Q3 2025 Manulife Financial Corp Earnings Call

Operator 2: Thank you for standing by. This is the conference operator. Welcome to the Manulife Financial Corporation Q3 2025 Results Conference Call. As a reminder, all participants are in listen-only mode, and the conference call is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference, you may reach an operator by pressing star then zero. I'd now like to turn the conference over to Mr. Hung Ko, Global Head of Treasury and Investor Relations. Please go ahead.

Speaker #3: sheet Our balance remains with a underlying strong deliver 18.1% , of ratio 138% and a leverage confident we 22.7% , and we ratio of generated value of book share per another quarter growth with an increase of While continuing to year .

Hung Ko: Thank you. Welcome to Manulife's Earnings Conference Call to discuss our Q3 2025 financial and operating results, as well as our refreshed strategy that was announced yesterday afternoon. Our earnings materials, including webcast live for today's call, are available in the investor relations section of our website at manulife.com. I would like to note that a video recording of our refreshed strategy presentation and the related materials are also available in the same section of our website. Before we start, please refer to slide 2 for a caution on forward-looking statements and slide 33 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.

Speaker #3: amount of return a significant capital to shareholders slide eight . I'd like . On to deeper into the little to performance of our recent businesses potential , particularly Asia and high Global as they remain critical refreshed elements of our strategy Over the .

Speaker #3: several years , both segments past demonstrated strong track records of generating dive a growth and resilience through a volatile operating . The performance from both Asia and Global WAM has meant that on to date a year highest potential businesses are contributing basis , our 76% of core exceeding our 2025 target , of earnings 75% .

Hung Ko: We'll begin today's presentation with Philip Witherington, our President and Chief Executive Officer, who will provide a highlight of our Q3 2025 results and a strategic update, including an overview of our refreshed strategy. 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.

Speaker #3: Asia had another environment outstanding quarter of , delivering a growth 29% year on year increase in core WAM , record earnings level Our .

Speaker #3: nbv margin to a resilient , improving year on year to 39% , backed by the growth in business new quarter solid global . In WAM , we also delivered a record level of , maintaining core another earnings strong growth .

Philip Witherington: Thanks, Hung. Thank you everyone for joining us today. Before I start, I'd like to thank Marc Costantini, who's with us on the call today, for his outstanding contributions to Manulife throughout his career at the company and wish him well in the next chapter of his career. Marc's two stints with Manulife total more than 25 years, and in his most recent role as Global Head of Inforce Management, he had an immense impact in a short period of time, including the completion of several monumental reinsurance transactions, which unlocked significant value for shareholders. While we're sad to see him go, we know he will flourish as a CEO, and we wish him nothing but the best. Inforce management has been embedded as a capability in our organization, and it will remain an important enabler of our commercial success.

Speaker #3: And this was our eighth consecutive quarter of double growth from pre-tax year . And our disciplined focus on growth with proactive expense management continue to to enabled us generate positive operating prior leverage and our core increase steadily EBITDA margin , which expanded by 310 basis points year on year to 30.9% .

Speaker #3: the . These This are great quarter reflect on the future and what next , I'm confident that our refreshed strategy , supported by I priorities , will us to deliver growth and sustainable new achieve our clear position be the ambition to one choice for customers number .

Speaker #3: comes With that , I'll hand to Colin to our discuss results in it over more detail . Colin . Phil . third quarter was The Thanks , strong quarter for Manulife , where we indeed a continued to demonstrate the ongoing strength , quality of our resilience business and .

Philip Witherington: Naveed Irshad, President and CEO of Manulife Canada, has taken on an expanded role and assumed responsibility for Inforce Management and reinsurance globally while continuing to lead the Canada Segment. Shifting back to the purpose of today's call, yesterday, we announced our Q3 2025 financial results. At the same time, we unveiled our refreshed enterprise strategy, which builds on our strengths, is growth-focused, and is anchored in our ambition to be the number one choice for customers. Materials related to our refreshed strategy, including a video, are available in the Investor Relations section of our website, but I want to highlight a few key takeaways. To deliver on our ambition, drive sustainable growth for the long term, and build on our total shareholder return momentum, we're pleased to introduce new and elevated strategic priorities.

Speaker #3: Let's on slide begin ten , where we our growth talk about quarter . The momentum in our new insurance performance continued in the third quarter .

Speaker #3: business AIP sales in the increased 8% from the year , with strong contributions prior American from our North businesses . This resulted in value in our continued growth metrics , with 25% and in new 11% growth business .

Speaker #3: CSM and new business value , respectively Growth in . new business CSM was strong with each insurance segment delivering growth of greater compared to the prior 15% or quarter .

Speaker #3: In fact , our year total new business CSM increased over 20% year over year for the fifth consecutive . quarter Further highlighting the strength of our diversified franchise and providing an read through to encouraging the earnings future potential of each business .

Philip Witherington: Maintaining a diversified and balanced portfolio is important to us as it provides resilience and access to multiple sources of growth without overreliance on any single market. We continue to be well-positioned to capture the exceptional growth opportunities across Asia and Global WAM, and I'm pleased to share that we have reached an agreement with Mahindra, a leading conglomerate and consumer brand in India, to form a joint venture to enter the India insurance market subject to regulatory approvals. Mahindra is an incredibly strong and trusted partner with whom we have an existing asset management relationship. I'm excited about expanding our partnership further. Our continued focus on Asia and Global WAM will be accompanied by deliberate investments to enhance and strengthen our leadership position in our home market and maintain a scaled presence in the US, which remains the largest insurance market and the largest economy in the world.

Speaker #3: Headwinds in North American retail US retirement channel and our led to net outflows of $6.2 billion for global WAM . Following six consecutive quarters of positive flows net in our retail business .

Speaker #3: This was primarily due to continued pressure in the wealth channels . intermediary and headwinds in While the as retirement in our US resulted were absolute business higher elevated markets anticipated level of Moving on participant to slide withdrawals 11 , which summarizes the .

Speaker #3: earnings drivers when compared to the same year . We continued to see period growth in our insurance businesses in Asia and Canada , which contributed to a higher insurance service result .

Speaker #3: We also saw a net favorable impact from the annual actuarial review methods and of basis change during the quarter , although this partially was offset by unfavorable claims experience in the US .

Speaker #3: I would note that US insurance experience improved from the previous quarter , even though claims severity remains somewhat elevated on number of a small policies .

Philip Witherington: We will also leverage our early leadership in AI to become a truly AI-powered organization, and we will utilize our strengths in product, digital innovation, and partnerships to become the most trusted partner for our customers' health, wealth, and financial well-being. These efforts will be further enabled through superior distribution, making it easier for customers, agents, and partners to engage with us and of course, through our winning team and culture, which is critical to every aspect of the execution of our strategy. At our Investor Day in 2024, we announced various key performance indicators and targets, including total shareholder return, employee engagement, and net promoter score, which we remain focused on delivering.

Speaker #3: contrast with last year's favorable In experience moving down on the dough table , note you will year in our improvement net investment mainly a due to result , a year over release in the expected credit loss or ECL provision driven by updates to our parameters and models .

Speaker #3: An increase in the compared with provision prior in the year. Note that we continue to expect an ECL charge of $30 million to $50 million per quarter on average year to date.

Speaker #3: increase in The ECL is excluding $86 million post-tax , the impact of the Our core ECL . earnings growth would have been 6% compared with the prior .

Speaker #3: Global WAM be a continues to significant contributor to our earnings core and reported a 19% growth in pre-tax core earnings this quarter You will .

Philip Witherington: I am incredibly excited about this next chapter for Manulife, and I'm confident that executing on our strategy will further strengthen our ability to deliver on both our 2027 financial targets and sustain our growth for the next decade and beyond. Moving on to our quarterly results on slide 7, which reflect our continued focus on execution and demonstrate the strength and diversity of our businesses. We generated strong insurance new business performance this quarter, with each insurance segment delivering growth of 15% or greater in new business CSM, providing clear evidence of our future earnings potential. While Global WAM experienced net outflows of CAD 6.2 billion, which Colin will discuss in more detail shortly, it continued to generate positive operating leverage with margin expansion year over year.

Speaker #3: notice income the lower tax amount , despite the growth in our core earnings . This is driven by an adjustment to our year to date withholding tax accrual , reflecting the use of our internal funding for the Comvest .

Speaker #3: Finally , I would also add that the most recent US acquisition reinsurance with RGA reduced our core transaction by $12 million across multiple lines of the dough .

Speaker #3: Turning to Core EPs increased 16% from the prior year , reflecting the strong slide 12 . digit double growth in core earnings as well impact of share as the buybacks .

Speaker #3: fact , even after In adjusting ECL , we saw growth of strong 11% . for We reported $1.8 billion of net income this quarter , which reflects neutral market experience , where a $291 million gain from higher than expected public equity returns was offset by a charge of $289 million in our older portfolio , from lower than expected returns .

Philip Witherington: From a profitability standpoint, core EPS grew 16% from the prior year, supported by a record level of core earnings, reflecting strong underlying business growth in Asia, Global WAM, and Canada segments, along with other factors which Colin will talk about further. Our strong core earnings generation contributed to Q3 core ROE of 18.1%, demonstrating that our core ROE target of 18%+ by 2027 is within reach, and we remain confident that we'll deliver on it. Our balance sheet remains strong with a LICAT ratio of 138% and a leverage ratio of 22.7%. We generated another quarter of book value per share growth with an increase of 7% from the prior year, while continuing to return a significant amount of capital to shareholders. On to slide 8.

Speaker #3: Our other performance was primarily impacted by lower than expected returns on private equity and commercial real estate as well as our investments , timber assets , reflecting a recent in decline commodity prices during the quarter .

Speaker #3: We also completed our annual basis change , which included our comprehensive triennial review of our US long term care business , or LTC .

Speaker #3: The basis change resulted in a net favorable impact of a $605 million in decrease overall pre-tax fulfillment cash flows , which $1.1 billion increase in a comprised CSM , partially offset by a modest decrease in net income of $216 million .

Speaker #3: Post , as well as a small impact to OCI would also . I impact of the LTC study was slightly favorable , largely driven by favorable rerate experience and assumed future premium rate increases , as well as updates to reflect higher terminations .

Philip Witherington: I'd like to dive a little deeper into the recent performance of our high potential businesses, particularly Asia and Global WAM, as they remain critical elements of our refreshed enterprise strategy. Over the past several years, both segments demonstrated strong track records of generating consistent growth and resilience through a volatile operating environment. The performance from both Asia and Global WAM has meant that on a year-to-date basis, our highest potential businesses are contributing 76% of core earnings, exceeding our 2025 target of 75%. Asia had another outstanding quarter of growth, delivering a 29% year-on-year increase in core earnings to a record level. Our NBV margin also remained resilient, improving year-on-year to 39%, backed by the solid growth in new business during the quarter.

Speaker #3: Partially offset by higher utilization of benefits . Given the cost of care , the higher premium increases included future risks amounts tied to approvals excess of our in prior assumptions illustrating our conservatism in these into our .

Speaker #3: It is important to reserves note the embedding favorable net impact from the change further basis validates the prudence of our reserves . We reported a modest favorable impact on core earnings this quarter , and we also expect a similarly positive impact on core earnings going modest forward .

Speaker #3: More information on the basis change is in the available appendix of this presentation . Moving to the segment results . We'll start with Asia on slide 13 , where generated solid we growth across all new business Despite a very metrics .

Philip Witherington: In Global WAM, we also delivered a record level of core earnings, maintaining another quarter of strong growth, and this was our eighth consecutive quarter of double-digit pre-tax growth from the prior year. Our focus on disciplined growth with proactive expense management enabled us to continue to generate positive operating leverage and steadily increase our core EBITDA margin, which expanded by 310 basis points year on year to 30.9% this quarter. These are great results, and as I reflect on the future and what comes next, I'm confident that our refreshed strategy, supported by clear priorities, will position us to deliver sustainable growth and achieve our new ambition to be the number one choice for customers. With that, I'll hand it over to Colin to discuss our quarterly results in more detail. Colin.

Speaker #3: strong prior year comparable app sales increased 5% from the prior year , strong led by growth in Asia . Other . While Hong Kong sales declined year on year compared to a very strong prior quarter .

Speaker #3: We generated year sequential growth of 4% . The overall increase in sales contributed to solid growth and value new business CSM and new business value increasing metrics , with 18% and 7% , respectively .

Speaker #3: All of this, together with an improved product mix, drove NBV margin expansion from the prior year of 2.5 percentage points to 39%.

Speaker #3: Asia core earnings also delivered another strong quarter of strong year on year growth , increasing 29% as we benefited from continued business growth momentum .

Speaker #3: The net favorable impact of basis change and insurance improved experience , as well as a release in the ECL provision compared with an increase in the prior year quarter .

Colin Simpson: Thanks, Phil. The Q3 was indeed a strong quarter for Manulife, where we continued to demonstrate the ongoing strength, quality, and resilience of our business. Let's begin on slide 10, where we talk about our growth in the quarter. The momentum in our insurance new business performance continued in Q3. Our APE sales increased 8% from the prior year, with strong contributions from our North American businesses. This resulted in continued growth in our value metrics, with 25% and 11% growth in new business CSM and new business value, respectively.

Speaker #3: Over to global War on 14 . Global WAM continued to build on its growth momentum , delivering record core a earnings with solid 9% increase year on year .

Speaker #3: This was again supported by higher average Auma and higher performance as well as fees , continued expense discipline , partially offset by lower favorable tax true ups and tax benefits .

Speaker #3: On a pre-tax basis . We achieved eighth consecutive our quarter of double digit year over year growth , delivering a 19% increase in the Net flows third quarter .

Colin Simpson: Growth in new business CSM was strong, with each insurance segment delivering growth of 15% or greater compared to the prior year quarter. In fact, our total new business CSM increased over 20% year over year for the fifth consecutive quarter, further highlighting the strength of our diversified franchise and providing an encouraging read-through to the future earnings potential of each business. Headwinds in North American Retail and our US Retirement channel led to net outflows of CAD 6.2 billion for Global WAM following 6 consecutive quarters of positive net flows. In our Retail business, this was primarily due to continued pressure in the intermediary and wealth channels, while the headwinds in our US Retirement business were anticipated as elevated markets resulted in higher absolute level of participant withdrawals.

Speaker #3: challenged this resulting in net quarter , outflows of Our retail $6.2 billion . net business saw outflows $3.9 billion related to our North of American intermediary , and while channels followed by net outflows of $1.6 billion in our retirement business .

Speaker #3: Here , we saw outflows due to market appreciation as higher people had generally higher account balances , which resulted in ordinary course withdrawals also being higher .

Speaker #3: Our institutional business also saw modest net outflows of $0.7 billion , and with the close of our third infrastructure fund in the quarter , expect we this to be a positive contributor to flows as money is deployed over the of next course year .

Speaker #3: Despite the challenges in our net we delivered another quarter of positive operating leverage with core EBITDA margin of 30.9% , which expanded 310 basis points from the prior year , or 80 basis points sequentially .

Colin Simpson: Moving on to slide 11, which summarizes the main earnings drivers when compared to the same period last year. We continued to see growth in our insurance businesses in Asia and Canada, which contributed to a higher Insurance Service Result. We also saw a net favorable impact from the annual actuarial review of methods and assumptions or Basis Change during the quarter. Although this was partially offset by unfavorable claims experience in the US, I would note that US insurance experience improved from the previous quarter, even though claims severity remains somewhat elevated on a small number of policies, in contrast with last year's favorable experience.

Speaker #3: Backed by our proactive continued expense management with regards to MF , I can confirm we officially commenced our onboarding to the new platform in the Hong Kong on November 6th and thus expect to reflect an impact to core earnings in our retirement business starting in the fourth quarter .

Speaker #3: let's head over to Canada on slide 15 , where we delivered another quarter of solid results . AP sales Next , increased 9% from the year , prior reflecting continued double digit growth in our individual insurance , primarily due to higher sales .

Colin Simpson: Moving down on the DOE table, you will note a year-over-year improvement in our net investment results, mainly due to a release in the expected credit loss or ECL provision driven by updates to our parameters and models compared with an increase in the provision in the prior year. Note that we continue to expect an ECL charge of CAD 30 million to 50 million per quarter on average. Year to date, the increase in ECL is CAD 86 million post-tax. Excluding the impact of the ECL, our Core earnings growth would have been 6% compared with the prior year. Global WAM continues to be a significant contributor to our Core earnings and reported a 19% growth in pre-tax Core earnings this quarter. You'll notice the lower income tax amount despite the growth in our Core earnings.

Speaker #3: car Our individual insurance business was the business key contributor to a strong new business , CSM growth of year . As 15% year on our group insurance business does not generate CSM , we also delivered a solid 4% year over year growth in core earnings driven by higher as well investment spreads growth in our group insurance business and favorable insurance experience in individual as insurance .

Speaker #3: The basis change additional uplift , but these drivers were partially offset by less favorable experience and group insurance . insurance Lastly , our US segments results on slide 16 .

Speaker #3: In the US , we delivered another of strong AP sales growth of 51% , fueled by higher broad quarter based demand for our suite of products .

Speaker #3: This momentum led to more than doubling of our new business , CSM and a 53% increase in new business value . Core earnings decreased 20% year on year , primarily due to unfavorable life insurance claims experience .

Colin Simpson: This is mainly driven by an adjustment to our year-to-date withholding tax accrual, reflecting the use of our internal funding for the Comvest acquisition. Finally, I would also add that the most recent US reinsurance transaction with RGA reduced our core earnings by CAD 12 million across multiple lines of the DOE. Turning to slide 12. Core EPS increased 16% from the prior year, reflecting the strong double-digit growth in core earnings as well as the impact of share buybacks. In fact, even after adjusting for ECL, we saw strong growth of 11%. We reported CAD 1.8 billion of net income this quarter, which reflects neutral market experience, where a CAD 291 million gain from higher than expected public equity returns was offset by a charge of CAD 289 million in our older portfolio from lower than expected returns.

Speaker #3: This quarter , compared with favorable experience year ago . Along with expected lower investment earnings . These impacts were partially offset by a release in the ECL provision compared with an increase in the prior year , as well as favorable lapse experience in our life , business .

Speaker #3: While large claims variability presented challenges , the fundamentals of our US business remain strong and position us well earnings in the long , our for steady confidence is the reinforced by sequential improvement in core earnings and the continued strong growth in our new business metrics this quarter , which bodes well for our in the future earnings segment .

Speaker #3: Looking beyond our earnings , worth noting our health insurance experience was once again modestly positive , including favorable incidents reported in the CSM .

Colin Simpson: Our older performance was primarily impacted by lower than expected returns on private equity and commercial real estate investments, as well as our timber assets, reflecting a recent decline in commodity prices. During the quarter, we also completed our annual basis change, which included our comprehensive triennial review of our US Long Term Care business or LTC. The basis change resulted in a net favorable impact of a CAD 605 million decrease in overall pre-tax fulfillment cash flows, which comprised a CAD 1.1 billion increase in CSM, partially offset by a modest decrease in net income of CAD 216 million post-tax, as well as a small impact to OCI.

Speaker #3: Bringing you to our book value on slide 17 . Even after returning nearly $4 billion of capital to shareholders year to through dividends and date share buybacks , we continued to grow our adjusted book value per share , which was up 12% from the prior year quarter to $38.22 on a standalone quarter basis .

Speaker #3: We continued to demonstrate our strong cash generation capability and returned over $1.3 billion of capital to shareholders , including both dividends and share buybacks .

Speaker #3: During the period . And as Phil in our mentioned refreshed strategy update , we expect our remittances for 2025 to be approximately $6 billion , putting us well on our way to achieving our cumulative 2027 target of at least $22 billion .

Colin Simpson: I would also note that the overall impact of the LTC study was slightly favorable, largely driven by favorable re-rate experience and assumed future premium rate increases, as well as updates to reflect higher terminations, partially offset by higher utilization of benefits given the higher cost of care. The premium increases included amounts tied to future asks, as well as approvals in excess of our prior assumptions, illustrating our conservatism in embedding these into our reserves. It is important to note the favorable net impact from the basis change further validates the prudence of our reserves. We reported a modest favorable impact on core earnings this quarter, and we also expect a similarly modest positive impact on core earnings going forward. More information on the basis change is available in the appendix of this presentation. Moving to the segment results.

Speaker #3: Let's now move to our balance sheet on slide 18 . Our Licat ratio remains strong providing at 138% , a $26 billion buffer above the target ratio .

Speaker #3: Our financial leverage ratio supervisory sequentially , as well as year on year . Standing at 22.7% and remaining well below our medium term target of 25% .

Speaker #3: Together , these metrics highlight the strength and stability of our robust capital sheet , which balance position and financial ample flexibility to drive future growth .

Speaker #3: And finally , moving to slide 19 , which summarizes the progress against our 2027 and medium term targets . I'm pleased with our overall financial performance this quarter .

Speaker #3: In particular with record core earnings supported by our continued top line momentum despite some headwinds that impacted our net flows in older performance this quarter .

Colin Simpson: We'll start with Asia on slide 13, where we generated solid growth across all new business metrics despite a very strong prior year comparable. APE sales increased 5% from the prior year, led by strong growth in Asia Other. While Hong Kong sales declined year on year compared to a very strong prior year quarter, we generated sequential growth of 4%. The overall increase in sales contributed to solid growth and value metrics, with new business CSM and new business value increasing 18% and 7% respectively. All of this, together with improved product mix, drove NBV margin expansion from the prior year of 2.5 percentage points to 39%.

Speaker #3: We also generated core ROE of 18.1% with the meaningful of expansion 1.5 percentage points year on year . As Phil highlighted in our refreshed strategy update , we have a clear path to achieving our 2027 core ROE of target 18% plus , and I'm confident in our ability to do so .

Speaker #3: Overall , our third quarter results reflect the ongoing strength of our underlying business performance and the quality of our portfolio . And when combined with our focused execution against refreshed strategic priorities , I'm excited for the future and the opportunities that lie ahead .

Speaker #3: This concludes our prepared remarks before we move to the Q&A session , I would like to remind each adhere to to participant a limit of two questions , including follow ups and to requeue if they have additional questions .

Colin Simpson: Asia core earnings also delivered another strong quarter of strong year-on-year growth, increasing 29% as we benefited from continued business growth momentum. The net favorable impact of basis change and improved insurance experience, as well as a release in the ECL provision, compared with an increase in the prior year quarter. Over to Global WAM on slide 14. Global WAM continued to build on its growth momentum, delivering record level core earnings with a solid 9% increase year-on-year. This was again supported by higher average AUMA and higher performance fees, as well as continued expense discipline, partially offset by lower favorable tax true-ups and tax benefits. On a pre-tax basis, we achieved our eighth consecutive quarter of double-digit year-over-year growth, delivering a 19% increase in Q3. Net flows were challenged this quarter, resulting in net outflows of CAD 6.2 billion.

Speaker #3: Operator . We will now open the call to questions .

Speaker #1: Yes . Thank you . We will begin the question now and answer session . To join the question queue , you may press star .

Speaker #1: Then one on your telephone keypad . will hear a tone You acknowledging your request . using a If you are speakerphone , please pick up your handset before pressing any keys .

Speaker #1: To withdraw your question , please press star then two the first question comes from John and Aiken with Jefferies .

Speaker #4: Good morning . Phil , I'm very intrigued about the venture that you announced in India . I was hoping able to give us a couple more details in terms of what type of products you think you're going to be offering , what you know , what you bring to the table in what I believe is a very competitive marketplace .

Speaker #4: And then finally , the regulatory approval process . How long do you think that'll take before you can actually open open shop for business ?

Speaker #3: John , this is Phil . Thanks for the question . On the first question today . Certainly the announcement we made yesterday of our the enter Indian market through a with Mahindra is very exciting .

Colin Simpson: Our retail business saw net outflows of CAD 3.9 billion related to our North American intermediary and wealth channels, followed by net outflows of CAD 1.6 billion in our retirement business. Here we saw higher outflows due to market appreciation as people generally had higher account balances, which resulted in ordinary course withdrawals also being higher. Our institutional business also saw modest net outflows of CAD 0.7 billion. With the close of our 3rd infrastructure fund in the quarter, we expect this to be a positive contributor to flows as money is deployed over the course of next year.

Speaker #3: We’ve been in a joint venture at an India market entry from an insurance perspective for many years and have been really observing the environment to wait for the right moment. What we’ve seen in recent years is that the regulatory environment has moved favorably.

Speaker #3: digital The infrastructure within India has moved very favorably . There's been consistent economic growth and market maturity within the insurance sector , as that there has been well as a notable increase in wealth across the India population , and that creates insurance needs and provides an ability to purchase insurance products .

Colin Simpson: Despite the challenges in our net flows, we delivered another quarter of positive operating leverage with core EBITDA margin of 30.9%, which expanded 310 basis points from the prior year or 80 basis points sequentially, backed by our continued proactive expense management. With regards to EMPF, I can confirm we officially commenced our onboarding to the new platform into Hong Kong on 6 November, and thus expect to reflect an impact core earnings in our retirement business starting in Q4. Next, let's head over to Canada on slide 15, where we delivered another quarter of solid results. APE sales increased 9% from the prior year, reflecting continued double-digit growth in our individual insurance business, primarily due to higher par sales.

Speaker #3: And I think a really important component of our entry strategy here really is right partner and Mahindra , who's been our partner asset on the management side since 2020 , is a fantastic partner has and not only substantial knowledge , but a strong brand as local well as a distribution infrastructure .

Speaker #3: So in terms of some of the specific questions that you ask on we table , what we bring to the our bring global expertise in the insurance sector to this and it's partnership , not it's only about product development , but it's also in aspects such as risk management , which are so important to managing insurance businesses .

Speaker #3: It's too early to get into topics such as which which products know will . You , what the products will look like . I expect it will take in the order of 12 to 18 months to get this operation off the ground and up and running , including the regulatory approval process that you referenced .

Colin Simpson: Our individual insurance business was the key contributor to a strong new business CSM growth of 15% year-on-year, as our group insurance business does not generate CSM. We also delivered a solid 4% year-over-year growth in core earnings, driven by higher investment spreads, as well as continued growth in our group insurance business and favorable insurance experience in individual insurance. The basis change provided additional uplift, but these drivers were partially offset by less favorable insurance experience in group insurance. Lastly, our US segment's results on slide 16. In the US, we delivered another quarter of strong APE sales growth of 51%, fueled by higher broad-based demand for our suite of products. This momentum led to more than doubling of our new business CSM and a 53% increase in new business value.

Speaker #3: And I look forward to providing updates along the way.

Speaker #4: Thanks for the color, Phil. I'll recoup.

Speaker #3: Thanks , John .

Speaker #1: You, and thank you. The next question comes from Alex Scott with Barclays.

Speaker #5: Hi . Good morning . I wanted to see if you could talk a little bit more about what you're seeing in some of your Asia markets .

Speaker #5: And the growth has been good. What's your outlook for continued strength of sales over the next couple of years?

Speaker #6: Yeah , thanks , Alex . It's Steve Finch here . I can take that . Yeah . As you noted , we've we've had some strong momentum in in results in Asia as Colin covered , we saw continued solid momentum in sales growth in the quarter with our new business value metrics up 7% on Nbv 18% up on CSM , new business CSM , which bodes well for our future earnings .

Colin Simpson: Core earnings decreased 20% year on year, primarily due to unfavorable life insurance claims experience this quarter compared with favorable experience a year ago, along with lower expected investment earnings. These impacts were partially offset by a release in the ECL provision compared with an increase in the prior year, as well as favorable lapse experience in our life business. While large claims variability presented challenges, the fundamentals of our US business remain strong and position us well for steady earnings in the long term. Our confidence is reinforced by the sequential improvement in core earnings and the continued strong growth in our new business metrics this quarter, which bodes well for our future earnings in the segment. Looking beyond our earnings, it is worth noting our overall LTC insurance experience was once again modestly positive, including favorable incidents reported in the CSM.

Speaker #6: And we've seen broad based success across multiple markets . Continued strength in the value metrics in Hong Kong and then in Asia . Other .

Speaker #6: We we had a strong result in our China business as well as continued momentum in Singapore . Our Indonesia Agency , and as well as our bank partner in in the Philippines .

Speaker #6: So we've continued to see broad based success . And you know , what we see is the the market fundamentals and customer demand remains strong and aligned with the the strategy that updated on .

Colin Simpson: Bringing you to our book value on slide 17. Even after returning nearly CAD 4 billion of capital to shareholders year to date through dividends and share buybacks, we continued to grow our adjusted book value per share, which was up 12% from the prior year quarter to CAD 38.22. On a standalone quarter basis, we continued to demonstrate our strong cash generation capability and returned over CAD 1.3 billion of capital to shareholders, including both dividends and share buybacks during the period. As Phil mentioned in our refreshed strategy update, we expect our remittances for 2025 to be approximately CAD 6 billion, putting us well on our way to achieving our cumulative 2027 target of at least CAD 22 billion. Let's now move to our balance sheet on slide 18.

Speaker #6: Phil, we're continuing to make the investments for growth, and we're well positioned to capitalize in markets across the region.

Speaker #5: Thank That's helpful . you for the next question . I wanted to ask about your private credit exposure . See if you could numbers around put some of the some of the different forms of private credit you have .

Speaker #5: and also just And ask if you have any comments just on some of the , some of the comments that have been made by industry participants out there that have more been a little private credit recently .

Speaker #3: Alex , it's Trevor , thanks for the question . So yes , in terms of private credit , just for context , I below investment grade private credit portfolio is around 4 billion Canadian .

Colin Simpson: Our LICAT ratio remains strong at 138%, providing a CAD 26 billion buffer above the supervisory target ratio. Our financial leverage ratio improved sequentially as well as year on year, standing at 22.7% and remaining well below our medium-term target of 25%. Together, these metrics highlight the strength and stability of our robust capital position and balance sheet, which provide ample financial flexibility to drive future growth. Finally, moving to slide 19, which summarizes the progress against our 2027 and medium-term targets. I am pleased with our overall financial performance this quarter, in particular with record core earnings supported by our continued top-line momentum despite some headwinds that impacted our net flows and older performance. This quarter, we also generated core ROE of 18.1% with a meaningful expansion of 1.5 percentage points year on year.

Speaker #3: It's a little bit less than about 1% of our general account assets . It is the the strategy is largely focused on middle market lending to private equity sponsored companies .

Speaker #3: It's pretty diverse by issuer , sector and sponsor . And we do manage an underwrite these assets in-house say we see our . I would participation as kind of being on the low end of the risk spectrum .

Speaker #3: Our performance has actually been quite strong , even with Covid , even with the rate increases and the credit experience has actually been , I think , well within our loss we are actually assumptions .

Speaker #3: quite happy with the in terms of use of private credit . I would say we're always So looking at new strategy asset classes to diversify the balance sheet .

Speaker #3: I think given the nature of private credit , the ratings , the term and the fact that it's floating rate the most for us in natural home sheet is probably our par and adjustable liabilities , where investment is passed back to the policyholder .

Colin Simpson: As Phil highlighted in our refreshed strategy update, we have a clear path to achieving our 2027 core ROE target of 18% plus, and I'm confident in our ability to do so. Overall, our Q3 results reflect the ongoing strength of our underlying business performance and the quality of our portfolio. When combined with our focused execution against refreshed strategic priorities, I'm excited for the future and the opportunities that lie ahead. 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 re-queue if they have additional questions. Operator, we will now open the call to questions.

Speaker #3: So I think we might look to add , you know , a little bit more there where we thought of it was sort appropriate for the balance sheet .

Speaker #5: Okay . Thank you .

Speaker #1: Thank you . The next question comes from Gabriel Desheng with National Bank financial .

Speaker #7: Good . First question is for the yeah , the business , the mandatory provident fund . You fee changes the know , that are they're going to start having an effect in Q4 .

Speaker #7: So we all are aware of this . But you alluded to , you know , some actions you would take and you'd this contemplated regulatory change when you laid out your 2020 vision .

Operator 2: Yes. Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. The first question comes from John Aiken with Jefferies.

Speaker #7: Maybe can , you you know , shed a bit more light on what some of these offsets are , how impactful they could be , when they could become effective .

Speaker #7: I guess .

Speaker #8: Yeah . Thank you . Paul Lorentz Well , it's here . Yeah . Just on on the that we provided around about 25 million USDA quarter remains remains intact .

John Aiken: Good morning. Phil, I'm very intrigued about the venture that you announced in India. Was hoping you might be able to give us a couple more details in terms of, you know, what type of products you think you're gonna be offering. What, you know, what you bring to the table in what I believe is a very competitive marketplace. Finally, the regulatory approval process. How long do you think that'll take before you can actually open shop for business?

Speaker #8: Once we get through the entire transition . So we did transition this month . It will take us to some time decommission earlier , obviously reduce our FTE footprint there because we're no longer business .

Speaker #8: servicing the So you'd expect to see systems some of that come through that costs continue into Q1 . And then we would expect most of those to disappear into Q2 .

Speaker #8: In terms of the outlook for Q4, we did end the quarter higher with AUMA versus the average. So there is a little bit of upside there in terms of revenue.

Philip Witherington: John, this is Phil. Thanks for the question and the first question today. It's certainly the announcement we made yesterday of our intention to enter the India market through a JV with Mahindra is very exciting. We've been looking at an India market entry from an insurance perspective for many years and have been really observing the environment to wait for the right moment. What we've seen in recent years is that the regulatory environment has moved favorably. The digital infrastructure within India has moved very favorably. There's been consistent economic growth and market maturity within the insurance sector. As well as that, there has been a notable increase in wealth across the India population, and that creates insurance needs and provides an ability to purchase insurance products.

Speaker #8: But offset that'd be NPF by the coming in for two months of the quarter . in And then would Q1 , we obviously get the full run rate coming through .

Speaker #7: So just to put a finer point on , are you expecting to fully offset at some point in the future or or not ?

Speaker #8: Yeah . So most most of the most of the expense actions were up to to try and get we took ahead of it .

Speaker #8: That's why such an we've seen margin , frankly , leading in our improvement transition . So we were very up to the proactive in terms of not waiting for the transition to happen .

Speaker #8: So, we've taken most of the out, I feel we've except for those that disappear in Q1, which will.

Speaker #7: Okay . Then question on the actuarial review , which I always am hesitant to ask about because it could get a little bit technical , but the in LTC component specifically , there's a increase your pattern you familiar essentially , and then offset that with future premium increases expected .

Philip Witherington: I think a really important component of our entry strategy here is really moving with the right partner. Mahindra, who's been our partner on the asset management side since 2020, is a fantastic partner and has not only substantial local knowledge, but a strong brand as well as a distribution infrastructure. In terms of some of the specific questions that you ask on what we bring to the table, we bring our global expertise in the insurance sector to this partnership. It's not only about product development, but it's also in aspects such as risk management, which is so important to managing insurance businesses. It's too early to get into a topic such as which product will, you know, what the products will look like.

Speaker #7: But on the the medical cost inflation that observing , , you know , you you're talked about higher because of rising health care just another way costs .

Speaker #7: But on the the medical cost inflation that observing , , you know , you you're talked about higher because of rising health care just another way utilization the the saying of utilization Is that is , well , is it actually higher or it's the same utilization just and it's because it's costing you more kind of a nuanced there .

Speaker #7: And message , you know , what kind of I guess inflation you are factoring into updated assumption ? You know this , up to , you know , 10% a year or something like that ?

Speaker #7: don't I .

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

Speaker #9: Hi , Gabe , it's

Speaker #9: the So yeah , question . for the LTC , for the know Triennial Review LTC , what we saw is a modest favorable impact that's in line that with the experience seen since the last review .

Speaker #9: the So yeah , question . for the LTC , for the know Triennial Review LTC , what we saw is a modest favorable impact that's in line that with the experience seen since the last would have But as you point there were parts .

John Aiken: Thanks for the color, Philip. I'll re-queue.

Philip Witherington: Thanks, John.

Speaker #9: different And if we dive in a little we deeper , have been seeing utilization losses for a number of that we And to your question , that quarters .

Operator 2: Thank you. The next question comes from Alex Scott with Barclays.

Alex Scott: Hi, good morning. Wanted to see if you could talk a little bit more about what you're seeing in some of your Asia markets and, you know, the growth has been pretty good. What's your outlook for, you know, contingent strength of sales over the next couple of years?

Speaker #9: medical is a inflation . So this is something were we on focused and we addressed we've fully observed . what And we are elevated reflecting inflation for a little longer period of also time .

Steve Finch: Yeah. Thanks, Alex. It's Steve Finch here. I can take that. Yeah. As you noted, we've had some strong momentum in results in Asia, as Colin covered. We saw continued solid momentum in sales growth in the quarter, with our new business value metrics up 7% on NBV, 18% up on CSM, new business CSM, which bodes well for our future earnings. We've seen broad-based success across multiple markets, continued strength in the value metrics in Hong Kong. In Asia Other, we had a strong result in our China business as well as continued momentum in Singapore, our Indonesia agency, and as well as our bank partner in the Philippines. We've continued to see broad-based success.

Speaker #9: There were also , point out , parts that led to you positives . We had observed consistent other termination gains , which led to a favorable impact to reserve .

Speaker #9: And we have also reviewed our premium rate , assumption , which increase we remain very conservative and . embedded Less than the 30% of total outstanding ask .

Speaker #7: Got it. And any sense of medical inflation you're assuming cost?

Speaker #9: as I

Speaker #9: we mentioned , did reflect that it would . So like medical cost the has inflation come down since its peak , but it's still slightly elevated .

Speaker #9: We would we reflected that . That would persist a longer to our little longer term view . before And I leave returning with think I would view is higher than general expectations inflation

Speaker #7: .

Speaker #10: you Thank .

Speaker #1: Thank you . And the next question comes from MacKinnon with BMO Tom capital

Speaker #11: Thanks. Good morning. Longer term, Phil, the question is here. Just behind this came up maybe for much of the 2027 targets ago.

Steve Finch: You know, what we see is the market fundamentals and customer demand remain strong and aligned with the strategy that Phil updated on. We're continuing to make the investments for growth, and we're well positioned to capitalize in markets across the region.

Speaker #11: 16 months about You're by standing Is it them . is it really Good new team kind of wanted to refresh it because you've leadership kind of you And I noticed got a new that now you're talking about team .

Alex Scott: That's helpful. Thank you. For the next question, I wanted to ask about your private credit exposure, see if you could put numbers around, you know, some of the different forms of private credit you have. Also just ask if you have any comments just on some of the, you know, some of the comments that have been made by industry participants out there that have been a little more critical of private credit recently.

Speaker #11: balanced kind of growth across the portfolio . I'm just interpreting it . Leave it hear , up to you to paraphrase . But to investing to , you know , grow in Canada and the US , how be should we thinking about that in terms of , you outlook know , share They buybacks ?

Speaker #11: like that's going to be fairly robust . yeah , maybe you can But can address some of those points . I've raised . Thanks for .

Trevor Kreel: Yeah, Alex, it's Trevor. Thanks for the question. Yes, in terms of private credits, just for context, our below investment grade private credit portfolio is around CAD 4 billion. It's a little bit less than about 1% of our general account assets.

Speaker #3: Thanks , Tom . Phil . This is And there's quite a lot in there to unpack . if I So missed something do call me out on it and I'll provide supplement .

Trevor Kreel: It is, the strategy is largely focused on middle market lending to private equity-sponsored companies. It's pretty diverse, by issuer, sector, and sponsor, and we do manage and underwrite these assets in-house. I would say we see our participation as kind of being on the low end of the risk spectrum. Our performance has actually been quite strong, even with COVID, even with the rate increases. The credit expense has actually been, I think well within our loss assumptions. We are actually quite happy with the strategy. In terms of use of private credit, I would say we're always looking at new asset classes to diversify the balance sheet.

Speaker #3: logic for the But strategy the the update , refreshed acknowledge that the strategy we've had for the past served the company eight years has We've been well .

Speaker #3: period of hugely successful transformation , and we felt having what we achieved achieve with the wanted to strategy as the we felt that this was the time to take a fresh I do you know , tremendously said before something that that I've given that the is external right environment continues to evolve , really it's important that the last strategy never static , that we always look at what's changing externally and how do we position the Yes , of course , to deliver on our 2027 targets , but have a is longer time horizon that , when we about setting beyond think up for long term company . success .

Speaker #3: period of hugely successful transformation , and we felt having what we achieved achieve with the wanted to strategy as the we felt that this was the time to take a fresh I do you know , tremendously said before something that that I've given that the is external right environment continues to evolve , really it's important that the last strategy never static , that we always look at what's changing externally and how do we position the Yes , of course , to deliver on our 2027 targets , but have a is longer time horizon that , when we about setting beyond think up for long term company .

Trevor Kreel: I think given the nature of private credit, the ratings, the term, and the fact that it's floating rate, the most natural home for us on the balance sheet is probably our par and adjustable liabilities, where investment experience is passed back to the policyholder. I think we might look to add, you know, a little bit more there, where we thought it was sort of appropriate for the balance sheet.

Speaker #3: you picked So , up on something that's really important and that is growth and having a balanced something organization is that we diversified truly value .

Alex Scott: Okay, thank you.

Speaker #3: It's something that provides resilience . One of the that is things not changing as part of this strategy is that Asia and global wealth and asset management remain compelling opportunities , and growth we will do everything our within means to , to , to fulfill that opportunity .

Operator 2: Thank you. The next question comes from Gabriel Dechaine with National Bank Financial.

Gabriel Dechaine: Good morning. First question is for the GMIM business, the mandatory provident fund, you know, fee changes that they're gonna start having an effect in Q4. We all are aware of this, but you alluded to, you know, some actions you would take, and you contemplated this regulatory change when you laid out your 2027 vision. Maybe you can, you know, shed a bit more light on what some of these offsets are, how impactful they could be, when they could become effective, I guess.

Speaker #3: But at the same time , given the transformation that has been delivered over the course of the past eight years , our new business footprint in both Canada and the US is attractive with generating attractive and we see margins , an opportunity to invest , to grow our new business in the US and Canada , and in particular in the US to to grow new business so that it sustains scale our that , therefore , is the and relevance , I think , to our portfolio overall diversification .

Paul Lorentz: Yeah, thanks, Gabriel. It's Paul Lorentz here. Yeah, just on that, the guidance we provided around about $25 million USD a quarter remains intact once we get through the entire transition. We did transition earlier this month. It will take us some time to decommission systems, obviously reduce our FTE footprint there because we're no longer servicing the business. You'd expect to see some of that come through, that those costs continue into Q1, we would expect most of those to disappear into Q2. In terms of outlook for Q4, we did end the quarter with higher AUMA versus the average. There is a little bit of upside there in terms of.

Speaker #3: We sustain a level of diversification the overall within organization on this topic as well . Our strategy clarifies believe that . We do that it's important to be mega the economies in future .

Speaker #3: And , of the you know , we have a hugely successful business in the US , both on the side and on the Guam insurance side with John Hancock .

Speaker #3: We have a successful scale business in China and where we saw a strategic gap was the scale of our presence in India , and that was really the logic for taking decisive action to enter the India us .

Paul Lorentz: of revenue, but that'd be offset by the EMPF, coming in for 2 months of the quarter. In Q1, we would obviously get the full run rate coming through.

Speaker #3: There are other elements of our won't strategy that I go I just call that being a out in AI and an AI powered organization is important And I think to us .

Gabriel Dechaine: Just to put a finer point, are you expecting to fully offset at some point in the future or not?

Speaker #3: very important to our competitive position . that's And success . But future Tom , you referenced the importance of capital generation , and I do want to emphasize that expect to continue the we strong capital generation that the , the the company has seen recent in .

Paul Lorentz: Yeah, most of the expense actions we took were upfront to try and get ahead of it. That's why we've seen such an improvement in our margin, frankly, leading up to the transition. We were very proactive in terms of not waiting for the transition to happen. We feel we've taken.

Speaker #3: Colin referenced our expectations for years remittances for 2025 . I think that's a good example . $6 billion . comes to capital share deployment and buybacks , highest our priority is unchanged .

Gabriel Dechaine: Okay

Paul Lorentz: most of the costs out, except for those that are remaining, which will disappear in Q1.

Gabriel Dechaine: Okay. Then a question on the actuarial review, which I always am hesitant to ask about because it could get a little bit technical. In the LTC component specifically, this is a familiar pattern. You increase your, you know, morbidity reserves, essentially, and then offset that with future premium increases expected. On the, you know, on the medical cost inflation that you're observing, you talked about higher utilization because of rising healthcare costs. Is that just another way of saying the utilization is Well, is it actually higher or it's the same utilization and it's just costing you more? It's kind of a nuanced message there.

Speaker #3: And organically it business as well sustaining and as growing that's to shareholder dividend . And then for what's left over buybacks strategic M&A are possibilities I will .

Speaker #3: emphasize when it But comes to strategic M&A , the bar is high . And that that means buybacks we expect to continue to be an important form of capital deployment for us .

Speaker #3: I hope that points you raised . Tom .

Speaker #11: No

Speaker #11: Folsom . Thank you so much . covers all the Then and . Oh , congratulations to Mark Constantini as he kind of moves on to next .

Gabriel Dechaine: You know, what kind of, I guess, inflation are you factoring into this updated assumption, you know, up to, you know, 10% a year or something like that? I don't know.

Speaker #11: Next role So all the best .

Speaker #3: Thanks , Tom

Speaker #1: you . The next

Speaker #1: you . The next

Speaker #1: Markets .

Stephanie: Hi again, it's Stephanie. Thank you for the question.

Gabriel Dechaine: You bet.

Stephanie: Yeah, for the LTC, triennial review.

Stephanie: What we saw is a modest favorable impact that's in line with the experience that we would have seen since the last review. As you point out, there were different parts. If we dive in a little deeper, we have been seeing utilization losses for a number of quarter. To your question, that is a result of higher medical inflation. This is something we were focused on, and we fully addressed what we've observed. We are also reflecting elevated inflation for a little longer period of time. There were also, as you point out, other parts that led to positives. We had observed consistent termination gains, which led to a favorable impact to reserve.

Speaker #4: I'm just trying to understand why the shift and what impact did that shift have on earnings in the quarter . core And with all the Asia parts , you know , and the core earnings going forward ?

Speaker #9: Thanks , Doug . It's Stephanie I'll start and see if Colin add . But wants to you're right . So the in terms of the impact of the annual which was favorable review , and led to reduction of 605 million , his

Speaker #9: part of Colin , driven by a change in how we account for this was some health insurance contracts in Hong Kong . We're moving from the PA approach , or call short term insurance , to reserving contract for the lifetime .

Stephanie: We have also reviewed our premium rate increase assumption, which we remain very conservative and embedded less than 30% of the total outstanding ask.

Speaker #9: I'd add since we that IFRS implemented 17 , we we've studying been industry practice , and we found that most accounted for these products over the we're lifetime .

Gabriel Dechaine: Got it. Any sense of what medical cost inflation you're assuming?

Stephanie: As I mentioned, we did reflect that it would, like the medical cost inflation has come down since its peak, but it's still slightly elevated. We reflected that that would persist a little longer before returning to our longer-term view. I think I would leave it-

Speaker #9: now So aligning with this . What this does is we've capitalized all cash flows in the reserve , and we've set up a practice CSM to offset No it .

Speaker #9: The impact to insurance contract liability in terms of impact to Corning for this item, and they're small differences. Timing will be a modest favorable impact.

Gabriel Dechaine: Okay

Stephanie: with our longer-term view is higher than general inflation expectations.

Gabriel Dechaine: Thank you.

Operator 2: Thank you. The next question comes from Tom MacKinnon with BMO Capital.

Speaker #9: And then you ask about impact annual review the of the overall . And Corning due to the favorable we saw increase in an CSM , which will lead to an increase in CSM amortization of approximately 30 million per quarter .

Tom MacKinnon: Yeah, thanks very much. Good morning. Question maybe for Phil here, just the thinking behind this refresh strategy. I mean, you came out with these 2027 targets about 16 months ago. You're standing by them. Is it really a new team? You wanted to kind of refresh it because you've got a new kind of leadership team. I noticed that now you're talking about kind of more balanced growth across the portfolio. I'm just interpreting it, leave it up to you to hear to paraphrase. You know, investing to grow in Canada and the US, how should we be thinking about that in terms of, you know, outlook for share buybacks?

Speaker #4: Per quarter. Okay. And are there any changes being contemplated other?

Speaker #9: At this time , no other with changes of this type being contemplated ?

Speaker #4: Okay . And then just second on the credit side , thanks for the detail on caught my eye But what is , is , you know , it seems like the , the parameter movements caused private credit .

Speaker #4: reversal of credit provisions this quarter . And it was kind of tied in the positive move in , in equity markets . And I everyone can kind of see the positive move in equity markets .

Tom MacKinnon: They still look like that's gonna be fairly robust, but, yeah, maybe you can address some of those points I've raised. Thanks.

Speaker #4: was a But I bit surprised that in equity positive move markets has an impact on the ECL . Or as significant impact on ECL .

Speaker #4: So I just wanted to kind of understand the mechanics there a little bit . Thank you .

Philip Witherington: Thanks, Tom. This is Phil. There's quite a lot in there to unpack, so if I miss something out, please do call me out on it, and I'll provide a supplement. The logic for the refresh strategy update. You know, I do acknowledge that the strategy we've had for the past 8 years has served the company tremendously well. We've been through a period of hugely successful transformation, and we felt having achieved what we wanted to achieve with the last strategy as a leadership team, we felt that this was the right time to take a fresh look.

Speaker #12: Hi , Doug . It's it's for the So question . terms of the yes , in ECL , as you noted , there was a Trevor .

Speaker #12: than the charge than we saw in , in , in Q2 . And just people , ECL to charge remind the is broadly two main components .

Speaker #12: we include those both of components in our definition of of core earnings . As you said Q3 , for majority of the of Thanks driven by benefit this was impact specifically , the from positive the market , impact or the market environment impact , driven by strong equity market .

Philip Witherington: Something that I've said before is that given that the external environment continues to evolve, it's really important that the strategy is never static, that we always look at what's changing externally and how do we position the company, yes, of course, to deliver on our 2027 targets, but have a much longer time horizon beyond that when we think about setting the company up for long-term success. Tom, you picked up on something that's really important, and that is balanced growth. Having a diversified organization is something that we truly value. It's something that provides resilience. One of the things that is not changing as part of this strategy is that Asia and Global Wealth and Asset Management remain compelling growth opportunities, and we will do everything within our means to fulfill that opportunity.

Speaker #12: So just to movement your your guess , to question , so we use a third party model and that third party model generates this basically market environment impact .

Speaker #12: And it includes a variety of metrics . So equity markets is interest one volatility And how etc. rates . those have actually been correlated to credit past .

Speaker #12: So in the that's what the model experience basically doing . It's not a is linear impact . But given the strength of markets and the consistency of that model strength , the obviously and felt that the obviously environment was much , much risky than less it had been in prior quarters .

Speaker #12: leads picked it up release .

Speaker #4: guess the And I equity mean , this obviously was favorable this quarter , but another where this is equity were area to decline .

Philip Witherington: At the same time, given the transformation that has been delivered over the course of the past 8 years, our new business footprint in both Canada and the US is attractive. We're generating attractive margins, and we see an opportunity to invest, to grow our new business in the US and Canada, and in particular in the US, to grow new business so that it sustains our scale. That, therefore, is the relevance, I think, to our overall portfolio diversification. We sustain a level of diversification within the overall organization. On this topic as well, our strategy clarifies that we do believe that it's important to be in the mega economies of the future. You know, we have a hugely successful business in the US, both on the GWAM side and on the insurance side with John Hancock.

Speaker #4: You could see the happen reverse . I guess that's kind of obvious .

Speaker #12: yes , But exactly . Yes , yes , right . that's

Speaker #4: Okay. Thank you very much. Okay.

Speaker #1: Thank you . And the next comes from Paul question with CIBC .

Speaker #13: Yeah . Thanks . Good morning . want to ask about the Hong Kong AP First question I sales . Obviously they were quite strong over the prior four quarters .

Speaker #13: And now a little bit of decline year over a So really what I want I guess to understand is what should we expect over the next few As you quarters .

Speaker #13: continue year . lap some to pretty good comps , do you think you produce in in positive growth or is it going to be similar to this quarter ?

Speaker #13: can there's a bit of a I don't know if you call it a normalization in sales growth .

Philip Witherington: We have a successful scale business in China, where we saw a strategic gap was the scale of our presence in India, that was really the logic for us taking decisive action to enter the India insurance market. There are other elements of our strategy that I won't go into, I just call out that being a leader in AI and an AI-powered organization is important to us, I think that's very important to our overall competitive position and future success. Tom, you referenced the importance of capital generation, I do want to emphasize that we expect to continue the strong capital generation that the company has seen in recent years. Colin referenced our expectations for remittances for 2025. I think that's a good example, CAD 6 billion.

Speaker #6: Yeah . Thanks , Paul . It's it's here . And as , as you noted , the Hong Kong the app was down modestly year over year .

Speaker #6: And that was off as Colin noted earlier , very strong The prior base . point about growth we've we've seen year to date the app is 46% year over year .

Speaker #6: So increased that demonstrates that we've had . In addition , while the declined in the quarter , our value metrics app performed strongly .

Speaker #6: So in Kong , Hong happy with these we were results . Nbv and were up NBCSN 10% and 12% year over year , respectively due was to .

Philip Witherington: When it comes to capital deployment and share buybacks, our highest priority is unchanged, and that's to organically invest in our business as well as sustaining and growing our shareholder dividend. Then for what's left over, buybacks and strategic M&A are possibilities. I will emphasize when it comes to strategic M&A, the bar is high, and that means that buybacks, we expect to continue to be an important form of capital deployment for us. I hope that covers all the points you raised, Tom.

Speaker #6: favorable Some mix . additional health and that we saw And that protection in the quarter . In outlook of in Hong Kong . You know , Q4 was another strong year .

Speaker #6: favorable Some mix . additional health and that we saw And that protection in the quarter . In outlook of in Hong Kong . You know , Q4 was another strong year last We see typically a seasonal variability .

Speaker #6: So we'd expect some drop off in Q4 and again in picking up Q1 . But if I back up to , you know , look at the the underlying fundamentals and look further a bit out than that , you know , the market fundamentals do remain very strong and demand is is our high from customers .

Tom MacKinnon: No, that's that's fulsome. Thank you so much then.

Speaker #6: also see that in Hong Kong We and in Singapore as well . An international financial center . And there's a strong of the funds .

Philip Witherington: Thanks.

Tom MacKinnon: congratulations to Marc Costantini as he kind of moves on to, his next role here. All the best.

Speaker #6: the underlying flow drivers are favorable . And we're making So significant investments in our capabilities support to customers and So as we look out distributors .

Philip Witherington: Thanks, Tom.

Operator 2: Thank you. The next question comes from Doug Young with Desjardins Capital Markets.

Doug Young: Hi, good morning. I'm gonna go back to the actuarial review and, you know, there was a, I think, a change in methodology in Asia, correct me if I'm wrong, from the PAA to the GMM. You know, I think this had a decent positive impact on the CSM. I'm just trying to understand why the shift and what impact did that shift have on core earnings in the quarter and with all the moving parts, you know. The core earnings going forward, Colin, I think you talked a bit about it will have a positive impact. Can you put a finer point on what that positive impact might be?

Speaker #6: over the the medium term , we remain very optimistic about Hong Kong market the .

Speaker #13: Okay , okay . Second question is going back to the strategy refresh . So want to get a better sense of how we should think about the earnings trajectory for Canada and US ?

Speaker #13: When I hear investments in those markets, I think about maybe in the short term, higher expenses as a result of those investments.

Speaker #13: But longer-term growth rates, is that the right interpretation?

Speaker #13: ? Hey ,

Stephanie: Thanks, Doug. It's Stephanie. I'll start and see if Colin wants to add, but you're right. In terms of the impact of the annual review, which was favorable and led to a reserve reduction of CAD 605 million, and a large part of this was driven by a change in how we account for some health insurance contract in Hong Kong. We're moving from the PAA approach, or what you would call short-term insurance contract, to reserving for the lifetime.

Speaker #3: Paul , this Phil , is and thanks for the drill down question there on the strategy . The way I see this . And we only have , it one target when to medium earnings term growth .

Speaker #3: And that's the 10 to 12% core EPs . But my expectation and this is the leadership team's expectation is that each of our segments contribute to that growth .

Speaker #3: And the lens that we've applied in resetting the strategy is really to make it clear that growth will not only come from Asia and global .

Stephanie: I'd add that since we implemented IFRS 17, we've been studying industry practice, and we found that most peers accounted for these products over the lifetime, so we're now aligning with this practice. What this does is we've capitalized all cash flows in the reserve, and we've set up a CSM to offset it. No impact to total insurance contract liability. In terms of the impact to core earnings for this item, there are small timing differences, so there'll be a modest favorable impact. Then you ask about the impact of the annual review overall on core earnings. Due to the favorable impact, we saw an increase in CSM, which will lead to an increase in CSM amortization of approximately CAD 30 million per quarter.

Speaker #3: WAM , the US and Canada will be important contributors to that . And so this is about investing to sustain scale , investing to sustain capital generation , investing to sustain growth rates .

Speaker #3: And I don't want to get too precise or issue any formal guidance . But you know , I think what's reasonable are the sort of we're not looking double digits for Canada and the US , but it's sort of low to mid single digits for for the US and a little higher for Canada .

Speaker #3: But I think we have great businesses in North America . And this strategy really clarifies that . We see those businesses being an ongoing and important part of the overall portfolio .

Speaker #13: Okay . Got it . Thank you .

Speaker #1: Thank you . The next question is from Mario Mendonca with TD securities .

Doug Young: Per quarter. Okay. Is there any other changes being contemplated?

Speaker #4: Good morning . Phil . A related .

Speaker #3: Question .

Speaker #4: when I So reflect back on what the US business was in the past and what it's become , I remember as I suspect , many people on the call do , that the US business was a much broader business .

Stephanie: At this time, there's no other changes of this type being contemplated.

Doug Young: Okay. just second, you know, on the credit side, thanks for the detail on private credit. what caught my eye is, you know, the parameter movements caused a reversal of credit provisions this quarter, and it was kind of tied into the positive moves in equity markets. everyone can see the positive move in equity markets. I was a bit surprised the positive move in equity markets has an impact on the ECL or as significant an impact on the ECL. I just wanted to kind of understand the mechanics there a little bit. Thank you.

Speaker #4: Long term care , universal life , variable annuities , variable universal life . There was a lot on , but it was a messy really business as well .

Speaker #4: So as you think about this refresh in the US is the point that is the goal to drive sales levels in your higher existing product mix or will you return Manulife to its former self with just a much broader product US suite in the

Speaker #3: Mario for the question

Trevor Kreel: Hi, Doug. It's Trevor. Thanks for the question. Yes, in terms of the ECL, as you noted, there was a CAD 44 million release, which was, you know, better than the charge than we saw in Q2. Just to remind people, the ECL charge is broadly two main components. The first one is basically the impact of defaults and rating changes, which you would expect. Then there is secondly this modeled impact, reflecting changes in the broader economic environment. We include both of those components in our definition of core earnings. As you said, for Q3 specifically, the majority of the benefit was driven by this positive impact from the market movement impact or the market environment impact driven by strong equity markets.

Speaker #3: . And let me be really clear up Thank you front . There is no intention in the US or John Hancock to go back to the days of variable annuities and that , you know , higher market types of products .

Speaker #3: What risk we have there are really two elements to our strategy . And I'll on to this . I'll come The what we really thinking about is when we the transformation that reflect on we've delivered in the US over the course of the past 7 to 8 years , is we've we've created differentiation through our focus on behavioral insurance that promotes health and wellness , and that creates differentiation in the market that has enabled to be us successful in what I would say is quite a niche footprint in the high net worth , focusing on the high net worth customer segment .

Trevor Kreel: Just to your, I guess to your question, we use a third-party model, and that third-party model basically generates this market environment impact, and it includes a variety of metrics. Equity markets is one, volatility, interest rates, et cetera, and how those have actually been correlated to credit experience in the past. That's what the model is basically doing. It's not a linear impact, but given the strength of equity markets and the consistency of that strength, the model obviously picked it up and felt that the environment was obviously much, much less risky than it had been in prior quarters, and that leads to the release.

Speaker #3: It's profitable . The business , we write is profitable . The margins are now at a similar level to the margins that we generate .

Speaker #3: On average in question Asia . So the is for us twofold . how do One is we potentially broaden the scope of solutions that we provide to customers ?

Speaker #3: But within our risk appetite . So not going back to where we were ten , 15 , 20 years ago and secondly , how do we take the solutions that we have and enable those solutions to be accessed not only by high net worth individuals , but affluent individuals and families ?

Doug Young: I guess the point is, I mean, this obviously was favorable this quarter, but this is another area where, you know, if equity markets were declining, you could see the reverse happen.

Speaker #3: And emerging high net worth individuals ? So that's really an expansion of the the relevant customer segments that we focus on . And I feel with some of the strategic changes that we're making in the US and the team that we have , we're very well positioned to be able to deliver on that opportunity and sustain our scale earnings and capital generation .

Trevor Kreel: Yeah.

Doug Young: kind of obvious, but.

Trevor Kreel: Yes, exactly. Yes. Yes, that's right.

Doug Young: Okay. Okay, thank you very much.

Operator 2: Thank you. The next question comes from Paul Holden with CIBC.

David Brown: Yeah, thanks. Good morning. First question, I want to ask about the Hong Kong APE sales. Obviously, they were quite strong over the prior 4 quarters and now a little bit of a decline year-over-year. Really, I guess what I wanna understand is what should we expect over the next few quarters as you continue to lap some pretty good comps? Do you think you can produce positive growth in sales, or is it gonna be similar to this quarter? Maybe there's a bit of a, I don't know if you call it a normalization in growth.

Speaker #3: From what is the largest economy in the largest insurance market in the world .

Speaker #4: So does that mean that you stick with your existing product suite couldn't quite figure that ? out I .

Speaker #3: In the near term . We're sticking with our existing product suite and scaling that or moving that into additional customer segments . We are also looking to be fully transparent .

Speaker #3: Mario also looking at opportunities in adjacent products that that help fulfill a wider range of customer needs . But within our risk appetite .

Speaker #3: And we have robust risk disciplines that apply not only in the U.S. but around the world.

Steve Finch: Thanks, Paul. It's Steve here. As you noted, the Hong Kong APE was down modestly year over year, and that was off, as Colin noted earlier, a very strong base the prior year. Your point about growth, we've seen year to date, the APE has increased 46% year over year, so that demonstrates the growth that we've had. In addition, while the APE declined in the quarter, our value metrics performed strongly. In Hong Kong, you know, we were happy with these results. NBV and NBCSM were up 10% and 12% year over year, respectively. That was due to some favorable mix, some additional health and protection that we saw in the quarter.

Speaker #4: Okay , quick follow up question . None of this is free . I see that the efficiency target is no longer formally part of your strategic refresh , but I appreciate that it's still a priority .

Speaker #4: Would it be fair to say that the sub-45% efficiency ratio is something you could sacrifice in the near term in pursuit of this refresh strategy in Canada and the U.S.?

Speaker #4: ?

Speaker #3: Actually , Mario , I we're not withdrawing our sub 45 targets when it comes to efficiency ratio . I expect that to be maintained and going in the other direction on this .

Speaker #3: Yes , we'll be investing in our businesses , but part of our investments at an enterprise level include becoming an AI powered organization .

Speaker #3: And we're already seeing the benefits of our investments and leadership position in AI payoff when it comes to mitigating expense growth and providing an ability for the organization to do more with less .

Steve Finch: In terms of outlook in Hong Kong, you know, Q4 was another strong year last year. We typically see seasonal variability, so we'd expect some drop off in Q4 and picking up again in Q1. If I back up to, you know, look at the underlying fundamentals and look a bit further out than that, you know, the market fundamentals do remain very strong and demand is high from our customers. We also see that in Hong Kong and in Singapore as well, an international financial center, and there's a strong flow of funds. The underlying drivers are favorable, and we're making significant investments in our capabilities to support customers and distributors. As we look out over the medium term, we remain very optimistic about the Hong Kong market.

Speaker #3: so I think there are And forces moving in both directions that will enable us to continue to be efficient .

Speaker #4: That you makes sense . Thank . And Mark , congratulations on a great career there and hope to see you in your new role .

Speaker #3: Smiling. Thanks, Mario.

Speaker #4: Great .

Speaker #1: Thank you . And question is next from Darko Milicic with RBC Capital Markets .

Speaker #4: Hi . Thank you . Good morning . Just a real quick question on corporate bit of noise in there . You actually have a negative CSM Colin , how should I think about this business unit on a go forward basis from a modeling perspective ?

Speaker #3: Hey Doug good to good to hear from you . Corporate . Did was a little bit more was different to the trend . Actually in a large part of that was the withholding tax accrual release that we made in respect of the conquest acquisition .

Speaker #3: But I think going forward , you would expect us to have a result of 300 to $400 million in this line and that reflects further investments and central products .

David Brown: Okay. Second question is going back to the strategy refresh. Want to get a better sense of how we should think about the earnings trajectory for Canada and US. When I hear investments in those markets, I think about maybe in the short term, higher expenses as a result of those investments, but longer-term growth rates. Is that the right interpretation?

Speaker #3: You mentioned the CSM , the negative CSM , that that that is related to our coli our product that we've owned for many years .

Speaker #3: It's really just a intercompany settlement and nothing to nothing to really focus on . It will be next few steady for the quarters .

Speaker #4: Okay . Thank you . And a question for Finch Steve . Steve , the question is really twofold . One is your agent count declining ?

Philip Witherington: Hey, Paul, this is Philip, thanks for the drill-down question there on the strategy. The way I see this, we only have, you know, one target when it comes to medium-term earnings growth, and that's the 10% to 12% core EPS. My expectation, and this is the leadership team's expectation, is that each of our segments contribute to that growth. The lens that we've applied in resetting this strategy is really to make it clear that growth will not only come from Asia and Global WAM, the US and Canada will be important contributors to that. This is about investing to sustain scale, investing to sustain capital generation, investing to sustain growth rates.

Speaker #4: still Maybe you can talk a little bit about what it is you're doing there . And when does it if does it affect sales power .

Speaker #4: then on And top of that , just quickly is there how should we think about the build out of India in terms of of the earnings drag for the next couple of years ?

Speaker #4: Thanks .

Speaker #6: Darko . And on the Thanks , agency you know , side , our focus there , our strategy is building quality and out high professional agency .

Speaker #6: which it's And not really driven by that metric in terms of number of agents . So we you know , if we look at other metrics in terms of , you know , top tier agency , our per app is is agent active growing growth growing our significantly .

Philip Witherington: I don't want to get too precise or issue any formal guidance, you know, I think what's reasonable are the sort of We're not looking double digits for Canada and the US, but it's sort of low to mid-single digits, for the US and a little higher for Canada. I think we have great businesses in North America, and this strategy really clarifies that we see those businesses being an ongoing and important part of the overall portfolio.

Speaker #6: And seen per in agency this year . As we've result of materially . nbv a agent One of the other measures this . there objective is a measure of top tier agencies , million dollar roundtable .

Speaker #6: Manulife was third globally in terms of number of eMDR qualifiers in 24 , and the run rate is , you know , in the in the 20s , 20% for growth tracking through 2025 as well .

David Brown: Got it. Thank you.

Operator 2: Thank you. The next question is from Mario Mendonca with TD Securities.

Mario Mendonca: Good morning. Phil, a related question. When I reflect back on what the US business was in the past and what it's become, I remember, as I suspect many people on the call do, that the US business was a much broader business: long-term care, universal life, variable annuities, variable universal life. There was a lot going on, but it was a really messy business as well. As you think about this refresh in the US, is the goal to drive higher sales levels in your existing product mix, or will you return Manulife to its former self with just a much broader product suite in the US?

Speaker #6: And what we're continuing to do to drive this is we're making investments . And broadly speaking , those investments are training and development .

Philip Witherington: Thank you, Mario, for the question. Let me be really clear up front. There is no intention in the US or John Hancock to go back to the days of variable annuities and that, you know, higher market risk types of products. There are really two elements to our strategy, and I'll come onto this. What we're really thinking about is when we reflect on the transformation that we've delivered in the US over the course of the past seven to eight years, is we've created differentiation through our focus on behavioral insurance that promotes health and wellness. That creates differentiation in the market that has enabled us to be successful in what I would say is quite a niche footprint in the high net worth, focusing on the high net worth customer segment. It's profitable.

Philip Witherington: The business we write is profitable. The margins are now at a similar level to the margins that we generate on average in Asia. The question for us is twofold. One is, how do we potentially broaden the scope of solutions that we provide to customers, but within our risk appetite? Not going back to where we were 10, 15, 20 years ago. Secondly, how do we take the solutions that we have and enable those solutions to be accessed not only by high net worth individuals, but affluent individuals and families and emerging high net worth individuals? That's really an expansion of the relevant customer segments that we focus on.

Philip Witherington: I feel with some of the strategic changes that we're making in the US and the team that we have, we're very well-positioned to be able to deliver on that opportunity and sustain our scale, earnings, and capital generation from what is the largest economy and the largest insurance market in the world.

Mario Mendonca: Philip, does that mean that you stick with your existing product suite? I couldn't quite figure that out.

Philip Witherington: In the near term, we're sticking with our existing product suite and scaling that or moving that into additional customer segments.

Mario Mendonca: Thank you.

Philip Witherington: We are also looking to be fully transparent, Mario, also looking at opportunities in adjacent products that help fulfill a wider range of customer needs, but within our risk appetite. We have robust, risk disciplines that apply not only in the US, but around the world.

Mario Mendonca: Okay, quick follow-up question. None of this is free. I see that the efficiency target is no longer formally part of your strategic refresh, but I appreciate that it's still a priority. Would it be fair to say that the sub 45% efficiency ratio, that's something you could sacrifice in the near term in pursuit of this refresh strategy in Canada and the US?

Philip Witherington: Actually, Mario, we're not withdrawing our sub 45 targets when it comes to efficiency ratio. I expect that to be maintained. Going in the other direction on this, yes, we'll be investing in our businesses. Part of our investments at an enterprise level include becoming an AI-powered organization. We're already seeing the benefits of our investments and leadership position in AI pay off when it comes to mitigating expense growth and providing an ability for the organization to do more with less. I think there are forces moving in both directions that will enable us to continue to be efficient.

Mario Mendonca: That makes sense. Thank you. Marc, congratulations on a great career there, and hope to see you in your new role.

Philip Witherington: He's smiling. Thanks, Mario.

Mario Mendonca: Great. Great.

Operator 2: Thank you. The next question is from Darko Mihelic with RBC Capital Markets.

Darko Mihelic: Hi. Thank you. Good morning. Just a real quick question on corporate. There was a bit of noise in there. You actually have a negative CSM. Colin, how should I think about this business unit on a go-forward basis from a modeling perspective?

Colin Simpson: Hey, Darko Mihelic. Good to hear from you. Corporate was different to the trend actually, and a large part of that was the withholding tax accrual release that we made in respect of the Comvest acquisition. I think going forward, you would expect us to have a result of CAD 300 to 400 million in this line, and that reflects further investments in central products. You mentioned the CSM, the negative CSM. That is related to our COLI product that we've owned for many years. It's really just an intercompany settlement and nothing to really focus on. It will be steady for the next few quarters.

Darko Mihelic: Okay. Thank you. A question for Steve Finch. Steve, the question is really twofold. One is your agent count still declining? Maybe you can talk a little bit about what it is you're doing there and when does it, if does it, affect the sales power? On top of that, just quickly, how should we think about the build-out of India as in terms of the earnings drag for the next 2 years? Thanks.

Steve Finch: Thanks, Darko. On the agency side, you know, our focus there, our strategy is building out high quality and professional agency, which it's not really driven by that metric in terms of number of agents. You know, if we look at other metrics in terms of, you know, top-tier agency, our APE per active agent is growing significantly. Our NBV per agent is also growing materially. We've seen growth in our agency sales this year as a result of this. One of the other objective measures there is a measure of top-tier agents is Million Dollar Round Table.

Steve Finch: Manulife was third globally in terms of number of MDRT qualifiers in 2024, and the run rate is, you know, in the 20s, 20% for growth, tracking through 2025 as well. What we're, you know, continuing to do to drive this is we're making investments. Broadly speaking, those investments are training and development, really investing in our people to be able to recruit high-quality agents, train them very well, develop them into leaders, and create highly professional agents, along with investments in technology and tools, AI tools that are making the agents more efficient, providing better service to our customers, identifying from all the data that we've got on customer interactions what the next best need for the agent would be. We're seeing benefits from these investments.

The, uh, other objective measures there is, uh, a measure of top tier agents is million-dollar Roundtable. Manual Lake was third globally in terms of number of mdrt qualifiers, uh, in 24 and the Run rate is, you know, in the in the 20s 20% for growth uh tracking through uh, 2025 as well. And what we're, you know, continuing to do to drive. This is we're making Investments and broadly speaking. Those Investments are training and development, really investing in our people to be able to recruit high-quality agents trained them very well, develop them into leaders and uh, create highly professional agents along with uh, investments in technology and tools. AI, uh, tools that are making the agents more efficient uh providing uh better service to our customers. Identifying, from all the data that we've got on customer interactions.

Steve Finch: We are pleased with the, you know, what we're seeing come out of these investments in the agency strategy. It is the, you know, the core distribution engine of the franchise rep, representing a little over a third of the sales.

What the next best, uh, need for. The the agent would be and we're seeing benefits from uh, from these Investments. So we are pleased with the, uh, you know what we're seeing come out of these investments in the agency strategy. It's, it's 1 of the core. It is the, you know, the core, uh, distribution engine of the, the franchise rep representing a little over a third of the sales.

Philip Witherington: Steve, did you want to cover the India earnings question?

Steve Finch: Oh, thank you.

Philip Witherington: Okay, you go ahead, Steve.

Steve Finch: Yeah, thanks. As Philip said earlier, you know, we still have a ways to go to get the entity set up. You know, we're not giving those forward projections at this time in terms of financial metrics. We look forward to updating on that in the future.

And Steve, did you want to cover the India earnings question? Okay, you go ahead, Steve.

Philip Witherington: Yeah, that makes sense. Just to supplement, in terms of one financial metric we can provide is, you know, we expect the capital cost of India over the course of the next decade to be around $400 million capital injection. In the first 5 years, that's around $140 to $150 million. I think that helps really to put some parameters around what the overall financial dynamics are. A hugely exciting move for Manulife.

Darko Mihelic: Okay, great. Thank you very much.

Yeah. Thanks. As, as Phil said, earlier, we're, you know, we still have a ways to go to get the entity set up. You know, we're not giving those forward projections at this time, in, in terms of, uh, Financial metrics. But uh, we look forward to updating on that in the future. Yeah. That makes sense. And just to to supplement in terms of once an intro metric, we we can provide it is, you know, we we expect the capital cost of, uh, India over the course of the next decade to be around 400 million US Dollars Capital injection. In the first 5 years that's around 140 to 150 million US Dollars. And I think that helps really to put some parameters around, what the overall Financial Dynamics are, but a hugely exciting move for manual life.

Okay, great. Thank you very much.

Operator 2: Thank you. This concludes the question and answer session. I would like to turn the conference back over to Mr. Hung Ko for any closing remarks.

Thank you. And this concludes the question and answer session. I would like to turn the conference back over to Mr. Kong, ho, 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.

Thank you. Operator will be available after the call. If there are any follow-up questions, have a good day, everyone.

Operator 2: Thank you. This brings to a close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Thank you. This brings to a close today's conference call, May disconnect your lines. Thank you for participating and have a pleasant day.

Mario Mendonca: Please stand by.

Please stand by.