Manulife Financial Corp. Q4 FY2024 earnings call

• 2024 was a strong year with Asia and Global WAM contributing 70% of record core earnings over $7 billion. - Milestone reinsurance transactions including LTC and Canadian universal life deals, unlocking $2.8 billion capital release and 0.4% ROE accretion. - Digital initiatives like generative AI sales tool in Asia and new retail wealth platform in Canada, achieving high NPS and STP. - Invested $1 billion in digital capabilities, achieved efficiency ratio 44.8% in line with target. - Strong remittances of $7 billion, returned over $6 billion to shareholders via dividends and buybacks, Board approved 10% dividend increase and new buyback program.

Asia segment: APE sales increased 63% from prior year quarter, new business CSM and NBV grew 38% and 37% respectively, core earnings grew 16%. Global WAM: Core earnings increased 34%, net inflows $1.2 billion, average third party AUMA crossed $1 trillion. Canada: APE sales increased 4%, core earnings grew 11%. US: APE sales up 7%, new business value up 17%, core earnings down 16%.

• New share buyback program to repurchase up to 3% of outstanding common shares starting late February 2025. - Board approved 10% increase in common share dividend. - Target of $22 billion cumulative remittances by 2027, with 2024 starting strong at $7 billion. - Expect continued momentum despite macroeconomic volatility and geopolitical uncertainty.

• Macro-economic volatility and geopolitical uncertainty. - Impact of trade wars on GDP, inflation, and unemployment, potentially affecting credit losses and economic indicators.

Q: About drag shrinking, what drove the improvement?

A: Main driver was real estate return flat with small declines in external appraisals offset by income, remaining classes mixed with infrastructure strong and private equity better. Outlook expects broad improvement but office real estate to underperform for period.

Q: On Asia segment outlook and GMT impact?

A: 2024 Asia growth strong, majority from normal activity, 16% core earnings growth sustainable. GMT charge in 2024 was $57 million, 80% from Asia, and will be pushed down to segments as countries enact.

Q: On GWAM margins and P&C catastrophe reinsurance?

A: GWAM margins strong due to strong top line, disciplined expense management. P&C exposure to California wildfires limited, and hurricane season exposure managed by adjusted underwriting.

Q: On earnings on surplus and Vietnam business?

A: Earnings on surplus stable with currency and fund rebalancing impact. Vietnam business has strong in-force portfolio, intangible assets recoverable, and mutual agreement to exit one bank assurance partnership recovered assets.

Q: On remittances and tax rate?

A: $7 billion remittances with $750 million from reinsurance transactions, core tax rate expected to be around 15% with GMT impact. Credit loss low but macro volatility may impact Q1.

Q: On insurance experience sustainability and share buybacks?

A: Insurance experience positive and sustainable with factors like Vietnam persistency normalization. Share buybacks to continue with strong capital generation, $8.8 billion deployed since 2021, new 3% buyback program announced.