C$2.70 billion ($1.95 billion). Asia remained the largest contributor, with sales rising to C$2.07 billion from C$1.71 billion. Canada APE sales increased 23% year over year to C$426 million ($307.69 million).New business CSM increased 16% year over year to C$1.02 billion ($0.7 billion). This measure represents the expected future profit from new insurance contracts. New business value climbed 10% year over year to C$929 million ($671 million), highlighting broad-based momentum across the insurance portfolio.The CSM balance, net of non-controlling interests, reached C$27.26 billion as of June 30, 2026. Annualized organic CSM growth was 10%, supported by new business contributions, interest accretion and insurance experience. Asia core earnings increased 21% year over year to $616 million. APE sales advanced 21%, new business CSM rose 17%, and new business value improved 13%, led by growth in Hong Kong, Singapore and Japan. Changes in business mix moderated growth in profitability metrics relative to sales.U.S. core earnings jumped 55% year over year to $218 million. Improved claims experience in life insurance and long-term care, along with a lower expected credit loss charge, more than offset weaker investment spreads. APE sales rose 12%, though new business CSM declined 1% because of product mix.Canada core earnings fell 10% year over year to C$379 million ($273.74 million). Unfavorable claims experience and higher Group Insurance expenses weighed on results, partly offset by actuarial assumption benefits, higher investment spreads and an expected credit loss provision release. Global WAM core earnings increased 9% year over year to C$505 million ($364.75 million). Higher average assets under management and administration and contributions from the Comvest acquisition supported the increase. These benefits were partly offset by the eMPF transition and expenses associated with business growth.Average AUMA rose 15% year over year to C$1.16 trillion. The core EBITDA margin expanded 110 basis points to 31.2%, reflecting improved operating economics.Global WAM generated net inflows of C$0.4 billion. Institutional inflows of C$6.7 billion, including contributions from CQS and Comvest, offset retirement outflows of C$4.9 billion and retail outflows of C$1.4 billion. Manulife ended the quarter with a Life Insurance Capital Adequacy Test ratio of 136%, unchanged from the year-ago period. Its financial leverage ratio declined 140 basis points to 22.2%, remaining below the company’s medium-term target of 25%.Book value per common share increased 10% to C$27.48. Adjusted book value per share rose 15% to C$41.12, including a CSM balance per share of C$13.64.The company returned C$1.4 billion to shareholders during the quarter through C$0.8 billion of common share dividends and C$0.6 billion of share repurchases. It also announced a long-term care reinsurance transaction that is expected to reduce its cumulative long-term care risk by 24% upon closing. In the past month, investors have witnessed a flat trend in estimates revision. At this time, Manulife has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Manulife has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Manulife belongs to the Zacks Insurance - Life Insurance industry. Another stock from the same industry, Voya Financial (VOYA), has gained 3.3% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. Voya reported revenues of $269 million in the last reported quarter, representing a year-over-year change of -24.4%. EPS of $1.51 for the same period compares with $2.40 a year ago. For the current quarter, Voya is expected to post earnings of $2.65 per share, indicating a change of +8.2% from the year-ago quarter. The Zacks Consensus Estimate has changed +2.6% over the last 30 days. Voya has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Manulife Financial Corp (MFC) : Free Stock Analysis Report Voya Financial, Inc. (VOYA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 8 a.m. ET Global Head of Treasury and Investor Relations - Hung Ko President and Chief Executive Officer - Philip Witherington Chief Financial Officer - Colin Simpson President and CEO of Manulife Canada - Patrick Graham Chief AI Officer - Jodie Wallis Operator: Thank you for standing by. This is the conference operator. Welcome to the Manulife Financial Corporation Second Quarter 2026 Results Conference Call. [Operator Instructions] 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. Hung Ko: 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 slide 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 from what is stated. Turning to Slide 4. We'll begin today's presentation with Phil Witherington, our President and Chief Executive Officer, who will provide a highlight of our second quarter 2026 results, a strategic update and an overview of our latest long-term care reinsurance transaction. Following Phil, Colin Simpson, our Chief Financial Officer, will discuss the company's financial and operating results in more detail. After their prepared remarks, we'll move to the live Q&A portion of the call. With that, I'd like to turn the call over to Phil. Philip Witherington: Thanks, Hung, and thank you, everyone, for joining us today. Before we begin, I'd like to take a moment to recognize and welcome the newest members of our executive leadership team that we announced in May. Patrick Graham has assumed the role of President and CEO of Manulife Canada. Patrick previously led our Hong Kong and Macau business and brings deep expertise across both distribution and health that will help accelerate our Canada growth strategy. I'd also like to congratulate Jodie Wallis on her expanded mandate as Chief AI Officer, which now spans both AI and enterprise data. Jodie remains instrumental in driving responsible AI adoption at scale to support growth, improve efficiency and enhance customer experience, and her appointment to the executive leadership team further reflects the importance of this work across our enterprise. In addition, Stephanie Fadous and Shamus Weiland have taken on broader responsibilities. These important leadership changes further strengthen our team, both at the enterprise level and in our key markets, and I'm confident they position us to deliver on our strategic priorities and drive sustainable growth. I'll now provide an overview of our second quarter financial performance before turning to the stand-alone long-term care reinsurance transaction we just announced. Let's start on Slide 6. We delivered strong results this quarter, demonstrating disciplined execution and the benefits of our diversified portfolio. Our insurance businesses generated strong top line results with APE sales growth of 21% year-over-year, supported by double-digit growth across all segments. APE sales momentum remained strong in Asia, which was driven by broad-based contributions from key markets such as Hong Kong, Singapore and Japan and was supported by our high-quality agency force, which I will discuss further momentarily. Growth in overall sales drove a double-digit increase in value metrics, including year-over-year new business CSM growth of 16%. This contributed to CSM balance growth of 20%, positioning us well for future earnings generation. In Global WAM, record gross flows supported net inflows of $0.4 billion this quarter. Net inflows were driven by strength in our institutional business, including continued contributions from CQS and Comvest. In terms of profitability, core EPS grew 16%, reflecting 12% growth in core earnings and the benefits of continued share buybacks. This strong result was led by Asia, where core earnings grew 21% from the prior year to a record level as well as Global WAM, where core earnings increased 9% despite the impact of the transition to eMPF. While we saw some insurance experience headwinds in Canada and the U.S., the overall results reflect the strength and resilience of our diversified business. And we delivered a solid core ROE of 16.3%, up 130 basis points from the prior year quarter. Turning to our balance sheet. We maintained a strong capital position with a LICAT ratio of 136% and a leverage ratio well below our medium-term target, providing us with substantial financial flexibility and supporting continued return on capital to shareholders through dividends and share buybacks. Turning to Slide 7. We continue to make strong progress in the execution of our strategy, which is underpinned by our ambition to be the #1 choice for customers. Our distribution capabilities and product innovation remain important differentiators positioning us to meet evolving customer needs. In Asia, we achieved a 9% year-over-year increase in Million Dollar Round Table members, the highest increase among the top 10 multinational insurers, reflecting continued progress in scaling our high-quality agency force. In fact, APE sales per active agent increased over 30% year-over-year in the second quarter. This speaks to the effective execution of our agency strategy, including efforts to enhance the quality of our agency force through Manulife Business Academy training programs, AI-enabled capability building and broader adviser excellence initiatives. In addition, we expanded our global high net worth offerings with 2 innovative insurance solutions that address the evolving wealth protection and legacy planning landscape. This includes the introduction of an insurance savings solution that uniquely combines the benefits of our participating life products with investment diversification through a Manulife CQS strategy, further differentiating our value proposition to high net worth individuals. In Global WAM, we expanded our ETF-based offerings for North American retail customers. And in the U.S., we enhanced our variable universal life offering, broadening the reach of our life insurance solutions while delivering greater protection, flexibility and long-term value. Being an AI-powered organization is a key priority within our refreshed strategy and our continued innovation and industry recognition reflect the meaningful progress that we're making across the enterprise. We are proud to be recognized by Evident as the #1 life insurer for AI maturity for the second consecutive year, ranking first in North America and top 3 overall among 30 major insurers across North America and Europe. We were also recognized for our AI-enabled underwriting capabilities in Canada and named the Model Insurer for Data, Analytics & AI by Celent. And in Global WAM, we launched new scalable Agentic AI solutions. The portfolio of solutions includes document intelligence readers and knowledge assistants, which are enhancing customer experience while driving greater operational efficiency. Finally, the rollout of our enterprise AI platform continues, providing our AI developers and data scientists with a scalable and secure foundation to design, build and govern AI responsibly. It allows us to reuse capabilities across businesses and markets, accelerating delivery and reducing duplication. This platform lays the foundation for accelerated development and AI value generation. Overall, these achievements and the recognition we've received underscore the meaningful progress that Jodie and the team have made embedding AI across our organization. Similarly, we're proud of our longevity leadership, where we're helping customers achieve better health and wealth outcomes across their lifespan while driving sustainable growth for our business. In collaboration with the MIT AgeLab, our U.S. insurance and retirement businesses launched a first-of-its-kind longevity preparedness tool, helping customers assess and improve their readiness for living longer, healthier and better lives. We also enhanced our health and wellness offerings for eligible Canada Group Retirement and private wealth customers through preferred rate access to select health and wellness solutions. And in Hong Kong, we're providing customers with greater health care options, quadrupling our medical specialist network to more than 900 providers through our strategic partnership with Bupa. Collectively, these achievements highlight the meaningful impact that we're making to empower customer health, wealth and longevity. Before I turn it over to Colin, I'd like to discuss the long-term care reinsurance agreement with Munich Re that we just announced, which is our third long-term care transaction within the past 3 years. A couple of elements of this transaction differentiate it from our prior deals. First, it is a full risk transfer of biometric risk on $3.2 billion of reserves at 80% quota share. And second, it is a stand-alone long-term care block. The pricing is similar to our previous transactions with a modest negative cede, further reinforcing the robustness of our reserves and assumptions. The transacted block is an older vintage but has richer benefits, including greater lifetime benefits and policyholder inflation protection compared with our retained book. Inclusive of prior transactions, we will have reduced LTC morbidity risk by 24%, significantly improving our overall risk profile. The impact to capital is expected to be largely neutral as the benefit from reducing morbidity risk required capital is offset by the release of the associated risk adjustment and the ceding commission. Unlike our previous deals, there is no capital benefit from the disposal of investments as no assets are being transferred. Foregone core earnings is relatively immaterial at CAD 30 million per annum in the first year, and that will reduce over time as the block runs off. More broadly, this transaction demonstrates how we're continuing to derisk our in-force portfolio through innovative actions. Looking ahead, we continue to focus on improving our long-term care portfolio through organic initiatives that will enhance risk-adjusted returns and drive shareholder value. For example, our long-term care transformation program is focused on helping customers remain healthier and more independent for longer and reducing fraud through enhanced claims management. The program is already generating strong results with current run rate LTC claim savings of over 6%, which also helped contribute to the attractiveness of the transacted block. In closing, I am pleased with our performance this quarter and delighted to have delivered a third long-term care in-force reinsurance transaction. We continue to execute on our strategy, innovate across our diversified business, drive sustainable growth and deliver insights and solutions to help our customers across their life spans and for generations to come. With that, I'll hand it over to Colin to discuss our quarterly results in more detail. Colin? Colin Simpson: Thanks, Phil, and good morning, everyone. This quarter, we delivered strong results, underscoring our continued focus on high-quality growth and value creation. Before opening the line to questions, I'll walk you through our results. Let's begin on Slide 10 to discuss our top line. We delivered strong APE sales growth underpinned by double-digit increases across all insurance segments, including over 20% in both Canada and Asia. This momentum translated into double-digit growth in value metrics with new business CSM increasing 16% year-over-year. In Global WAM, net inflows of $0.4 billion reflected strength in our institutional business, partially offset by outflows in retirement and to a lesser extent, retail, which I will expand on shortly. Turning to Slide 11. I'll walk you through the key drivers of our earnings this quarter compared with the second quarter of 2025. Our higher net insurance service result was driven by continued growth in Asia as well as the net positive impact of last year's actuarial assumption review. This was partially offset by insurance experience, including unfavorable experience in Canada compared to net favorable experience in the prior year, partially mitigated by much improved but still negative claims experience in U.S. Life. I will provide more detail on the insurance experience in Canada and the U.S. momentarily. Moving down the DOE table, our core net investment result increased 10%, primarily driven by a lower charge in the expected credit loss provision, or ECL, partially offset by lower investment spreads in the U.S. Lastly, Global WAM generated 10% growth in pretax earnings. On to Slide 12. And as Phil mentioned at the top of the call, core EPS increased 16% year-over-year, driven by strong core earnings growth and ongoing share buybacks. This quarter, we generated net income of $2.1 billion, exceeding core earnings as higher-than-expected returns on public equities more than offset lower-than-expected returns on ALDA. As we've seen across the industry, market conditions continue to weigh on valuations and returns in certain alternative asset classes. Moving on to the results by segment. We'll start with Asia on Slide 13. APE sales increased 21% from the prior year, driven by double-digit growth in Hong Kong, Singapore and Japan, partially offset by lower sales in Mainland China and other markets. The strong sales reflects double-digit growth across agency, banker and other third-party sales, demonstrating the strength of our diversified multichannel distribution network. It also drove strength in our value metrics, though this was partially offset by changes in business mix. In Hong Kong, APE sales growth of 37% year-on-year reflected higher sales of savings products across all channels. This performance reflects the breadth of our franchise with our domestic customer base driving the majority of sales this quarter and remaining a core strength of our business. With regards to core earnings, Asia delivered another quarter of strong results. Year-over-year, core earnings increased 21%, driven by continued business growth and the net favorable impact of last year's basis change, partially offset by less favorable insurance experience. Now moving on to Global WAM on Slide 14. We were encouraged to see a return to net inflows this quarter, driven by strength in our institutional business, including continued contributions from CQS and Comvest and supported by another quarter of record gross flows. This positive result was partially offset by outflows in North American Retirement and retail, though we did see continued momentum across Canada Wealth and Asia more broadly. In the retirement channel, outflows reflected higher plan sponsor redemptions and increased net member withdrawals due to higher account balances from market appreciation. Retail outflows were primarily driven by active mutual fund redemptions through third-party intermediaries in Canada, although trends improved on a sequential basis. Even as we continue to navigate pressures in certain areas of the business, this quarter's positive net flow result reflects the strength and resilience of our diversified platform. We generated solid core earnings growth of 9% from the prior year, driven by higher average AUMA and contributions from the Comvest acquisition, partially offset by the impact of the eMPF transition in Hong Kong and higher expenses due to business growth. These factors also supported our core EBITDA margin reaching 31.2%, expanding 110 basis points from the prior year. Next, turning to Canada on Slide 15. This quarter, APE sales increased 23% year-over-year, reflecting growth across all lines of business, led by higher large case sales within group insurance and continued strong participating life sales within our individual business. This, along with increased margins in individual insurance and annuities, drove strong growth of 29% in new business CSM, while new business value was largely flat due to lower margins and product mix changes in group benefits. Core earnings declined 10% year-over-year, mainly due to unfavorable claims and expense experience within group insurance as well as normal claims variability in individual insurance. Relative to the first quarter of 2026, overall insurance experience improved modestly, reflecting the impact of the actions we are taking in group benefits, though this was partially offset by the unfavorable claims experience in individual insurance. We now expect overall Canada insurance experience to trend neutral by the end of the year as our group benefit case managers help members return to work, although elevated expenses from our transformational investments should persist to the end of the year. Lastly, let's discuss our U.S. segment's results on Slide 16. APE sales grew 12% year-over-year, supported by product enhancements and distribution expansion initiatives, while growth in our value metrics was impacted by product mix. Core earnings rebounded year-over-year, reflecting improved claims experience in both life and LTC as well as a lower ECL provision charge, partially offset by lower investment spreads. While life claims experience was unfavorable this quarter, it improved meaningfully from the prior year. We view the result as being within the normal range of variability and when considered alongside the gain in the first quarter of 2026 is close to neutral on a year-to-date basis. LTC experience was once again favorable across both the P&L and CSM. Turning to Slide 17. Our adjusted book value per share continued to grow, increasing 15% year-over-year to $41.12. We achieved this growth while returning $5.3 billion of capital to shareholders over the past 12 months. For the stand-alone quarter, we returned $1.4 billion to shareholders through a combination of dividends and share buybacks underpinned by our continued strong cash generation. Let's now turn to our balance sheet on Slide 18. Our capital position remains strong with a LICAT ratio of 136%, representing $26 billion in excess of our supervisory target ratio. Our financial leverage ratio of 22.2% remains well below our medium-term target of 25%. Together, these metrics highlight the robustness of our balance sheet and the strength of our capital position, providing significant financial flexibility and positioning us well for the future. To close, Slide 19 highlights our progress against our 2027 and medium-term targets. We're pleased with the progress we have made towards our financial targets, underpinned by strong results from 2 of our high-growth businesses, Asia and Global WAM. While there is more to do to achieve our core ROE target, this quarter saw a 130 basis point increase compared to the prior year quarter. We remain committed to delivering against our targets, while at the same time, further improving our risk profile as evidenced by the stand-alone LTC reinsurance transaction, another milestone for Manulife. This concludes our prepared remarks. Before we move to the Q&A session, I would like to remind each participant to adhere to a limit of 2 questions, including follow-ups and to requeue if they have additional questions. Operator, we will now open the call to questions. Operator: [Operator Instructions] Our first question comes from John Aiken with Jefferies. John Aiken: I know it's early days, but I was wondering if you could give us your thoughts on the Chinese government's tax on offshore insurance policies, how that may affect your business in the region? Steven Finch: Thanks, John. It's Steve Finch here. I'll take that question. I'll start with taking a step back and to sort of frame the size of the business with respect to MCV business. Manulife has a diversified business in Hong Kong. And our core strength is our domestic franchise, which represents about 75% of sales year-to-date. So MCV is an important part of the business at 25%. It can vary from period to period. As you note, it's early to comment on the implications of some of the recent news. The point that you raised about tax treatment of offshore trusts. There's been press even more recently on enforcement of existing rules, which I think is really important. There haven't been updated tax laws, but there is focus on potential enforcement of existing rules. That's pretty common to see as markets develop. My expectation is that as guidance gets more clear, it could actually provide more clarity, remove ambiguity and actually help support the development of this business over time. And I want to make a key point. We expect that the structural trend of Mainland Chinese customers accessing Hong Kong for products and services to continue. There's a lot of reasons why that's being done, currency diversification, access to different underlying investments that they can get onshore, the benefits and services that they can access in Hong Kong. And in my time in the role, I haven't heard tax benefits as the primary reason that's driving this business. John Aiken: Yes. Thanks, Steve. Just to paraphrase to make sure I got this straight. So basically, you're expecting some changes, but this is not destroying the outlook for the business. Steven Finch: Yes, absolutely not destroying the outlook. I have confidence as we look to the future, this part of the business is going to continue to be a strength of Hong Kong. Could there be short-term implications? Really too early to say. We'll have to track it closely and see how this evolves over time. Operator: Our next question comes from Tom Gallagher with Evercore ISI. Thomas Gallagher: So Steve, just one quick follow-up on that. The -- so you said 25% are MCV sales within Hong Kong, and I think Hong Kong is 40% of Asia. So if sales went to 0, on that part of the business, it would be a 10% hit to total Asia, but it sounds like you think -- obviously, that doesn't sound like you think it's going to go to 0. There might be a hit, but it would be -- you'd probably be able to restructure transition it somehow. Is that a fair way to frame it? Steven Finch: Yes, and I'll expand a bit. I do not expect these sales to go to 0, not even -- not in the short term at all. And as we look out into the future, continue to -- as I said, I continue to have confidence that this is going to be an important part of the Hong Kong insurance business and for Manulife. Any short-term impacts will be manageable, won't impact core earnings over the immediate future. So continue to have confidence in this business going forward. Thomas Gallagher: Okay. And for my follow-up, just on the long-term care deal, I heard the 5% negative cede on IFRS. What was it on U.S. statutory, the negative cede? And can you also just give a little color for the retaining the asset risk? Like what was behind that? Would it have been too punitive? Had you transferred the asset risk? Or were the other reasons you maintain the asset risk? Stephanie Fadous: Thanks, Thomas. It's Stephanie here. So on an NAIC basis, the ceding commission would have been around 6% to 7%. Our IFRS reserve in this block are higher than the statutory reserve. In terms of color on the transaction, so we're quite pleased to have transacted in this new innovative structure, where we basically cede the biometric risk or exchange variable cash flows for fixed cash flows, but we retain the asset management. And what that does is that we retain the earnings potential and the assets supporting the portfolio as well as the capital generation on the assets as the block matures over time. Operator: Our next question comes from Gabriel Dechaine with National Bank. Gabriel Dechaine: Just another question on the Asia sales outlook, the Hong Kong sales outlook more specifically because the Chinese regulators don't look to be just going after or forcing existing rules on MCV sales. It looks like they're -- the tax authorities are broadening their search for unpaid taxes essentially on gains on offshore investments. I'm wondering if there's any implications at all? Maybe there's not because the structure of the products are entirely different and unaffected. But your offshore high net worth business, which is also managed out of Hong Kong, I believe, I appreciate it's not entirely sold to wealthy Chinese individuals, but there may be some implications there, if you care to comment? Steven Finch: And Gabe, it's Steve. Can I clarify the -- when you say the offshore high net worth, are you referring to our Bermuda international high net worth? Or I mean the comments that I made in terms of Hong Kong encompass all the Hong Kong business, so whether it's high net worth, whatever channel it's coming through. Gabriel Dechaine: The sales that are -- sales and earnings, if you look in your Asia segment, I think it's only on an annual basis. There's an other category that includes the smaller other Asia businesses plus the offshore high net worth business? Steven Finch: Yes. The international high net worth that we disclosed is our Bermuda business. Bermuda business, high net worth, yes, there are -- we do have some China national sales that go through that business. Last year, our APE was a little bit over $150 million. And the China portion of that is a little bit under 10%. Gabriel Dechaine: Okay. Right. So nothing. Okay. Great. I'm wondering -- okay, so this LTC deal, which I think is a positive news. So just so I understand, there's no planned reduction to the assets, like notably the ALDA portfolio that was partially backing these LTC blocks. And I'd like to pivot more to the future outlook. You talked about putting more emphasis on the organic management strategies for that block of business. And just wondering if that's a deliberate risk management strategy because you do benefit from higher mortality rates in that business, whereas your U.S. Life block is still generating some mortality losses here so they offset each other. Trevor Kreel: Gabe, it's Trevor. Thanks for the question. I'll start and then turn it over to Phil. So in terms of the asset strategy, so for the assets backing the reserves involved in this block, we do manage them within our broader ALM framework, and we don't have any current plans to change the investment strategy. Philip Witherington: Great. Thank you, Trevor, and thanks, Gabe, for the question. This is Phil. So when we look to the future on long-term care, we -- our primary basis for management of the portfolio going forward, it will be the organic management actions that we're taking. And there are various things that we're doing, and I talked earlier in my remarks about the LTC customer care program. That has delivered a 6% reduction in claims through various initiatives, including reduction in fraud, waste and abuse. And you'll have heard over the years the progress that we've made on premium re-rates that has proved to be a highly effective mechanism to mitigate variability in claims experience over time. So when I reflect on what the best thing to do for Manulife shareholders is, I think it's important to -- now that we've demonstrated our ability to transact across various structures, an older block, a younger block and over the past 24 hours, a biometric risk transfer, I think the logical thing to do is to make that pivot to organic management while retaining the strategic flexibility to transact if that makes most sense in a particular point in time. One supplement, and that is -- and Stephanie touched on this earlier in response to an earlier question, that's relating to how we preserve the benefits for Manulife and Manulife shareholders. By pursuing the third transaction on a biometric risk-only basis, we do preserve the benefits of managing the asset portfolio for Manulife shareholders. And that's actually important when you reflect on our strategy. One thing we said in our strategy that we released in November last year is that sustaining the scale of our U.S. business is important. And this structure where we retain management of the asset portfolio, along with yield opportunity and ongoing capital generation as the block matures, it helps fulfill that objective of sustaining earnings and balance sheet scale of our U.S. segment. Operator: Our next question comes from Paul Holden with CIBC. Paul Holden: So continuing with the long-term care reinsurance deal. So I think you hit on an important point, the capital generation associated with that business. And I think it's been maybe a little bit of time since you kind of gave an update on the capital generation. Maybe some thoughts there to help us think through it as it pertains to this block, but I think more importantly, as it pertains to the retained block as well. When do IFRS reserves start coming down? When does stat reserves start coming down? And when does the capital start flowing back to shareholders? Philip Witherington: Thanks, Paul. I think Stephanie is best placed to answer that one. Stephanie Fadous: Thank you, Paul, for the question. So on the remaining block, which is slightly younger, but still quite a number of years of experience and was issued a number of years ago, we expect the block to be relatively stable and start declining in the next 5 to 10 years. And I would expect the capital, both IFRS and statutory to start releasing generating capital at the same time. Paul Holden: Okay. And given the insured or the reinsured block, you just -- there is a few years younger than a few years earlier. Is that an easy assumption to make? Stephanie Fadous: The reinsured block for this transaction was a more mature block of business with richer benefits. And as the block matures, we'll have the capital generation on the assets that we've retained, and that will be a little quicker than the remaining block. Paul Holden: Yes. Okay. Okay. Next question kind of changed the topic is on the Canadian insurance business, very strong individual insurance sales for the second consecutive quarter. So 20% this quarter, I think somewhere around the same ballpark last quarter, a little bit higher. Maybe talk about -- I know you have renewed and reinvigorated growth strategy there. So talk about the success you're having in those sales, what kind of products are coming from distribution channel and sustainability and that type of growth rate? Patrick David Graham: Paul, it's Patrick here. Thanks for the question. So first, let me say how excited I am to be here and working with the Canadian team to drive our shared ambition of being the undisputed leader in insurance in the market. And I think your question speaks nicely to that shared vision and ambition. So as you referenced, we've done very well in individual insurance sales, achieving #1 market share in Q1, largely driven off the back of our successful par product and being #1 in the high net worth space. We view this as something that's sustainable. We've got a lot of competitive differentiators in the business. And going forward, we see opportunities in underserved segments in the market, so we can continue that track record of growth and success. Thank you. Operator: Our next question comes from Tom MacKinnon with BMO Capital. Tom MacKinnon: Steve, maybe you can talk a little bit about just the trend in terms of what you've been seeing in Hong Kong sales, certainly did better than anticipated in the second quarter. There was news around MCV stuff in late May, early June or at least in terms of offshore accounts. Maybe you can comment as to what you've been seeing with respect to trends in the MCV sales just in the last couple of months, if possible? And I have a follow-up. Steven Finch: Thanks, Tom, for the question. In terms of the sales performance in Hong Kong, yes, we were pleased with the results this quarter. As was commented on earlier, we saw growth in APE of 37% and growth in NBV of 12%. So continued solid results. And it was quite broad-based. We've got a diversified distribution platform in Hong Kong. So success in agency, bancassurance that actually more than offset lower sales year-over-year in the MCV space. And it kind of ties into your point about -- there have been some regulatory, I guess, announcements coming out of China. But those have been primarily focused on offshore investments or outbound investments. There's no direct impact on the MCV business. It's possible there could be some second order impacts, which we're watching closely. But there were changes in regulations last year and early this year, and that's having some impact in terms of the MCV business. But as you noted, it was a strong result. And we have -- as we look out into the future, we have confidence in that business. One interesting fact was that Hong Kong recently took over as the #1 source of offshore wealth flows overtaking Switzerland. So it is a global and regional finance hub that continues to be really important. Tom MacKinnon: Yes. And then the follow-up is with respect to Canadian LTD. I think you've mentioned you had poor experience in the first quarter continued into the second quarter. You talk about the overall trend to be neutral by the end of the year. What gives you confidence -- predicting claims is always tough. What gives you confidence that this is going to be trending to neutral by the end of the year? Maybe you can elaborate on some of the actions you're taking and maybe some repricing initiatives you're doing with respect to some of these cases where the experience hasn't been as good. Patrick David Graham: Thanks, Tom. Patrick here again. So yes, as you referenced, like the industry, we are seeing unfavorable morbidity experience, largely driven by disability claims. And within that, you can think that roughly 1/3 of new claims are coming from mental health, which is, they can materially extend claims duration, they're stickier. And as a business, we're making targeted investments in a number of areas to improve health outcomes for our customers. That includes earlier intervention, enhanced treatment access and specialized case management teams designed to improve health outcomes for customers, manage duration and ultimately mitigate the growing impact of that on our experience over time. We have seen improvements in Q2, modest improvements in claims from Q1. And whilst we see emerging industry trends with recoveries, we are confident that the overall insurance experience for the segment will trend towards neutral by year-end. Philip Witherington: And Tom, this is Phil. You also touched there on our ability to reprice. And just to confirm, this is annually repriceable business. And if we do see sustained adverse experience, we have the ability and intent to reprice. Operator: Our next question comes from Mario Mendonca with TD Securities. Mario Mendonca: I have just a quick follow-up on those Hong Kong sales. Was there any level of, let's say, front-ending of sales this quarter in Hong Kong, not necessarily because of the tax change because I don't think there's any way to escape the taxes. But in terms of front-ending sales in anticipation of regulatory change. Did you see any of that in the quarter, Steve? Steven Finch: Yes. Thanks, Mario. What -- the driver of the sales in Hong Kong this quarter, and Colin referenced mix, the real driver was that we routinely have customer offerings, campaigns. And in the quarter, we had campaigns that really hit the mark with customers, and that was driving the sales results. It was very attractive for customers. That's why you see the APE growth higher than the NBV growth. So it was somewhat lower margin, but it really resonated. I didn't see any sort of impact of accelerated sales from regulatory changes. Mario Mendonca: Okay. If we could go to the reinsurance transaction. So Phil, I understand your comments about retaining the scale of the U.S. business to absorb the expense load. That's a concept that I've become familiar with any insurance business. But like everything else, there's a trade-off to this. And the trade-off is that you're not getting the release of capital that you did on the previous transactions. So where I'm going with this is, when I look at the pace of share repurchases over the past few years, during that period when Manulife benefited from a material improvement in the ROE, it coincided with those large reinsurance transactions that allowed for the buybacks. So I'm going with this is, if this is the new state of affairs where reinsurance transactions do not result in a release of capital, is it appropriate to suggest that the pace of buybacks can't return to where it was in the past? And as a consequence, achieving the 18% ROE becomes more and more difficult. Is that appropriate? Philip Witherington: So Mario, this is Phil. Let me take that, and Colin, feel free to supplement. The way we've structured this transaction, I mean, it really is partly a reflection of our intent to transact in different structures, the older structure, the younger block of business and now biometric risk only with the ability to preserve and retain benefits for Manulife and Manulife shareholders. There is a cost to transacting. And you can see that with the 5% negative cede, similar economics to the first 2 transactions. But through the biometric-only approach, it's not only that we retain the assets and therefore, an earnings -- continued earnings and capital generation from that portfolio as it runs off. But beyond that, it's -- of course, it allows us to sustain our scale, as you pointed out, but it's preserving profitability for Manulife. And it's coming with a limited impact, an immaterial impact to earnings. So while there isn't a big capital release, there isn't the large earnings impact. And you recall from our first 2 transactions, there was notable forfeited earnings that on an EPS basis, we made up for through share purchases, but there was also substantial net income noise through the realization of gains from OCI to net income as changes were made to the asset portfolio. So when I think about the go-forward approach, it's actually preserving the earnings rather than having to make up the earnings by way of share buybacks. Now in terms of share buybacks, they do have an important role to play in achieving our 18%-plus ROE target. We have a 2.5% share buyback program in place. And our capital generation remains strong. We also have a 2027 remittances target. That -- we're well on track to achieve that target, and that supports the share buyback program. And if I look at the second quarter, a pace of share buybacks in the second quarter, it was consistent with full delivery of the 2.5% share buyback. So I feel confident that we're doing the right thing on LTC. I feel confident that we're generating capital to support share buybacks. And the overall position of the company remains strong, both from a capital perspective and a leverage perspective. Colin, is there anything you'd like to supplement? Colin Simpson: No, I think you covered it all, Phil. I would just say, Mario, buybacks are an important lever to get us to 18%, but we're not anticipating an outsized buyback to get across the finish line. What you see this year, 2.5%, that's without any boosting from reinsurance transactions, and we wouldn't want to guide you to anything materially higher or lower than that to get to the 18% core ROE. Mario Mendonca: The bottom line, Colin and Phil, this pace of buybacks is consistent with achieving that 18% ROE. You don't need to make any -- you need to do anything special there to get to the 18%. Is that your outlook? Philip Witherington: That's a fair summary, Mario, confirmed. Operator: Our next question comes from Doug Young with Desjardins Capital Markets. Doug Young: I apologize, just something more on the long-term care insurance deal. But just looking at the ceding commission, and I know it's the same as past deals, but what's driving the ceding commission this time? Because I think last time it was the difference in return assumptions. I think that was part of the GA deal. And just in terms of structure with the ceding, how it's going to flow through, I think it's $160 million, correct me if I'm wrong. Is that accounted for as a negative in the CSM that just unwinds over time? I'm just trying to get a little bit of understanding of the mechanics of that. Stephanie Fadous: Thank you, Doug. It's Stephanie here. I think you have a good question, and you have all of the answers. In terms of the ceding commission, it's really due to a difference in expectation of returns as opposed to a different view of reserve or assumption, so similar to what we mentioned on prior deal. And the cede commission, the 5% ceding commission, you're right, this will flow through CSM over time, CSM amortization. Philip Witherington: Yes. This is Phil. I think that what Stephanie just ran through, it demonstrates that it's a really clean transaction in terms of the accounting and mechanics. There's a modest impact on CSM, which flows through to earnings over time, but there is no noise in either core earnings or net income from the biometric risk transfer. So it's something that reduces our risk without those unfortunate cosmetic accounting implications that we've seen on a couple of other transactions. Doug Young: Yes. And then just Phil or Colin, I think what would be really, really helpful is if you can kind of maybe put in context how much of Manulife's core earnings are now from legacy businesses? And how much common equity backs these legacy businesses? Because we know the starting point, you gave it to us and you've given us kind of iterations over the years because I think it does tell an interesting story. I don't know if you have the numbers with you, that would be great if you did. Just thought I'd throw that out there to see if you could provide some context to that. Philip Witherington: Yes, Doug, this is -- drawing my memory from a few years ago, we had the 15% of earnings target. We wanted to reduce legacy earnings below 15% of earnings. And we had the stretch ambition for that to be less than 10%. I can now say, and we achieved this a couple of years back, it's comfortably less than 10% of our earnings coming from LTC and VA, and this transaction further reduces that. So it's not something we track on a periodic basis, but it's well below what we had set out to achieve. Doug Young: And how about common equity backing? And I know you said LTC, VA, I know there's more than that in legacy, but -- and how about common equity backing the legacy businesses? Because I think it started at about 50%, but I don't have that number. Philip Witherington: That's not something I have to hand, but it's not something we track month in, month out. Our priority metric we were managing to was the percentage of earnings, and that's been exceeded a couple of years back. So not something that I'm overly concerned about. Operator: Our next question comes from Darko Mihelic with RBC Capital. Darko Mihelic: Steve, maybe you can speak to the other area of Asia where sales don't look so great and neither do earnings. How should we think about that? What's going on? And should we think about this trending the same way for the foreseeable future? Steven Finch: Thanks, Darko. Yes, in the other category, the primary driver of what's going on, on the sales results, it's our international high net worth business, the Bermuda business is reported in that part. And there have been headwinds this year from the Middle East conflicts. Middle East business was a significant component of that. But I would point out that we have high net worth business that we book across the region in Hong Kong and Singapore are the primary hubs. So we've seen high net worth business overall go up materially this year. So the business isn't flowing right now to Bermuda. It's flowing to Hong Kong and Singapore. So that's in the results. Unclear exactly how long it will take for that situation to unwind, but we are -- Phil mentioned some new products that we've launched there as well as focus on where the flows have gone and make sure that Bermuda continues to be an attractive offering and source for business going forward. Darko Mihelic: And then just a question on the Mandatory Provident Fund. We've heard from a few sources that they are reviewing fees by end of the year. Is there any visibility on -- I'm talking about fees from the funds that are managed. Is there any visibility on this and where it's sort of headed? Paul Lorentz: Yes. Thanks, Darko. It's Paul here. Yes, in terms of fees, this isn't a onetime exercise. It's something that we submit regularly throughout the years, and it's part of our regular fee compression budget that we build into all our businesses, frankly, as we do expect fees to come down over time. So part of that process is we build that into our planning, we make proposals to the regulator. We try and balance that with competitiveness and make sure we're competitive where we need to be. But I would look at this as BAU for us. That's how we look at it across all our business lines. Darko Mihelic: Okay. So it's not overly material in any respect. Is that the way I should think about that. Paul Lorentz: That's how you should think about it. Operator: Our next question comes from Mike Rizvanovic with Scotiabank. Mehmed Rizvanovic: Just a high-level question for Colin or maybe for Phil. Just wanted to touch on the efficiency, the expense efficiency ratio. I know you've got your target of being below 45% medium term. It's sort of oscillated there the last couple of years. I know you're spending a lot on new capabilities on the digital side. So I'm just wondering if you have any updated thoughts on how you'd like to see this number move. I'm wondering if it's reasonable to think that there are some levers that this number could improve, say, by 2 to 3 percentage points to a sustainably lower level over the next 2 to 3 years? Colin Simpson: Mike, it's Colin here. Thanks for pointing out the expense efficiency ratio. Actually, we're really pleased. 44.5% is our medium-term target. But what's important is that we continue to invest in the business. And if I look at each of the business lines, you'll see some reasonable increases. Take, for instance, GWAM, you've got Comvest that's added $25 million to expenses. Asia, we're growing. So expenses went up 10%. Within Canada, we're modernizing our customer experience. So we saw a 10% increase there. And then at the center, we spent more on AI. And so you'll see a little bit of a bump up. We've always said that the #1 use for our capital is organic investments, and this is a testament to it. In terms of can we see expense efficiency going forward, maybe 1 or 2 percentage points, absolutely. And I think AI and our AI initiatives are really key to achieving that and that's both through growing earnings and being more efficient. So lots more to see on this and lots to work on. But as I've experienced in the 4 years I've been here, expense management is so core to Manulife's DNA. This should continue being a good story for years to come. Mehmed Rizvanovic: Okay. And I'm just curious, across the segments, is it fair to say that the higher expense segments like a GWAM is maybe where you've got a bit more torque there potentially? Colin Simpson: Yes, yes, you're absolutely right. GWAM has about a 60% efficiency ratio. And so as the business mix changes, that could impact the overall number. I would point you to Asia actually. What's really interesting about Asia is that we're growing really fast and it has the lowest expense ratio. Operator: Our next question is a follow-up from Gabriel Dechaine with National Bank. Gabriel Dechaine: Just a follow-up on the group insurance LTD issues in Canada. Can you talk about some of the drivers there? Last week, we had one of your peers reporting and they mentioned that there's some economic factors that are influencing the volume of LTD claims and the duration of the claims as well. I wonder if that's something you're seeing as well. Patrick David Graham: Gabriel, Patrick here again. So yes, I think you're spot on. I mean it's a globally recognized phenomenon that in down cycles in the economy, particularly where there's increased unemployment that there are rises in certain types of disability claims. And like you, what we're seeing and what we're hearing from the market is the unfavorable morbidity experience is driven by disability claims. 1/3 of those new claims are coming, as I said earlier, from mental health claims, which again, there's a correlation. And those claims tend to be longer duration and stickier. So the programs I referenced earlier in terms of investments to get those customers back to work, get them healthy again, improve their health outcomes is the important factor. And from a recoveries perspective, again, like the industry, we're seeing some pressure, but we think we're taking the right targeted actions to get to the right outcome. Gabriel Dechaine: So your outlook for improved claims performance is leaning more on the claims management and recoveries process as opposed to some anticipation of a stronger economy or anything like that, that reverses those trends. And then if I look forward to 2027, and I expect most of the companies are going to be repricing group in Canada, like what about the companies themselves are maybe less able to accept price hikes and there's loss of inflation. Is there any concern there that you might not be able to get your pricing or maybe some customers dial back their coverage? Patrick David Graham: Yes. Look, on the first part, 100%, we control our own destiny. We're making the right investments, and we will execute on those, and that will help the trend and help our customers. And as Phil mentioned on repricing earlier, our schemes are able to be repriced annually. We will take balanced adjustments and approach to that, looking to manage both margin but also to protect growth. Gabriel Dechaine: Is this a large case, mid-case phenomenon that you're seeing? Patrick David Graham: It's not specific to any particular segment or demographic cohort. So it's kind of across the board. Gabriel Dechaine: Even regionally? Patrick David Graham: Yes. Operator: Our next question is a follow-up from Mario Mendonca. Mario Mendonca: I'll be quick. One thing I noticed like post IFRS 17 is that the corporate segments for the insurers got cleaned up. There was a lot of expenses that were being allocated to the segments in those like in that line called nondirectly attributable expenses. And then more recently, and this is not unique to Manulife. I've seen these corporate segments start to -- the losses start to really increase again. Can you talk about like what's changing here? Why are the losses in your corporate segment starting to increase? I mean one of the obvious areas I can see is that the core investment result has really started to decline in the investment income is now being allocated out to segments like Asia, for example. So what are we seeing here? Why would corporate become -- why would we start to see losses really start to increase again in corporate? Colin Simpson: Mario, it's Colin. So you're right, the corporate results has gone backward from last year. It's $45 million lower or more adverse than last year. but it's clearly explainable. And one of the reasons in Manulife's case is the presence of our retro P&C business. And as you know, the cycle is softening. So when you look at that $45 million year-on-year change, 1/3 of that is coming from our P&C retro business. When you look at the other 2/3, we're spending a lot more in central projects and mostly AI. So we're holding on to expenses at the center. And so that's pushing up the costs there. But there's also other factors like we make an accrual for withholding tax. And so we're expecting higher dividends from some of our entities that incur higher withholding tax. So that's factoring into it. We've said now that we expect the corporate result to be between $300 million and $400 million. We think we'll be towards the top end of that $400 million range, but definitely within the range. It is important to keep a lid on expenses in the corporate center, but the nature of how we're spending that money in a very central fashion means that there is a bit of upward pressure on that and not to forget the P&C business. Mario Mendonca: Yes. So $300 million to $400 million loss annually is the outlook, with the high end being more appropriate. Colin Simpson: Yes. We were lower than that. We were towards the bottom end of that range. Last year, we'll be towards the top end of that range. We'll have to go through the full financial plan before we absolutely reconfirm 2027 in light of some of the expenses that we are making centrally, but that's a good place to start modeling from. Operator: This concludes the question-and-answer session. I would like to turn the conference back over to Mr. Hung Ko for any closing remarks. Hung Ko: Thank you, operator. We'll be available after the call if there are any follow-up questions. Have a good day, everyone. Operator: This brings today's call to a close. You may disconnect your lines. Thank you for participating, and have a pleasant day. Before you buy stock in Manulife Financial, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Manulife Financial wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $400,209!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,393!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 13, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Manulife (MFC) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Manulife Financial Corp? Here are five stocks we like better. Manulife delivered strong second-quarter growth: APE sales rose 21%, core earnings increased 12%, and core EPS climbed 16%, with core ROE reaching 16.3%. Asia and wealth management were key contributors, including record Asian earnings and CAD 4 billion in global wealth-management net inflows. Canada’s sales momentum was offset by claims pressure: Canadian APE sales grew 23%, but core earnings fell 10% because of unfavorable disability and group-insurance claims experience. Management expects insurance experience to trend toward neutral by the end of 2026 and retains the ability to reprice group-insurance policies. A new long-term-care reinsurance deal reduced risk while capital remained strong: The Munich Re agreement transfers biometric risk on CAD 3.2 billion of reserves, bringing total long-term-care morbidity-risk reduction to 24%. Manulife ended the quarter with a 136% LICAT ratio and returned CAD 1.4 billion to shareholders through dividends and buybacks. 5 Undervalued Stocks To Secure Your High Yield Portfolio Manulife Financial (NYSE:MFC) reported second-quarter 2026 results marked by double-digit growth in insurance sales, higher core earnings and continued capital returns, while also announcing a third long-term care reinsurance transaction in three years. President and Chief Executive Officer Phil Witherington said annualized premium equivalent, or APE, sales increased 21% from a year earlier, supported by double-digit growth in each insurance segment. New business contractual service margin rose 16%, while the company’s total CSM balance increased 20%. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling 3 High Short Interest Stocks that Investors are Getting Wrong Core earnings rose 12% year over year and core earnings per share increased 16%, helped by ongoing share repurchases. Manulife reported core return on equity of 16.3%, up 130 basis points from the prior-year quarter. Net income totaled CAD 2.1 billion, exceeding core earnings as higher-than-expected public equity returns more than offset lower-than-expected returns on alternative long-duration assets. Asia remained a major source of growth. Core earnings in the region increased 21% to a record level, while APE sales rose 21%, led by double-digit gains in Hong Kong, Singapore and Japan. Hong Kong APE sales climbed 37%, reflecting higher savings-product sales across distribution channels, according to Chief Financial Officer Colin Simpson. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Manulife Asia President and CEO Steve Finch said the company’s Hong Kong business remained diversified, with its domestic franchise accounting for about 75% of year-to-date sales. Mainland Chinese visitor, or MCV, business represented about 25% of sales, though that mix can vary by period. Analysts asked about potential effects from Chinese regulatory and tax enforcement developments involving offshore insurance policies and investments. Finch said it was too early to assess implications, but he did not expect mainland Chinese visitor sales to go to zero and said any near-term impact would be manageable. He added that Manulife expects the longer-term trend of mainland Chinese customers accessing Hong Kong for products and services to continue. → No Hangover: Revisiting Microsoft One Week After Earnings Finch said Hong Kong’s second-quarter sales growth was driven principally by customer offerings and campaigns rather than accelerated purchasing ahead of regulatory changes. Growth in agency and bancassurance more than offset lower MCV sales year over year, he said. In Global Wealth and Asset Management, Manulife recorded CAD 4 billion of net inflows, driven by institutional business and continued contributions from CQS and Comvest. The result was partially offset by outflows in North American retirement and retail channels. Global WAM core earnings rose 9%, while its core EBITDA margin expanded 110 basis points to 31.2%. Simpson said retirement outflows reflected planned sponsor redemptions and higher member withdrawals associated with market-driven account appreciation. Retail outflows were primarily tied to active mutual-fund redemptions through third-party intermediaries in Canada, although trends improved sequentially. Canadian APE sales increased 23%, led by higher large-case group insurance sales and continued strength in participating life insurance. New business CSM in Canada rose 29%, though new business value was largely flat due to lower margins and product-mix changes in group benefits. Canadian core earnings declined 10% from the prior year, primarily because of unfavorable claims and expense experience in group insurance, as well as normal claims variability in individual insurance. Manulife said overall insurance experience improved modestly from the first quarter and expects it to trend toward neutral by the end of 2026. Patrick Graham, President and CEO of Manulife Canada, said unfavorable morbidity experience has been driven largely by disability claims. About one-third of new disability claims are related to mental health, which he said can extend claim duration. The company is investing in earlier intervention, treatment access and specialized case-management teams intended to improve customer outcomes and support return-to-work efforts. Graham also said Manulife’s group insurance business can be repriced annually. Witherington said the company has both the ability and intent to reprice if adverse experience persists. In the U.S., APE sales rose 12%, supported by product enhancements and distribution expansion. Core earnings improved from the prior year as claims experience improved in life and long-term care and the expected credit loss provision charge declined. U.S. life claims remained unfavorable during the quarter but improved meaningfully from the prior year, while long-term care experience was favorable in both earnings and CSM. Manulife announced a reinsurance agreement with Munich Re covering an older-vintage standalone long-term care block. The transaction transfers biometric risk on CAD 3.2 billion of reserves through an 80% quota share arrangement, while Manulife retains the assets backing the business and their associated investment-management economics. Witherington said the agreement represents a full transfer of biometric risk and has pricing similar to prior long-term care transactions, including a modest negative cede. The transaction is expected to be largely capital neutral because lower morbidity-risk capital requirements are offset by the release of the related risk adjustment and ceding commission. No assets are being transferred, meaning there is no capital benefit from asset disposal. The company expects foregone core earnings of about CAD 30 million in the first year, declining as the block runs off. Including previous transactions, Manulife said it will have reduced long-term care morbidity risk by 24%. Chief Actuary Stephanie Fadous said the retained long-term care block is somewhat younger and is expected to remain relatively stable before beginning to decline over the next five to 10 years. She said IFRS and statutory capital generation should begin around the same time. The newly reinsured block is more mature and has richer benefits, suggesting capital generation on the retained assets should occur sooner for that block. Management said it intends to place greater emphasis on organic management of the remaining long-term care portfolio while retaining flexibility to pursue future transactions. Witherington said Manulife’s long-term care customer-care program has generated a current run rate of more than 6% in claims savings through measures including enhanced claims management and efforts to reduce fraud, waste and abuse. Manulife ended the quarter with a LICAT ratio of 136%, representing CAD 26 billion above its supervisory target ratio. Its financial leverage ratio was 22.2%, below its medium-term target of 25%. Adjusted book value per share increased 15% year over year to CAD 41.12. Over the past 12 months, the company returned CAD 5.3 billion of capital to shareholders, including CAD 1.4 billion during the second quarter through dividends and share buybacks. Management said its current 2.5% share-repurchase program is consistent with reaching its target of core return on equity above 18%, without requiring an outsized buyback program. Simpson said Manulife expects its annual corporate result to fall within a CAD 300 million to CAD 400 million loss range, likely toward the higher end, reflecting softer property-and-casualty retrocession conditions and higher spending on central projects, particularly artificial intelligence. Manulife Financial Corporation is a multinational insurance and financial services company headquartered in Toronto, Ontario. Founded in the late 19th century as The Manufacturers Life Insurance Company, Manulife provides a broad range of financial products and services to individual and institutional clients. Its core businesses include life and health insurance, retirement and pension solutions, wealth and asset management, and group benefits. In wealth and asset management, Manulife operates through Manulife Investment Management and offers mutual funds, segregated funds, institutional asset management, and retirement plan solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Manulife Financial Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Brighthouse Financial, Inc. BHF reported second-quarter 2026 adjusted net income of $4.45 per share, which missed the Zacks Consensus Estimate by 10.4%. However, the bottom line grew 29.7% year over year. The quarterly results benefited from improved underwriting margins in the Life and Run-off segments, reduced expenses and higher earnings in the Annuities business. However, lower adjusted net investment income and weaker annuity sales on a year-over-year basis partly offset the upside. Total operating revenues of $2.1 billion decreased 2% year over year, due to lower universal life and investment-type product policy fees, net investment income and other revenues, partly offset by slightly higher premiums. The figure was below the Zacks Consensus Estimate by 8.1%. Brighthouse Financial, Inc. price-consensus-eps-surprise-chart | Brighthouse Financial, Inc. Quote Premiums of $165 million increased 0.6% year over year. Adjusted net investment income was $1.2 billion in the quarter under review, down 4.1% year over year, primarily due to lower alternative investment income. The adjusted net investment income yield was 4.17%. Total expenses were $396 million, which declined 49.1% year over year. Corporate expenses, pretax, were $204 million, up 1% year over year. Annuities recorded an adjusted operating income of $349 million, up 5.1% year over year. Annuity sales decreased 7.1% year over year to $2.4 billion, driven by lower fixed annuity sales. Life’s adjusted operating loss was $4 million, narrower than the year-ago loss of $26 million. It reflected a lower underwriting margin and lower net investment income, partially offset by lower expenses. Life insurance sales increased 18.2% quarter over quarter to $39 million. Adjusted operating loss at Run-off was $56 million, narrower than the year-ago loss of $83 million. It reflected a higher underwriting margin and lower expenses, partially offset by lower net investment income. Corporate & Other incurred an adjusted operating loss of $31 million, wider than the year-ago loss of $25 million, reflecting lower net investment income, partially offset by higher interest credited. Cash and cash equivalents were $7.1 billion, up 28.2% year over year. Shareholders’ equity of $6.6 billion at the end of the second quarter of 2026 increased 15.4% year over year. As of June 30, 2026, book value per share, excluding accumulated other comprehensive income, was $156.10, up 8.3% year over year. As of June 30, 2026, Statutory combined total adjusted capital was $4.9 billion, down 12.5% year over year. As of June 30, 2026, the estimated combined risk-based capital ratio was between 430% and 450%. Brighthouse Financial currently has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Voya Financial, Inc. VOYA reported second-quarter 2026 adjusted operating earnings of $1.51 per share, missing the Zacks Consensus Estimate of $1.88 by 19.7%. The bottom line declined 38.6% year over year. Revenues of $269 million missed the consensus mark by 4.6%. After-tax adjusted operating earnings fell to $140 million from $240 million in the year-ago quarter. Results included about $40 million of pre-tax severance expenses and a $15 million pre-tax loss tied to alternative investment performance. Consolidated revenues declined 4.3% year over year to $1.90 billion. Fee income increased 7.5% to $620 million, but net investment income fell 8% to $537 million. Premiums remained nearly flat at $716 million. Total benefits and expenses rose 3.8% to $1.86 billion, including a 4.8% increase in operating expenses. Manulife Financial Corporation MFC reported second-quarter 2026 core earnings of 79 cents per share, which beat the Zacks Consensus Estimate by 1.3%. The bottom line increased 16% year over year. Revenues of $7.82 billion surpassed the consensus estimate of $7.42 billion by 5.4%. Core earnings were C$1.92 billion ($1.38 billion), up 12% year over year. APE sales advanced 21% year over year to C$2.70 billion ($1.95 billion). Asia remained the largest contributor, with sales rising to C$2.07 billion from C$1.71 billion. Canada APE sales increased 23% year over year to C$426 million ($307.69 million). Lincoln National Corporation LNC reported second-quarter 2026 adjusted earnings per share of $2.24, which surpassed the Zacks Consensus Estimate by 12%. The bottom line declined 5.1% year over year. Adjusted operating revenues grew 4.2% year over year to $4.93 billion, surpassing the Zacks Consensus Estimate by 1.4%. Management had earlier projected that the Annuities, Life Insurance, Group Protection and Retirement Plan Services units would account for 58-60%, 8-9%, 24-25% and 8-9%, respectively, of the company's total operating income in 2026. Management had earlier projected an RBC ratio of more than 420% in 2026 and over the long term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Brighthouse Financial, Inc. (BHF) : Free Stock Analysis Report Lincoln National Corporation (LNC) : Free Stock Analysis Report Manulife Financial Corp (MFC) : Free Stock Analysis Report Voya Financial, Inc. (VOYA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Sun Life Financial Inc. SLF delivered second-quarter 2026 underlying earnings of $1.46 per share, beating the Zacks Consensus Estimate of $1.39 by 5%. The bottom line increased 13% year over year. Underlying net income rose 11% to C$1.12 billion, aided by growth across Canada, Asia and the United States. Revenues of $10.09 billion increased 51.9% year over year and surpassed the Zacks Consensus Estimate of $6.46 billion by 56.2%. Group insurance sales jumped 27%, while individual insurance sales increased 16%. Assets under management rose 10% to C$1.70 trillion. Sun Life Financial Inc. price-consensus-eps-surprise-chart | Sun Life Financial Inc. Quote Insurance revenues increased 4.7% year over year to C$6.24 billion ($4.50 billion). Fee income rose 4% to C$2.22 billion ($1.60 billion), while net investment income surged nearly fourfold year over year to C$5.52 billion ($3.98 billion), providing a significant lift to the top line. Underlying insurance service results also improved. The underlying net insurance service result climbed to C$913 million ($659.44 million) from C$760 million, helped by favorable mortality and morbidity experience. Mortality gains reflected fewer claims across Canada, the United States and Asia, while Canada benefited from strong long-term disability experience. Operating expenses and commissions increased 6.2% year over year to C$2.37 billion ($1.71 billion). Canada generated underlying net income of C$427 million ($308.4 million), up 23% year over year. Asset management gross flows and wealth sales increased 60% to more than C$7 billion, driven by large defined-contribution cases, higher rollover volumes and stronger mutual fund sales. Individual insurance sales rose 3% year over year to C$140 million ($101.1 million) while Sun Life Health sales were C$203 million ($146.62 million). The U.S. business posted underlying net income of $164 million, up 15% year over year. Total U.S. sales increased 43% year over year to $324 million. Medical stop-loss sales surged 86% year over year to $225 million, driven by larger cases, strong close rates and disciplined pricing. Employee Benefits sales rose 24% to $67 million, though Dental sales declined 37% year over year to $32 million. Asia underlying net income advanced 18% year over year to C$222 million ($160.34 million), benefiting from sales momentum and in-force growth in Hong Kong, lower expenses and favorable credit experience. The gains were partly offset by lower fee income related to Hong Kong's transition to the centralized eMPF administration platform.Individual insurance sales climbed 19% year over year to C$862 million ($622.6 million), with higher sales in Hong Kong and strong growth in India, Malaysia and Indonesia. Asset management gross flows and wealth sales rose 22% year over year to C$1.1 billion. However, new business contractual service margin declined to C$277 million from C$299 million amid a more competitive environment in Hong Kong. Sun Life Asset Management recorded underlying net income of $262 million, up 4%. MFS Investment Management (MFS) benefited from higher fee income on increased average net assets, while SLC Management gained from higher net seed investment income. MFS' pre-tax net operating margin improved to 35.7% from 35.1%. Asset Management generated $1.5 billion in net inflows, in contrast to $10.9 billion in net outflows a year ago. Solutions & Other recorded $19.7 billion of inflows, helped by a large fixed-income mandate in India, while SLC Management generated $4.6 billion. These inflows more than offset $22.9 billion of MFS outflows. Managed assets increased 7% year over year to $1.03 trillion. Sun Life ended the quarter with a 145% LICAT ratio, compared with 151% a year earlier and 143% in the first quarter. The financial leverage ratio increased to 23.8% from 20.4% a year ago. Book value per common share rose 7% to C$42.49. Total contractual service margin, representing future insurance profit embedded in existing contracts, increased 12% year over year to C$15.3 billion. New business CSM declined 8% year over year to C$400 million ($288.9 million), largely reflecting lower margins in Hong Kong. Underlying return on equity improved to 19.1% from 17.6%, while the underlying dividend payout ratio was 48%, within Sun Life's medium-term target range of 40-50%. Sun Life currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Manulife Financial Corporation MFC reported second-quarter 2026 core earnings of 79 cents per share, which beat the Zacks Consensus Estimate by 1.3%. The bottom line increased 16% year over year. Revenues of $7.82 billion surpassed the consensus estimate of $7.42 billion by 5.4%. Core earnings were C$1.92 billion ($1.38 billion), up 12% year over year.Net income attributed to shareholders increased C$321 million to C$2.11 billion, aided by favorable market experience. Core return on equity expanded 130 basis points year over year to 16.3%. The expense efficiency ratio improved 100 basis points year over year to 44.5%, indicating positive operating leverage during the quarter.Voya Financial, Inc. VOYA reported second-quarter 2026 adjusted operating earnings of $1.51 per share, missing the Zacks Consensus Estimate of $1.88 by 19.7%. The bottom line declined 38.6% year over year. Revenues of $269 million missed the consensus mark by 4.6%. After-tax adjusted operating earnings fell to $140 million from $240 million in the year-ago quarter. Results included about $40 million of pre-tax severance expenses and a $15 million pre-tax loss tied to alternative investment performance. Consolidated revenues declined 4.3% year over year to $1.90 billion. Fee income increased 7.5% to $620 million, but net investment income fell 8% to $537 million. Premiums remained nearly flat at $716 million. Lincoln National Corporation LNC reported second-quarter 2026 adjusted earnings per share of $2.24, which surpassed the Zacks Consensus Estimate by 12%. The bottom line declined 5.1% year over year. Adjusted operating revenues grew 4.2% year over year to $4.93 billion, surpassing the Zacks Consensus Estimate by 1.4%.LNC's estimated RBC ratio remained above 420% at the end of the reported quarter. Insurance premiums inched up 2% year over year to $1.7 billion, marginally missing the Zacks Consensus Estimate by 0.01%. Fee income was $1.4 billion, which improved 4.3% year over year but missed the consensus mark by 0.4%. Net investment income advanced 10.5% year over year to $1.6 billion and beat the consensus mark by 10.8%. Meanwhile, other revenues of $202 million rose 9.8% year over year in the quarter under review. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sun Life Financial Inc. (SLF) : Free Stock Analysis Report Lincoln National Corporation (LNC) : Free Stock Analysis Report Manulife Financial Corp (MFC) : Free Stock Analysis Report Voya Financial, Inc. (VOYA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Reinsurance Group of America, Incorporated (RGA) reported second-quarter 2026 adjusted operating earnings of $8.89 per share, which beat the Zacks Consensus Estimate by 36.6%. The bottom line rose 88.3% from the year-ago quarter. RGA reported strong second-quarter results, driven by solid growth in Financial Solutions businesses across the United States, EMEA and the Asia/Pacific, along with higher investment income and premium growth. However, higher expenses and lower premiums in the United States and Latin America Traditional segment and foreign currency headwinds partially offset the strong performance. Reinsurance Group of America, Incorporated price-consensus-eps-surprise-chart | Reinsurance Group of America, Incorporated Quote RGA's operating revenues of $6.7 billion beat the Zacks Consensus Estimate by 1%. The top line improved 18.5% year over year on higher net investment income, net premiums and other revenues. Net premiums of $4.5 billion increased 7.7% year over year and missed the Zacks Consensus Estimates by 4.2%. Investment income improved 10.3% from the prior-year quarter to $1.8 billion and beat the Zacks Consensus Estimates by 13%. The increase was driven by a larger average invested asset base and higher earned yields. The average investment yield increased to 5.33% from 5.31% in the prior-year period, driven by higher variable investment income. Total benefits and expenses increased 14.7% year over year to $6 billion, driven by higher claims and other policy benefits, interest credited, policy acquisition costs and other insurance expenses, and other operating expenses. U.S. and Latin America: Total pre-tax adjusted operating income was $319 million, which increased 215.8% year over year. The Traditional segment reported pre-tax adjusted operating income of $165 million, which rose from $4 million in the prior-year quarter. Net premiums declined 2.9% from the year-ago quarter to $2 billion. The Financial Solutions segment’s pre-tax adjusted operating income increased 58.8% to $154 million. Canada: Total pre-tax adjusted operating income rose 51.4% year over year to $56 million. The Traditional segment delivered a 35.7% year-over-year increase in pre-tax adjusted operating income to $38 million. Net premiums grew 2.7% to $348 million. Foreign currency exchange rates had an immaterial effect on net premiums for the quarter. The Financial Solutions segment’s pre-tax adjusted operating income doubled year over year to $18 million, benefiting from strong variable investment income. EMEA: Total pre-tax adjusted operating income grew 28.4% to $172 million. Pre-tax adjusted operating profit of the Traditional segment was $39 million, higher than the year-ago quarter’s profit of $18 million, driven by improved claims experience and favorable one-time items. Net premiums decreased 0.9% year over year to $568 million. Foreign currency exchange rates had a favorable effect on net premiums of $10 million for the quarter. The Financial Solutions pre-tax adjusted operating income increased 14.7% year over year to $133 million, supported by new business and associated investment income. Asia/Pacific: Total pre-tax adjusted operating income rose nearly 37.6% from the year-ago quarter’s level to $249 million. The Traditional segment’s pre-tax adjusted operating income rose 24% year over year to $129 million, including a $2 million unfavorable impact from foreign currency exchange rates. Premiums increased 4.2% to $850 million, benefiting from new business growth. Foreign currency exchange rates had an unfavorable effect on net premiums of $4 million for the quarter. The Financial Solutions segment’s pre-tax adjusted operating income increased 55.8% to $120 million. Foreign currency exchange rates had an immaterial impact of $7 million on adjusted operating income before taxes. Corporate and Other: Pre-tax adjusted operating loss widened slightly to $35 million from a loss of $32 million in the year-ago quarter. As of June 30, 2026, total assets were $167 billion, up 6.7% from the 2025-end level. Book value per share, excluding accumulated other comprehensive income, increased 11.5% to $173.77 from the 2025-end level. Adjusted operating return on equity was 17.4%, representing a 470-basis-point year-over-year increase. Reinsurance Group returned $111 million to shareholders in the second quarter, including $50 million of share repurchases and $61 million in dividends. The company’s board of directors declared a quarterly dividend of 98 cents, to be paid out on Sept 1, 2026, to shareholders of record as of Aug 18, 2026. RGA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Voya Financial, Inc. VOYA reported second-quarter 2026 adjusted operating earnings of $1.51 per share, missing the Zacks Consensus Estimate of $1.88 by 19.7%. The bottom line declined 38.6% year over year. Revenues of $269 million missed the consensus mark by 4.6%. After-tax adjusted operating earnings fell to $140 million from $240 million in the year-ago quarter. Results included about $40 million of pre-tax severance expenses and a $15 million pre-tax loss tied to alternative investment performance. Consolidated revenues declined 4.3% year over year to $1.90 billion. Fee income increased 7.5% to $620 million, but net investment income fell 8% to $537 million. Premiums remained nearly flat at $716 million. Total benefits and expenses rose 3.8% to $1.86 billion, including a 4.8% increase in operating expenses. Manulife Financial Corporation MFC reported second-quarter 2026 core earnings of 79 cents per share, which beat the Zacks Consensus Estimate by 1.3%. The bottom line increased 16% year over year. Revenues of $7.82 billion surpassed the consensus estimate of $7.42 billion by 5.4%. Core earnings were C$1.92 billion ($1.38 billion), up 12% year over year. APE sales advanced 21% year over year to C$2.70 billion ($1.95 billion). Asia remained the largest contributor, with sales rising to C$2.07 billion from C$1.71 billion. Canada APE sales increased 23% year over year to C$426 million ($307.69 million). Lincoln National Corporation LNC reported second-quarter 2026 adjusted earnings per share of $2.24, which surpassed the Zacks Consensus Estimate by 12%. The bottom line declined 5.1% year over year. Adjusted operating revenues grew 4.2% year over year to $4.93 billion, surpassing the Zacks Consensus Estimate by 1.4%. Management had earlier projected that the Annuities, Life Insurance, Group Protection and Retirement Plan Services units would account for 58-60%, 8-9%, 24-25% and 8-9%, respectively, of the company's total operating income in 2026. Management had earlier projected an RBC ratio of more than 420% in 2026 and over the long term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Reinsurance Group of America, Incorporated (RGA) : Free Stock Analysis Report Lincoln National Corporation (LNC) : Free Stock Analysis Report Manulife Financial Corp (MFC) : Free Stock Analysis Report Voya Financial, Inc. (VOYA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Core EPS: Increased 16% year over year, driven by 12% growth in core earnings and continued share buybacks. Core Earnings: Grew 12% year over year, led by record results in Asia (up 21%) and Global WAM (up 9%). Net Income: $2.1 billion for the quarter, exceeding core earnings due to higher-than-expected returns on public equities. Core ROE: 16.3%, up 130 basis points from the prior year quarter. APE Sales Growth: Increased 21% year over year, with double-digit growth across all segments (Asia up 21%, Canada up 23%, US up 12%). New Business CSM: Increased 16% year over year, contributing to CSM balance growth of 20%. Global WAM Net Inflows: $0.4 billion, driven by strength in the institutional business, partially offset by outflows in retirement and retail. Global WAM Core EBITDA Margin: 31.2%, expanding 110 basis points from the prior year. Adjusted Book Value Per Share: $41.12, up 15% year over year. LICAT Ratio: 136%, representing $26 billion in excess of the supervisory target ratio. Financial Leverage Ratio: 22.2%, well below the medium-term target of 25%. Capital Returned to Shareholders: $1.4 billion in the quarter and $5.3 billion over the past 12 months. Warning! GuruFocus has detected 8 Warning Sign with MFC. Is MFC fairly valued? Test your thesis with our free DCF calculator. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. 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. Q: Can you provide your thoughts on the Chinese government's tax on offshore insurance policies and how it may affect your business in the region? A: Steve Finch, President and CEO of Manulife Asia, stated that Manulife's core strength is its domestic Hong Kong franchise, which represents about 75% of sales year-to-date, with MCV business at 25%. He noted it's too early to comment on implications, but expects that clearer guidance could remove ambiguity and support the business over time. He emphasized that structural trends of mainland Chinese customers accessing Hong Kong for currency diversification and investment access will continue, and tax benefits have not been the primary driver of this business. Q: Regarding the long-term care reinsurance deal, what was the negative cede on a US statutory basis, and what was the rationale for retaining the asset risk? A: Stephanie Fadous, Chief Actuary, explained that on an NAIC basis, the ceding commission would be around 6% to 7%, with IFRS reserves higher than statutory reserves. The transaction cedes biometric risk by exchanging variable cash flows for fixed cash flows while retaining asset management, allowing Manulife to retain earnings potential, capital generation, and the assets supporting the portfolio as the block matures. Q: Is it appropriate to suggest that the pace of buybacks can't return to past levels since this reinsurance transaction doesn't release capital, making the 18% ROE target more difficult to achieve? A: Phil Witherington, President and CEO, clarified that the biometric-only approach preserves earnings and capital generation from the retained portfolio, avoiding the substantial net income noise seen in prior transactions. Colin Simpson, CFO, added that buybacks are an important lever but not an outsized one, with the current 2.5% program consistent with achieving the 18% core ROE target without boosting from reinsurance transactions. Q: Can you discuss the trends in Hong Kong sales, particularly regarding MCV sales in the last couple of months given recent regulatory news? A: Steve Finch reported strong Hong Kong results with APE growth of 37% and NBV growth of 12%, driven by broad-based success across agency and bank assurance channels, which more than offset lower MCV sales year-over-year. He noted regulatory announcements have focused on offshore investments with no direct impact on MCV business, though there could be second-order impacts being watched closely. Q: What gives you confidence that Canadian insurance experience will trend to neutral by year-end, and can you elaborate on the actions being taken? A: Patrick Graham, President and CEO of Manulife Canada, explained that unfavorable morbidity experience is driven by disability claims, with roughly a third of new claims from mental health, which extend claim durations. The company is making targeted investments in earlier intervention, enhanced treatment access, and specialized case management. Phil Witherington added that this is annually repriceable business, and Manulife has the ability and intent to reprice if sustained adverse experience continues. Q: Was there any front-ending of sales in Hong Kong this quarter in anticipation of regulatory changes? A: Steve Finch stated that the driver of Hong Kong sales was routine customer offerings and campaigns that resonated well with customers, resulting in higher APE growth than NBV growth due to somewhat lower margins. He did not see any impact of accelerated sales from regulatory changes. Q: Can you provide context on how much of Manulife's core earnings and common equity now back legacy businesses? A: Phil Witherington noted that legacy earnings from LTC and VA are now comfortably less than 10% of earnings, achieved a couple of years back, and this transaction further reduces that. He did not have the common equity backing figure to hand, noting the priority metric managed to was the percentage of earnings, which has been exceeded. Q: Can you speak to the other area of Asia where sales and earnings don't look great, and should we expect this trend to continue? A: Steve Finch explained that the primary driver of weaker sales in the "other" category is the international high net worth business in Bermuda, which has faced headwinds from Middle East conflicts. However, high net worth business overall has gone up materially this year, with flows shifting to Hong Kong and Singapore hubs. The company is focused on ensuring Bermuda remains an attractive offering going forward. Q: Regarding the Mandatory Provident Fund fee review, is there any visibility on where fees are headed? A: Paul Lorentz, President and CEO of Global Wealth and Asset Management, stated that fee submissions are a regular process built into planning with expected fee compression over time. The company balances competitiveness with regulatory proposals, viewing this as business as usual across all business lines, and it's not overly material. Q: Can you discuss the drivers of the group insurance LTD issues in Canada, and is there any concern about repricing challenges? A: Patrick Graham confirmed that unfavorable morbidity experience is driven by disability claims, with mental health claims being longer duration and stickier. The company controls its own destiny through investments in claims management and recoveries. Phil Witherington added that schemes are annually repriceable, and Manulife will take balanced adjustments to manage both margin and protect growth. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Manulife Financial Corporation MFC reported second-quarter 2026 core earnings of 79 cents per share, which beat the Zacks Consensus Estimate by 1.3%. The bottom line increased 16% year over year. Revenues of $7.82 billion surpassed the consensus estimate of $7.42 billion by 5.4%.Results benefited from business growth in Asia and Global Wealth and Asset Management, along with a lower expected credit loss charge. Annualized premium equivalent sales increased 21%, while new business contractual service margin and new business value rose 16% and 10%, respectively. Manulife Financial Corp price-consensus-eps-surprise-chart | Manulife Financial Corp Quote Core earnings were C$1.92 billion ($1.38 billion), up 12% year over year. The improvement reflected continued growth in Asia, higher Global WAM earnings and the net positive impact of updates to actuarial methods and assumptions made in 2025.The increase was partly offset by unfavorable insurance experience in Canada and Asia, lower U.S. investment spreads and the effect of the eMPF transition in Hong Kong. Net income attributed to shareholders increased C$321 million to C$2.11 billion, aided by favorable market experience.Core return on equity expanded 130 basis points year over year to 16.3%. The expense efficiency ratio improved 100 basis points year over year to 44.5%, indicating positive operating leverage during the quarter. APE sales advanced 21% year over year to C$2.70 billion ($1.95 billion). Asia remained the largest contributor, with sales rising to C$2.07 billion from C$1.71 billion. Canada APE sales increased 23% year over year to C$426 million ($307.69 million).New business CSM increased 16% year over year to C$1.02 billion ($0.7 billion). This measure represents the expected future profit from new insurance contracts. New business value climbed 10% year over year to C$929 million ($671 million), highlighting broad-based momentum across the insurance portfolio.The CSM balance, net of non-controlling interests, reached C$27.26 billion as of June 30, 2026. Annualized organic CSM growth was 10%, supported by new business contributions, interest accretion and insurance experience. Asia core earnings increased 21% year over year to $616 million. APE sales advanced 21%, new business CSM rose 17%, and new business value improved 13%, led by growth in Hong Kong, Singapore and Japan. Changes in business mix moderated growth in profitability metrics relative to sales.U.S. core earnings jumped 55% year over year to $218 million. Improved claims experience in life insurance and long-term care, along with a lower expected credit loss charge, more than offset weaker investment spreads. APE sales rose 12%, though new business CSM declined 1% because of product mix.Canada core earnings fell 10% year over year to C$379 million ($273.74). Unfavorable claims experience and higher Group Insurance expenses weighed on results, partly offset by actuarial assumption benefits, higher investment spreads and an expected credit loss provision release. Global WAM core earnings increased 9% year over year to C$505 million ($364.75 million). Higher average assets under management and administration and contributions from the Comvest acquisition supported the increase. These benefits were partly offset by the eMPF transition and expenses associated with business growth.Average AUMA rose 15% year over year to C$1.16 trillion. The core EBITDA margin expanded 110 basis points to 31.2%, reflecting improved operating economics.Global WAM generated net inflows of C$0.4 billion. Institutional inflows of C$6.7 billion, including contributions from CQS and Comvest, offset retirement outflows of C$4.9 billion and retail outflows of C$1.4 billion. Manulife ended the quarter with a Life Insurance Capital Adequacy Test ratio of 136%, unchanged from the year-ago period. Its financial leverage ratio declined 140 basis points to 22.2%, remaining below the company’s medium-term target of 25%.Book value per common share increased 10% to C$27.48. Adjusted book value per share rose 15% to C$41.12, including a CSM balance per share of C$13.64.The company returned C$1.4 billion to shareholders during the quarter through C$0.8 billion of common share dividends and C$0.6 billion of share repurchases. It also announced a long-term care reinsurance transaction that is expected to reduce its cumulative long-term care risk by 24% upon closing. Manulife currently has a Zacks Rank #5 (Strong Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Voya Financial, Inc. VOYA reported second-quarter 2026 adjusted operating earnings of $1.51 per share, missing the Zacks Consensus Estimate of $1.88 by 19.7%. The bottom line declined 38.6% year over year. Revenues of $269 million missed the consensus mark by 4.6%. After-tax adjusted operating earnings fell to $140 million from $240 million in the year-ago quarter. Results included about $40 million of pre-tax severance expenses and a $15 million pre-tax loss tied to alternative investment performance. Consolidated revenues declined 4.3% year over year to $1.90 billion. Fee income increased 7.5% to $620 million, but net investment income fell 8% to $537 million. Premiums remained nearly flat at $716 million. Total benefits and expenses rose 3.8% to $1.86 billion, including a 4.8% increase in operating expenses.Lincoln National Corporation LNC reported second-quarter 2026 adjusted earnings per share of $2.24, which surpassed the Zacks Consensus Estimate by 12%. The bottom line declined 5.1% year over year. Adjusted operating revenues grew 4.2% year over year to $4.93 billion, surpassing the Zacks Consensus Estimate by 1.4%.LNC's estimated RBC ratio remained above 420% at the end of the reported quarter. Insurance premiums inched up 2% year over year to $1.7 billion, marginally missing the Zacks Consensus Estimate by 0.01%. Fee income was $1.4 billion, which improved 4.3% year over year but missed the consensus mark by 0.4%. Net investment income advanced 10.5% year over year to $1.6 billion and beat the consensus mark by 10.8%. Meanwhile, other revenues of $202 million rose 9.8% year over year in the quarter under review.Globe Life Inc. GL reported second-quarter 2026 net operating income of $3.61 per share, which missed the Zacks Consensus Estimate of $3.67 by 1.6%. The bottom line, however, improved 10% year over year, driven by higher insurance underwriting income. Operating revenues increased 8% year over year to $1.60 billion. The top line surpassed the Zacks Consensus Estimate by 0.6%.Total premium revenues increased 7% year over year to $1.30 billion. Life insurance premiums rose 3% to $860.8 million, while health insurance premiums climbed 16% to $436.9 million, supported by strong growth at United American and Family Heritage. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Manulife Financial Corp (MFC) : Free Stock Analysis Report Lincoln National Corporation (LNC) : Free Stock Analysis Report Voya Financial, Inc. (VOYA) : Free Stock Analysis Report Globe Life Inc. (GL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

TSX/NYSE/PSE: MFC SEHK: 945 C$ unless otherwise stated TORONTO, Aug. 5, 2026 /CNW/ -- Manulife Financial Corporation ("Manulife" or the "Company") reported its second quarter results for the period ended June 30, 2026, delivering double-digit growth in core EPS and all three insurance new business metrics.1 Key highlights for the second quarter of 2026 ("2Q26") include: Core earnings2 of $1.9 billion, up 12% on a CER basis3 compared with the second quarter of 2025 ("2Q25") Net income attributed to shareholders of $2.1 billion, up $0.3 billion from 2Q25 Core EPS4 of $1.09, up 16%3 from 2Q25. EPS of $1.20, up 22%3 from 2Q25 Core ROE4 of 16.3% and ROE of 18.0% LICAT ratio5 of 136% APE sales up 21%6, new business CSM up 16%3 and new business value ("NBV") up 10%6 from 2Q25 Global Wealth and Asset Management ("Global WAM") net inflows6 of $0.4 billion, compared with $0.9 billion of net inflows in 2Q25 "Manulife delivered a strong second quarter, with disciplined execution driving momentum against our strategic priorities. Core EPS increased 16% year over year, and all three insurance segments delivered double-digit top-line growth7, underscoring the strength of our diversified portfolio. In Asia, core earnings grew 21%, complemented by double-digit growth across all three new business metrics, while Global WAM expanded its margin and generated positive net flows, including strong contributions from our recently acquired CQS and Comvest businesses. "Manulife continued to strengthen our distribution capabilities and advance product innovation, including the launch of new high-net-worth insurance solutions, the expansion of ETF-based investment offerings in Global WAM, and a new advisor network in the U.S. We are also accelerating the integration of AI across our business to enhance customer and distributor experiences, improve efficiency, and deliver tangible value. Recent industry recognition underscores our AI leadership and ability to scale innovation globally. The long-term care reinsurance transaction announced today will further reduce our risk profile, highlighting how we're continuing to strengthen our business through innovative actions.8 We remain well positioned to continue executing on our strategy to generate sustainable growth over the long-term." — Phil Witherington, Manulife President & Chief Executive Officer "Our CSM balance9 increased 20% year over year, reflecting strong new business growth and further strengthening our future earnings capacity. We also delivered positive operating leverage this quarter, achieving an expense efficiency ratio of 44.5%.4 Supported by our strong balance sheet and low financial leverage, we remained disciplined in our capital deployment, returning $2.6 billion to shareholders through dividends and share buybacks in the first half of 2026. Core ROE of 16.3% increased 130 basis points compared with 2Q25, reflecting the strength of our high-growth businesses. Together, these results underscore our continued focus on high-quality growth and long-term value creation." — Colin Simpson, Manulife Chief Financial Officer Results at a Glance Results by Segment Strategic Highlights We are differentiating through superior distribution and product innovation In Asia, we demonstrated the strength and caliber of our agency force with Manulife Asia achieving a 9% year-over-year increase in the number of Million Dollar Round Table ("MDRT") members, the highest increase among top 10 multinational insurers10 in 2026. This reflects continued progress in scaling our high-quality agency force, supported by investments in Manulife Business Academy training programs, AI-enabled capability building, and broader advisor excellence initiatives. We launched two high-net-worth ("HNW") insurance solutions this quarter. The first is an indexed HNW Takaful solution, the first of its kind, designed to address the evolving wealth, protection, and legacy planning needs of affluent families and business owners across the Middle East, North Africa and South Asia. And the second is a HNW insurance savings solution that uniquely combines the long-term stability and wealth preservation benefits of a participating life insurance policy with investment diversification through the addition of a Manulife | CQS asset-backed securities strategy. In Global WAM, we expanded our ETF-based investment offerings to our retail customers across North America, with the launch of new asset allocation ETFs and ETF-based mutual funds in Canada, and the John Hancock Hedged Equity ETF in the U.S., broadening access to actively managed, outcome-oriented investment solutions. In the U.S., we established the Longer. Healthier. Better. Network, an aligned community of independent licensed financial advisors committed to supporting customer longevity, wellness and financial well-being through our differentiated insurance and wealth-planning solutions. Additionally, we broadened the customer reach of our life insurance solutions with an enhanced variable universal life offering that delivers greater protection, flexibility, and long‑term value, better aligning our suite of solutions with evolving customer needs and supporting future growth. We are making continued progress on our AI strategic priority, with industry recognition of our leadership and execution We were named the number one life insurer for AI maturity for the second consecutive year in the 2026 Evident AI Index for Insurance, while ranking first among North American insurers, and in the top three overall among 30 major insurers in North America and Europe. This recognition highlights our ability to scale AI-driven innovation across our global footprint, delivering measurable business value and impact, and accelerating progress on our strategic priority to operate as an AI-powered organization. In Canada, we were recognized as the Model Insurer for Data, Analytics & AI by Celent, a global financial services research and advisory firm, for our innovative use of AI in underwriting through the Manulife Automated Underwriting Decision Engine ("MAUDE"), reflecting our AI leadership in elevating advisor and customer experiences by accelerating access to coverage and enhancing operational efficiency. In Global WAM, we advanced scalable AI capabilities with the launch of new agentic AI solutions, bringing the portfolio to 13 solutions across AI-powered document intelligence readers and knowledge assistants. These capabilities are enhancing customer experience, improving operational efficiency, and creating a model for scaling AI across Manulife. In Asia, we became a Core Participating Insurer in the Hong Kong Insurance Authority's AI Cohort Programme, underscoring our commitment to advancing the responsible adoption of AI and supporting Hong Kong's development as a regional hub for AI innovation. We are advancing our health and longevity leadership through partnerships, insights, and wellness offerings We reinforced our leadership in longevity with the launch of the Longevity Preparedness Tool, a first‑of‑its‑kind personalized assessment developed in collaboration with the MIT AgeLab and our U.S. insurance and retirement businesses, helping individuals assess and improve their readiness for living longer, healthier, better lives. In Asia, we activated our strategic partnership with Bupa International Limited ("Bupa") in Hong Kong, expanding customer access to Bupa's healthcare provider partners. This initial phase of enhancements quadrupled our medical specialist network to more than 900 providers, providing customers with greater choice for healthcare. In Global WAM, we enhanced health and wellness offerings for eligible Canada Group Retirement plan members and private wealth clients, providing preferred-rate access to select health and wellness solutions, reinforcing our focus on health, wealth, and longevity. In Canada, we released our 2025 Wellness Report, providing unique insights into the evolving health and wellness needs of Canada's workforce and helping our group benefits plan sponsors make more informed decisions about the programs and benefits that can best meet the needs of their employees. Continued business growth supported double-digit increase in core earnings11 Core earnings of $1.9 billion in 2Q26, up 12% from 2Q25 The increase in core earnings reflected strong business growth in Asia and Global WAM, a lower charge in the expected credit loss ("ECL") provision, and the net positive impact of 2025 updates to actuarial methods and assumptions. The increase was partially offset by lower investment spreads in the U.S., the impact of the eMPF transition in Hong Kong, and more unfavourable net insurance experience. Asia core earnings increased 21%, reflecting continued business growth and the net positive impact of 2025 updates to actuarial methods and assumptions, partially offset by less favourable insurance experience. Global WAM core earnings increased 9%, primarily driven by higher net fee income from favourable market impacts over the past 12 months and contributions from the Manulife | Comvest business, partially offset by the impact of the eMPF transition in Hong Kong and higher expenses supporting business growth. Canada core earnings decreased 10%, reflecting unfavourable claims experience, and higher expenses in Group Insurance to support the growing business and transformational investments to elevate customer experience. This was partially offset by the net positive impact of 2025 updates to actuarial methods and assumptions, an ECL provision release, and higher investment spreads. U.S. core earnings increased 55%, reflecting improved claims experience in both life and long-term care and a lower charge in the ECL provision, partially offset by lower investment spreads. Corporate and Other core earnings decreased by $45 million, primarily driven by a higher accrual for withholding taxes, lower earnings on surplus assets, and higher expenses. Net Income attributed to shareholders of $2.1 billion in 2Q26, $0.3 billion higher compared with 2Q25 The $0.3 billion increase in net income was driven by core earnings growth and more favourable market experience. The net gain from market experience in 2Q26 reflected higher-than-expected returns on public equity, partially offset by lower-than-expected returns on alternative long-duration assets, mainly related to infrastructure, private equity and real estate investments. Double-digit growth across insurance new business metrics and positive net flows in Global WAM APE sales, new business CSM and NBV increased 21%, 16%, and 10%, respectively, highlighting the strength of our diversified business portfolio Asia continued to deliver strong momentum in APE sales, new business CSM and NBV, with a year-over-year increase of 21%, 17% and 13%, respectively, primarily driven by growth in Hong Kong, Singapore and Japan. NBV margin was 36.3%.6 Canada APE sales increased 23%, driven by higher sales in large-case Group Insurance and participating life insurance. New business CSM also grew 29%, reflecting higher sales, and increased margins in Individual Insurance and Annuities. NBV increased 1%, as higher sales more than offset the impacts of lower margins and a less favourable product mix in Group Insurance. In the U.S., APE sales increased 12%, supported by product enhancements and distribution expansion. The impact of higher sales combined with a less favourable product mix resulted in a 4% increase in NBV and a 1% decrease in new business CSM. Global WAM net inflows of $0.4 billion in 2Q26, compared with net inflows of $0.9 billion in 2Q25 Retirement net outflows were $4.9 billion in 2Q26 compared with net inflows of $2.0 billion in 2Q25. The variance reflects higher retirement plan redemptions, higher net member withdrawals reflecting higher account balances from market growth in North America, and a large-case plan sponsor sale in the U.S. in 2Q25. Retail net outflows were $1.4 billion in 2Q26 compared with net outflows of $3.2 billion in 2Q25. The variance is primarily driven by higher net flows in mainland China, third-party intermediaries in the U.S., and in our retail wealth business in Canada, partially offset by lower net flows in Canada active mutual funds through third-party intermediaries. Institutional Asset Management net inflows were $6.7 billion in 2Q26 compared with net inflows of $2.1 billion in 2Q25. The variance is attributed to higher net flows from fixed income mandates, money market mandates in mainland China, infrastructure mandates, and private credit mandates in the Manulife | Comvest business, along with higher net flows from Manulife | CQS products. New business growth continued to drive higher organic CSM and CSM balance CSM was $27,263 million as at June 30, 2026 CSM increased $2,294 million compared with December 31, 2025. Organic CSM movement contributed $1,191 million of the increase, representing a 10% annualized growth in our CSM net of NCI balance12, primarily driven by the impact of new business, interest accretion and net favourable insurance experience, partially offset by amortization recognized in core earnings. Inorganic CSM movement was an increase of $1,103 million, driven by the favourable impacts of changes in foreign currency exchange rates and equity market performance. Post-tax CSM net of NCI2 was $22,667 million as at June 30, 2026. Earnings Results Conference Call Manulife will host a conference call and live webcast on its Second Quarter 2026 results on August 6, 2026, at 8:00 a.m. (ET). To access the conference call, dial 1-888-317-6003 or 1-647-846-2809 (Passcode: 4928939#). Please call in 15 minutes before the scheduled start time. You will be required to provide your name and organization to the operator. You may access the webcast at https://www.manulife.com/ca/en/about-us/investors/results-and-reports. The archived webcast will be available following the call at the same URL as above. A replay of the call will also be available until November 6, 2026, by dialing 1-855-669-9658 or 1-412-317-0088 (Passcode: 2045803#). The Second Quarter 2026 Statistical Information Package is also available on the Manulife website at https://www.manulife.com/ca/en/about-us/investors/results-and-reports. This earnings news release should be read in conjunction with the Company's Second Quarter 2026 Report to Shareholders, including our unaudited interim Consolidated Financial Statements for the three and six months ended June 30, 2026, prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board, which is available on our website at https://www.manulife.com/ca/en/about-us/investors/results-and-reports. The Company's 2Q26 MD&A and additional information relating to the Company is available on the SEDAR+ website at https://www.sedarplus.ca and on the U.S. Securities and Exchange Commission's ("SEC") website at https://www.sec.gov. Any information contained in, or otherwise accessible through, websites mentioned in this news release does not form a part of this document unless it is expressly incorporated by reference. Media InquiriesFiona McLean(437) [email protected] Investor RelationsDerek Theobalds(416) [email protected] Earnings The following table presents net income attributed to shareholders, consisting of core earnings and details of the items excluded from core earnings: Non-GAAP and other financial measures The Company prepares its Consolidated Financial Statements in accordance with IFRS as issued by the International Accounting Standards Board. We use a number of non-GAAP and other financial measures to evaluate overall performance and to assess each of our businesses. This section includes information required by National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure in respect of "specified financial measures" (as defined therein). Non-GAAP financial measures include core earnings (loss); core earnings available to common shareholders; core earnings before interest, taxes, depreciation and amortization ("core EBITDA"); core expenses; adjusted book value; post-tax contractual service margin; post-tax contractual service margin net of NCI ("post-tax CSM net of NCI"); and core revenue. In addition, non-GAAP financial measures include the following stated on a constant exchange rate ("CER") basis: any of the foregoing non-GAAP financial measures; net income attributed to shareholders; common shareholders' net income; CSM; CSM net of NCI and new business CSM. Non-GAAP ratios include core return on common shareholders' equity ("core ROE"); diluted core earnings per common share ("core EPS"); expense efficiency ratio; adjusted book value per common share; financial leverage ratio; core EBITDA margin; growth in the CSM net of NCI from organic CSM movement; and percentage growth/decline on a constant exchange rate basis in any of the above non-GAAP financial measures and non-GAAP ratios; net income attributed to shareholders; diluted earnings per common share ("EPS"); CSM; CSM net of NCI; and new business CSM. Other specified financial measures include NBV; APE sales; gross flows; net flows; average assets under management and administration ("average AUMA"); NBV margin; and percentage growth/decline in these foregoing specified financial measures. In addition, explanations of the components of the CSM movement, other than new business CSM are provided in our 2Q26 MD&A. Non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under GAAP and, therefore, might not be comparable to similar financial measures disclosed by other issuers. Therefore, they should not be considered in isolation or as a substitute for any other financial information prepared in accordance with GAAP. For more information on non-GAAP financial measures, including those referred to above, see the section "Non-GAAP and other financial measures" in our 2Q26 MD&A, which is incorporated by reference. Reconciliation of core earnings to net income attributed to shareholders – 2Q26($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) Core earnings, CER basis and U.S. dollars – 2Q26($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) Reconciliation of core earnings to net income attributed to shareholders – 1Q26($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) Core earnings, CER basis and U.S. dollars – 1Q26($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) Reconciliation of core earnings to net income attributed to shareholders – 2Q25($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) Core earnings, CER basis and U.S. dollars – 2Q25($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) Reconciliation of core earnings to net income attributed to shareholders – YTD 2026($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) Core earnings, CER basis and U.S. dollars – YTD 2026($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) Reconciliation of core earnings to net income attributed to shareholders – YTD 2025($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) Core earnings, CER basis and U.S. dollars – YTD 2025($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) Core earnings available to common shareholders($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) Core ROE($ millions, unless otherwise stated) CSM and post-tax CSM information($ millions pre-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) New business CSM(1) detail, CER basis($ millions pre-tax, and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) Net income financial measures on a CER basis($ Canadian millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) Adjusted book value($ millions) Reconciliation of Global WAM core earnings to core EBITDA($ millions, pre-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) Core EBITDA margin and core revenue($ millions, unless otherwise stated) Core expenses($ millions, and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) CAUTION REGARDING FORWARD-LOOKING STATEMENTS From time to time, Manulife makes written and/or oral forward-looking statements, including in this document. 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 Litigation Reform Act of 1995. The forward-looking statements in this document include, but are not limited to, statements with respect to our ability to achieve our medium-term financial and operating targets, [the expected closing time of the reinsurance transaction described herein and its expected impact,] and the expected benefits and value derived from the use of AI and also relate to, among other things, our objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates, and can generally be identified by the use of words such as "may", "will", "could", "should", "would", "likely", "suspect", "outlook", "expect", "intend", "estimate", "anticipate", "believe", "plan", "forecast", "objective", "seek", "aim", "continue", "goal", "restore", "embark" and "endeavour" (or the negative thereof) and words and expressions of similar import, and include statements concerning possible or assumed future results. Although we believe that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements and they should not be interpreted as confirming market or analysts' expectations in any way. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from expectations include but are not limited to: general business and economic conditions (including but not limited to the performance, volatility and correlation of equity markets, interest rates, credit and swap spreads, inflation rates, currency rates, investment losses and defaults, market liquidity and creditworthiness of guarantors, reinsurers and counterparties); changes in laws and regulations; changes in accounting standards applicable in any of the territories in which we operate; changes in regulatory capital requirements; our ability to obtain premium rate increases on in-force policies; our ability to execute strategic plans and changes to strategic plans; downgrades in our financial strength or credit ratings; our ability to maintain our reputation; impairments of goodwill or intangible assets or the establishment of provisions against future tax assets; the accuracy of estimates relating to morbidity, mortality and policyholder behaviour; the accuracy of other estimates used in applying accounting policies and actuarial methods and embedded value methods; our ability to implement effective hedging strategies and unforeseen consequences arising from such strategies; our ability to source appropriate assets to back our long-dated liabilities; level of competition and consolidation; our ability to market and distribute products through current and future distribution channels; unforeseen liabilities or asset impairments arising from acquisitions and dispositions of businesses; the realization of losses arising from the sale of investments classified fair value through other comprehensive income; our liquidity, including the availability of financing to satisfy existing financial liabilities on expected maturity dates when required; obligations to pledge additional collateral; the availability of letters of credit to provide capital management flexibility; accuracy of information received from counterparties and the ability of counterparties to meet their obligations; the availability, affordability and adequacy of reinsurance; legal and regulatory proceedings, including tax audits, tax litigation or similar proceedings; our ability to adapt products and services to the changing market; our ability to attract and retain key executives, employees and agents; the appropriate use and interpretation of complex models or deficiencies in models used; political, legal, operational and other risks associated with our operations; geopolitical uncertainty, including international conflicts and trade disputes; acquisitions and our ability to complete acquisitions including the availability of equity and debt financing for this purpose; the disruption of or changes to key elements of the Company's or public infrastructure systems; environmental concerns, including climate change; our ability to protect our intellectual property and exposure to claims of infringement; [the receipt of required regulatory approvals with respect to the reinsurance transaction described herein;] our ability to execute our digital plans and to deploy future digital use cases, including with respect to AI, and our inability to withdraw cash from subsidiaries. Additional information about material risk factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found under "Risk Management and Risk Factors" and "Critical Actuarial and Accounting Policies" in the Management's Discussion and Analysis in our most recent annual report, under "Risk Management and Risk Factors Update" and "Critical Actuarial and Accounting Policies" in the Management's Discussion and Analysis in our most recent interim report, and in the "Risk Management" note to the Consolidated Financial Statements in our most recent annual and interim reports, as well as elsewhere in our filings with Canadian and U.S. securities regulators. The forward-looking statements in this document are, unless otherwise indicated, stated as of the date hereof and are presented for the purpose of assisting investors and others in understanding our financial position and results of operations, our future operations, as well as our objectives and strategic priorities, and may not be appropriate for other purposes. We do not undertake to update any forward-looking statements, except as required by law. View original content to download multimedia:https://www.prnewswire.com/news-releases/manulife-reports-second-quarter-2026-results-302844227.html View original content to download multimedia: http://www.newswire.ca/en/releases/archive/August2026/05/c0896.html