Manulife Q1 Earnings Miss Expectations, NBV Sales Rise Y/Y

Manulife Financial Corporation MFC delivered first-quarter 2025 core earnings of 69 cents per share, which missed the Zacks Consensus Estimate by 1.4%. The bottom line decreased 1.4% year over year. Core earnings of $1.2 billion (C$1.8 billion) declined 7.6% year over year. Core earnings decreased modestly, as continued business growth in Global WAM and Asia was offset by strengthened provisions related to expected credit loss of $45 million post-tax in the first quarter of 2025, and a provision for the California wildfires of $43 million post-tax in the first quarter of 2025.

New business value (NBV) in the reported quarter was $631.6 million (C$907 million), up 29.4% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Annualized premium equivalent (APE) sales increased 28.5% year over year to $1.8 billion (C$2.7 billion).

New business contractual service margin (CSM) increased 31.4% year over year to $631 million (C$907 million)

The Global Wealth and Asset Management business generated net inflows of $0.3 billion (C$0.5 billion), which plunged 93.8% year over year.

Core return on equity, measuring the company’s profitability, contracted 60 basis points year over year to 15.6%.

The Life Insurance Capital Adequacy Test ratio was 137% as of March 31, 2025.

Segmental Performance of MFC

Global Wealth and Asset Management division’s core earnings were $316 million (C$454 million), up 21.5% year over year. Retirement net outflows of $1.8 billion (C$2.6 billion) declined 21.7% year over year, reflecting higher retirement plan redemptions and higher net member withdrawals in North America. Retail net inflows of $0.3 billion (C$0.5 billion) declined 75% year over year, reflecting higher redemptions due to lower investor demand amid market volatility. This was partially offset by higher money market fund sales and new fund launches in mainland China, as well as higher net sales through the retail wealth platform in Canada. Institutional Asset Management net inflows of $1.8 billion (C$2.6 billion) increased 38.4%, driven by lower redemptions in fixed income mandates.

Asia division’s core earnings totaled $492 million, up 7% year over year, reflecting continued business growth, improved impact of new business, and favorable claims experience, partially offset by strengthened ECL provisions.

Asia reported record levels of APE sales, new business CSM and NBV, with year-over-year growth of 50%, 38% and 43%, respectively, reflecting higher sales volumes in Hong Kong, Asia Other and Japan. 

Manulife Financial’s Canada division’s core earnings of $260 million (C$374 million) declined 1.8% year over year. 

APE sales increased 9% year over year, bolstered by higher sales volumes across all business lines. NBV grew 15% year over year. New business CSM also increased 30% year over year, driven by higher sales volumes in Individual Insurance and segregated fund products.

The U.S. division reported core earnings of $251 million, down 25% year over year. The decrease reflects lower investment spreads, strengthened ECL provisions, and the net unfavorable impact of the annual review of actuarial methods and assumptions in 2024.

New business CSM decreased 3%, primarily driven by product mix, partially offset by higher sales volumes.

APE sales and NBV increased 6% and 30%, respectively, reflecting continued demand from affluent customers for accumulation insurance products.

Zacks Rank

Manulife currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Insurers

Reinsurance Group of America, Incorporated RGA reported first-quarter 2025 adjusted operating earnings of $5.66 per share, which beat the Zacks Consensus Estimate by 6.2%. The bottom line decreased 6% from the year-ago quarter’s figure. Net foreign currency fluctuations had a favorable effect of 9 cents per share on adjusted operating income. 

RGA's operating revenues of $5.3 billion missed the Zacks Consensus Estimate by 7%. The top line declined 13.7% year over year due to higher net premiums and net investment income. Net premiums of $4 billion rose 23.9% year over year. Investment income increased 13% from the prior-year quarter to $1.2 billion on higher average invested assets. Average investment yield decreased to 4.64% from 4.7% in the year-ago period, reflecting lower variable investment income and lower yield on cash and cash equivalents, partially offset by higher new money rates.

Voya Financial, Inc. VOYA reported first-quarter 2025 adjusted operating earnings of $2.15 per share, which beat the Zacks Consensus Estimate by 35.2%. The bottom line increased 14.4% year over year.Total revenues amounted to nearly $2 billion, which decreased 4% year over year.

Net investment income increased 5.9% year over year to $560 million. Meanwhile, fee income of $570 million increased 11.1% year over year.  Premiums totaled $737 million, down 7.9% from the year-ago quarter. Total benefits and expenses were $1.8 billion, up 1.8% from the year-ago quarter. As of March 31, 2025, VOYA’s total client assets were $694 billion, up 21% year over year, primarily due to assets onboarded from OneAmerica, positive capital markets and significant recordkeeping wins.

Prudential Financial, Inc. PRU reported first-quarter 2025 adjusted operating income of $3.29 per share, which beat the Zacks Consensus Estimate by 2.5%. The bottom line rose 7.8% year over year. Total revenues of $13.4 billion declined 38% year over year and missed the Zacks Consensus Estimate by 7.7%. The decrease in revenues was due to lower premiums. 

Total benefits and expenses amounted to $18.9 billion, which declined 41% year over year in the first quarter. This decrease was due to lower insurance and annuity benefits, interest expense and operating expenses. The figure was higher than our estimate of $13 billion.

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