Can Manulife's Organic Growth Power Long-Term Momentum Ahead?

Manulife Financial Corporation MFC is reinforcing its foundation by leaning on organic drivers such as strong new business growth, steady net inflows in its wealth and asset management operations and rising efficiency from ongoing capability investments. Asia remains the core engine, delivering higher volumes and attractive margins, while continued focus on scaling its presence across the region positions the company for sustained momentum. With these organic levers in play, Manulife may achieve its goal of having Asia contribute nearly half of core earnings by 2025.

Alongside organic growth, Manulife has expanded through well-chosen acquisitions. It acquired Standard Life’s Canadian operations, Standard Chartered’s pension business in Hong Kong and New York Life’s retirement services arm. These deals boosted its scale in insurance, retirement and wealth solutions. They also strengthened its position in Canada and gave an extra push to its Asian business. Each acquisition reflects disciplined capital use, focused on higher-return and less capital-intensive areas.

Manulife’s Global WAM segment adds another layer of strength with its broad diversification across regions and business lines. The launch of new funds in the United States, along with its partnership with Annexus to expand indexed offerings, demonstrates how the company is broadening its product base and reaching a broader market.

Manulife’s financial strength is further reflected in its strong return on equity. At 15.77%, it stands above the industry average of 15.23%. This edge signals efficient capital use and reinforces the company’s ability to generate sustainable shareholder value.

Headwinds Faced By MFC

Despite its strong organic growth and solid financial performance, Manulife faces headwinds that could put pressure on its margins. Lower annualized premium equivalent sales in Canada, combined with persistently low interest rates, weigh on overall performance. Its significant international exposure also makes earnings sensitive to foreign exchange fluctuations, and the costs of hedging to manage this risk add further pressure on margins.

MFC maintains a relatively low leverage position. Its debt-to-capital ratio for the trailing 12 months was 10.93, better than the industry’s 14.38, reflecting a conservative capital structure. However, its times interest earned for the same period was 5.77, slightly below the industry average of 5.96, indicating a somewhat smaller buffer to cover interest obligations compared with peers.

Earnings Surprise History

MFC’s recent performance has been mixed, beating earnings estimates in two of the last four quarters while missing in the other two. Over these last four quarters, the company delivered an average positive surprise of 2.62%.

Other Industry Players

Other players in the Insurance - Life Insurance  are Reinsurance Group of America RGA, Brighthouse Financial, Inc. BHF and Voya Financial, Inc. VOYA.

RGA’s earnings surpassed estimates in two of the last four quarters, met one and missed one, the average surprise being 1.3%.

RGA benefits from a mix of organic initiatives and strategic transactions, supported by its international presence. Its individual mortality business provides a steady earnings base, while product and market expansion drive growth. Diversified investments reduce risks, and strong recent investment income adds further support. Ongoing improvements in products, underwriting, and innovation remain key growth drivers.

Brighthouse Financial is expanding life insurance sales, enhancing annuities, and broadening distribution. Annuities remain a key driver of growth, while life insurance continues to show steady momentum. Diversified products, including fixed indexed annuities and universal life offerings, position the company to capture market opportunities. Strong investment performance and expanded distribution efforts support continued growth.

VOYA’s earnings surpassed estimates in three of the last four quarters, missed one, with the average surprise being 42%.

Voya Financial is driving growth through its expanding distribution network, automation, and disciplined cost management, supported by strategic acquisitions. Its Wealth Solutions, Investment Management, and Health Solutions businesses benefit from high-growth, capital-light models. The OneAmerica acquisition has expanded retirement coverage and advisor relationships, while the AllianzGI partnership adds scale, diversification, and global reach. Together, these initiatives strengthen Voya’s earnings potential and competitive position.

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This article originally published on Zacks Investment Research (zacks.com).

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