Q3 2025 Manulife Financial Corp Earnings Call

November 13, 2025

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Teleconference over to Mr. Kang Ho Global head of Treasury and Investor Relations. Please go ahead.

Thank you welcome to minimize earnings conference call to discuss our third quarter 2020 financial and operating results as well as our refresh strategy that was announced yesterday afternoon.

Colin Simpson: 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 the third quarter. Net flows were challenged this quarter, resulting in net outflows of $6.2 billion. Our retail business saw net outflows of $3.9 billion related to our North American intermediary and wealth channels, followed by net outflows of $1.6 billion in our retirement business.

Earnings materials, including webcast slides for today's call are available in the Investor Relations section of our website at Manulife Dot com.

Speaker #3: highlight section of unveiled takeaways term , and our total to want to shareholder Maintaining refreshed drive a related strategic on a our growth the well new and opportunities capture We WAM , pleased to continue to be as it long with on our few key resilience and reached an diversified and and I'm global ambition and build brand sources of portfolio that we .

In addition, I would like to note that a video recording of our refreshed strategy presentation and related materials are also available in the same section of our website.

Before we start please refer to slide two for a caution on forward looking statements and slide 33 for a note on a 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 four we will begin today's presentation with fit within <unk>, our president and Chief Executive Officer, who will provide a highlight of our third quarter 2025 results in a strategic update including an overview of our refresh strategy.

Speaker #3: overreliance to provides India , to market , asset pleased return about have conglomerate , Mahindra our to leading I'm . Our agreement expanding Asia whom we and enter the strong and exceptional growth strengthen have an accompanied by maintain WAM excited market and investments to US will be approvals insurance the world continued leadership position in .

Following Phil Collins Simpson, our Chief Financial Officer, we discussed in the company's financial and operating results in more detail.

After their prepared remarks, we will move to the live Q&A portion of the call.

Colin Simpson: 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, and with the close of our third 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. 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 that I'd like to turn the call over to Phil.

Thanks hung and thank you everyone for joining us today before I start I'd like to thank Mark <unk> 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.

Marks two stints with Manulife total more than 25 years and in his most recent role as global head of enforce 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.

Speaker #3: to is AI powered deliberate enhance We will Global in a a product , digital and partnerships to will organization , most become is an the utilize our our partner a .

While we're sad to see him go we know he will flourish as the CEO and we wish him nothing but the best.

Colin Simpson: With regards to EMPF, I can confirm we officially commenced our onboarding to the new platform in Hong Kong on 6 November 2024, and thus expect to reflect an impact to core earnings in our retirement business starting in the fourth quarter. 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. 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.

In Forest management has been embedded as a capability in our organization and it will remain an important enabler of our commercial success.

Speaker #3: Health , and we innovation financial well-being leverage trusted These strengths further enabled our early through superior wealth , and AI engage agents and partners to .

<unk> <unk>, President and CEO of Manulife, Canada has taken on an expanded role and assumed responsibility for enforced management and reinsurance globally, while continuing to lead the Canada segment.

Speaker #3: our become . trusted And of every critical aspect of our and will be winning team execution of for our a joint . in At our 2024 , various key making economy including total return to we engagement Investor Day .

Shifting back to the purpose of today's call yesterday, we announced our third quarter 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.

Speaker #3: am efforts chapter this next Manulife customers , remain confident that our incredibly I strategy strengthen our executing on excited and am on 2027 financial both our about deliver next further decade and .

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.

Colin Simpson: 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. 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.

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: Moving on to our quarterly sustain our seven , which our which continued focus on execution and slide and net demonstrate the strength and our diversity of businesses , generated strong insurance , new business we indicators this quarter delivering will delivering with growth strategy performance segment growth for the new business .

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.

Speaker #3: greater in insurance clear each CSM evidence of our providing future potential earnings , while global reflect WAM net experienced $6.2 billion , course , which Colin will discuss in more through detail of It positive operating leverage with margin expansion year shortly .

We continue to be well positioned to capture the exceptional growth opportunities across Asia, and global Wang 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 regular.

<unk> approvals.

Mahindra is an incredibly strong and trusted partner with whom we have an existing asset management relationship and I'm excited about expanding our partnership further.

Colin Simpson: Business remains strong and positions 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's worth noting our overall LTC insurance experience was once again modestly positive, including favorable incidents reported in the CSM. 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.

Our continued focus on Asia, and global Wang will be accompanied by deliberate investments to enhance and strengthen our leadership position in our home market and maintain a scaled presence in the U S, which remains the largest insurance market and the largest economy in the.

Speaker #3: earnings strong and core about contributed to . Core ROE Our third quarter 18.1% , core demonstrating that of plus reach , our remain by 2027 is business Colin will we'll .

Speaker #3: target balance sheet deliver on strong Our Likert with a ratio of leverage and we it generated 138% and a 22.7% , another ROE share growth with an increase of 7% from the prior quarter of ratio year .

World.

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 wellbeing. These.

Speaker #3: While book continuing to value per of significant amount shareholders a . On capital to eight . to slide like to dive deeper into I'd recent performance of our potential businesses , particularly and Global WAM , as they a little critical return elements of our enterprise remain .

These efforts will be further enabled through superior distribution, making it easier for customers agents and partners to engage with us and of course throughout winning team and culture, which is critical to every aspect of the execution of our strategy.

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

Colin Simpson: As Phil mentioned in our 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. Let's now move to our balance sheet on slide 18. Our LICAT ratio remains strong at 138%, providing a $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.

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.

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.

Speaker #3: another had outstanding quarter of growth , delivering a 29% year on year in core increase to a record earnings . Our Nbv margin also level remained resilient , improving year on year backed by the to 39% , solid growth Asia business during the in global WAM , we also delivered level of record core earnings , a quarter another strong maintaining growth .

And sustain our growth for the next decade and beyond.

Moving onto our quarterly results on slide seven which reflects 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 and new business CSM, providing clear evidence of our future earnings potential.

Colin Simpson: 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, 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. 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 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. This concludes our prepared remarks.

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

While global Wham experienced net outflows of $6 $2 billion, which Colin will discuss in more detail. Shortly it continued to generate positive operating leverage with margin expansion year over year.

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 Wang and Canada segments, along with other factors, which Colin will talk about further.

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

Our strong core earnings generation contributed to third quarter core ROE of 18, 1% demonstrating that our core ROE target of 18% plus by 2027 is within reach and we remain confident that we'll deliver on it.

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

Colin Simpson: Before we move to the Q&A session, I would like to remind each participant to adhere to a limit of two questions, including follow-ups, and to re-queue if they have additional questions. Operator, we will now open the call to questions. 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 throw your question, please press star, then two. The first question comes from John Aiken with Jefferies. Good morning, Phil. I'm very intrigued about the venture that you announced in India.

Our balance sheet remains strong with a light cat ratio of 138% and a leverage ratio of 22, 7% and 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.

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

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

Capital to shareholders.

Onto slide eight I'd like to dive a little deeper into the recent performance of our high potential businesses, particularly Asia and global Wham is they remain critical elements of our refreshed enterprise strategy.

Speaker #3: CSM and new business value, respectively, in new growth business CSM was a strong segment in insurance, with a 25% increase, each delivering growth of greater than 15% compared to the year quarter.

Speaker #3: the prior In total fact , our new business increased over 20% year over CSM the fifth consecutive Further year for highlighting the strength of our diversified quarter .

Over the past several years, both segments demonstrated strong track record of generating consistent growth and resilience through a volatile operating environment.

Colin Simpson: I was hoping you might be 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 bring to the table in what I believe is a very competitive marketplace, and finally, the regulatory approval process. How long do you think that'll take before you can actually open shop for business? Well, John, this is Phil. Thanks for the question and the first question today. 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 performance from both Asia and global one is meant that on a year to date basis, our highest potential businesses are contributing 76% of core earnings exceeding our 2025 target of 75%.

Speaker #3: providing and encouraging read through to the earnings future potential business . Headwinds in North American retail and our US retirement channel led to net of each outflows $6.2 billion for global WAM , following six consecutive quarters of positive net flows in our retail business .

Speaker #3: of to continued This in the pressure intermediary and wealth While the channels . headwinds in our business were retirement markets as anticipated elevated level absolute participant on to in resulted .

Asia had another outstanding quarter of growth delivering a 29% year on year increase in core earnings to a record level.

Our MBV margin also remained resilient improving year on year to 39% backed by the solid growth in new business during the quarter.

Speaker #3: higher main slide Moving when drivers compared to the earnings 11 , which period same last year , we continued to see growth in our insurance businesses in Asia and Canada , which contributed to withdrawals a higher service insurance result .

And global Wham, 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 and our focus on disciplined growth with proactive expense management enabled us to continue to.

Colin Simpson: 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. 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.

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

<unk> positive operating leverage and steadily increase our core EBITDA margin, which expanded by 310 basis points year on year to 39% this quarter.

Speaker #3: I would note that US experience insurance improved previous from the quarter , though even claims severity remains somewhat elevated on a small number of policies in contrast with last favorable year's experience .

These are great results and as I reflect on the future on what comes next I'm confident that our refresh 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.

Speaker #3: Moving down on the Dau table , you note a year over year net investment result , mainly a due to release in the expected credit loss improvement in our or ECL provision driven by updates to our parameters and models .

With that I'll hand, it over to Colin to discuss our quarterly results in more detail.

Speaker #3: with an increase in Compared the provision in the prior year . Note that we continue to expect an ECL charge of 30 million to $50 million per quarter on average , and year date , to the ECL increase in is $86 million post-tax , excluding the impact of the ECL .

Colin.

Thanks for the third quarter was indeed, a strong quarter for Manulife, where we continued to demonstrate the ongoing strength quality and resilience of our business.

Colin Simpson: 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 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. I look forward to providing updates along the way. Thanks for the coverage, Phil. I'll re-queue. Thanks, John. Thank you. The next question comes from Alex Scott with Barclays. 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, and the growth has been pretty good.

Let's begin on slide 10, where we talk about our growth in the quarter.

Speaker #3: have Our been compared with prior 6% year . Global WAM to be a significant contributor the core earnings and reported a 19% growth in pre-tax core earnings this quarter .

The momentum in our insurance new business performance continued in the third quarter, our AP 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 for SUNS and 11% growth in new business, CSM and new business value respectively.

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

<unk>.

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.

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

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

Colin Simpson: What's your outlook for contingent strength of sales over the next couple of years? 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, as well as our bank partner in the Philippines. We've continued to see broad-based success. What we see is the market fundamentals and customer demand remain strong.

Read through to the future earnings potential of each business head.

Headwinds in North American retail in our U S retirement channel led to net outflows of $6 $2 billion for global one following six consecutive quarters of positive net flows.

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

In our retail business. This was primarily due to continued pressure in the intermediary and wealth channels, while the headwinds in our U S retirement business, we anticipated as elevated markets resulted in higher absolute level of participant withdrawals.

Moving on to slide 11, which summarizes the main earnings drivers when compared to the same period last year.

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

We continued to see growth in our insurance businesses in Asia, and Canada, which contributed to a higher insurance service results. We also saw a net favorable impact from the annual actuarial review of methods and assumptions or basis change during the quarter.

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

Although this was partially offset by unfavorable claims experienced in the U S. I would note that U S 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: net favorable impact of a $605 million decrease in overall pre-tax fulfillment cash flows , which comprised a The $1.1 billion increase in CSM , partially offset by a modest decrease in income net of $216 million .

Colin Simpson: 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. 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 some of the different forms of private credit you have, and also just ask if you have any comments on some of the comments that have been made by industry participants out there that have been a little more critical of private credit recently. Yeah, Alex, it's Trevor. Thanks for the question. Yes, in terms of private credit, 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. The strategy is largely focused on middle-market lending to private equity-sponsored companies.

Moving down on the Doa table, you will note a year over year improvements in our net investment results, mainly due to a release in may expected credit loss or ECL provision driven by updates to our parameters models compared with an increase in the provision in the prior year.

Speaker #3: tax , as Post well as a small impact to OCI . I would also note that the overall impact of the LTC study was slightly favorable , largely driven by favorable rebate experience assumed future , and premium rate increases , as well as updates to reflect higher , partially terminations offset by higher utilization of benefits given higher cost of , the increases care the included premium amounts tied to future as well as risks , approvals prior in excess of our assumptions illustrating our conservatism in embedding these into our reserves .

Note that we continue to expect an ECL charge of 30 million to $50 million per quarter on average and year to date the increase in ECL is $86 million post tax.

Excluding the impact of the ECL all core earnings growth would have been 6% compared with the prior year.

Global one continues to be a significant contributor to our core earnings and reported a 19% growth in pretax core earnings this quarter, you'll notice the lower income tax amount. Despite the growth in our core earnings. This is mainly driven by an adjustment to our year to date withholding tax accrual reflecting.

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

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

The use of our internal funding for the Comverse acquisition.

Colin Simpson: 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, and the credit experience 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. 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 in the balance sheet is probably our PAR and adjustable liabilities, where investment experience is passed back to the policyholder.

Finally, I would also add that the most recent U S reinsurance transaction with RGA reduced our core earnings by $12 million across multiple lines of the Doa.

Speaker #3: a very strong prior year comparable app sales Despite increased 5% from the prior year , led growth in Asia . by strong Other .

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.

Speaker #3: While sales Hong Kong 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 With new business metrics .

In fact, even after adjusting for ECL, we saw strong growth of 11%.

We reported $1 $8 billion of net income this quarter, which reflects neutral market experience, we're at $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 are older.

Speaker #3: and new business value increasing 18% and 7% , respectively . All of this , together with improved product mix , drove margin expansion from the Nbv prior year of 2.5 points percentage to 39% .

Colin Simpson: I think we might look to add a little bit more there where we thought it was sort of appropriate for the balance sheet. Okay, thank you. Thank you. The next question comes from Gabriel Dechaine with National Bank Financial. Good morning. First question is for the, yeah, the GNYM business, the mandatory provident fund fee changes that are going to start having an effect in Q4. We all are aware of this, but you alluded to some actions you would take, and you contemplated this regulatory change when you laid out your 2027 vision. Maybe you can shed a bit more light on what some of these offsets are, how impactful they could be, when they could become effective, I guess. Yeah, thanks, Gabriel. It's Paul Lorentz here.

Performance was primarily impacted by lower than expected returns on private equity and commercial real estate investments as well as our timber assets, reflecting our recent decline in commodity prices.

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

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

During the quarter. We also completed our annual basis change, which included our comprehensive Triennial review of our U S long term care business or LTC. The basis change resulted in a net favorable impact of a $605 million decrease in overall pretax fulfillment cashflows, which.

Speaker #3: global WAM on slide 14 , global WAM build on its growth momentum , delivering record level core earnings with a solid 9% increase year on year .

Comprised of $1 $1 billion increase in CSM, partially offset by a modest decrease in net income of $216 million post tax as well as a small impact to OCI.

Speaker #3: This was supported again 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 .

I would also note that the overall impact of the LTC study was slightly favorable largely driven by favorable rewrites 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.

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

Colin Simpson: 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, those costs continue into Q1, and 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, so there is a little bit of upside there in terms of revenue, but that'd be offset by the EMPF coming in for two months of the quarter. In Q1, we would obviously get the full run rate coming through.

Speaker #3: Net flows were challenged this quarter , resulting in net outflows of $6.2 billion . Our retail business net outflows saw of $3.9 billion related to our North American intermediary , and while channels followed by net outflows of $1.6 billion in our retirement business here , we saw higher outflows due to market appreciation as people generally higher had account balances , which in ordinary course withdrawals also being higher .

The premium increases included amounts tied to future asks as well as approvals in excess of our prior assumptions illustrating our conservatism and embedding these into our reserves.

It is important to note the favorable net impact from the basic change further validates the prudence of our reserves.

Speaker #3: Our resulted institutional business modest net also saw outflows of $0.7 billion . And with the close of our third 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 .

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.

Colin Simpson: Just to put a finer point, are you expecting to fully offset at some point in the future or not? 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 most of the costs out except for those that are remaining, which will disappear in Q1. Okay. A question on the actuarial review, which I always am hesitant to ask about because it could get a little bit technical, but in the LTC component specifically, there's a familiar pattern. You increase your morbidity reserves essentially and then offset that with future premium increases expected.

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

Moving to the segment results, we'll start with Asia on Slide 13, we generated solid growth across all new business metrics. Despite a very strong prior year comparable.

<unk> sales increased 5% from the prior year led by strong growth in Asia other.

Speaker #3: By our backed continued proactive expense management, I can officially confirm we commenced our onboarding to the new platform in Kong on November 6th and expect this to reflect an impact on our core earnings in the retirement business.

While Hong Kong sales decline year on year compared to 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.

Speaker #3: Starting in the fourth quarter . Next , let's head over to Canada on slide 15 , where we another quarter of delivered solid results .

All of this together with improved product mix drove MBV margin expansion from the prior year of 2.5 percentage points to 13, 9%.

Speaker #3: sales AP increased 9% from the prior year , reflecting continued double digit growth in our individual insurance business , primarily due to higher pass sales .

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 basis change and improved insurance experience as well as our release in the ECL provision compared with an increase in the prior year quarter.

Speaker #3: Our individual insurance business was the key contributor to a strong new business , growth CSM 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 business insurance favorable insurance experience in individual insurance .

Colin Simpson: 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? Because it's kind of a nuanced message there. What kind of, I guess, inflation are you factoring into this updated assumption of up to 10% a year or something like that? I don't know. Hi, David. It's Stephanie. Thank you for the question. Yeah, for the LTC triennial review, 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 quarters.

Uh huh.

Over to global Lam on slide 14.

Speaker #3: The basis provided additional change uplift , but these drivers were partially and 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 AP sales growth fueled of 51% , higher broad by based demand for our suite of products .

Global <unk> 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 <unk>.

And high 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 the third quarter.

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 .

Net flows were challenged this quarter, resulting in net outflows of $6 $2 billion, a retail business saw net outflows of $3 $9 billion related to our north American intermediary in wealth channels.

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

Colin Simpson: 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. We have also reviewed our premium rate increase assumption, which we remained very conservative and embedded less than 30% of the total outstanding ask. Got it. Any sense of what medical cost inflation you're assuming? As I mentioned, we did reflect that 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.

Good by net outflows of $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.

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

So being higher.

Our institutional business also saw modest net outflows of <unk> $7 billion and with the close of a third 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: Looking beyond our earnings, it's worth noting our overall LTC insurance experience was once again modestly positive, including favorable incidents reported in the CSM.

Despite the challenges in our net flows we delivered another quarter of positive operating leverage with core EBITDA margin of 39%, which expanded 310 basis points from the prior year or 80 basis points sequentially backed by our continued proactive expense management.

Speaker #3: to our Bringing you value on book slide 17 . Even after returning nearly $4 billion of capital to shareholders year to date through dividends and share buybacks , we continue 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 .

With regards to E. M. P. F. I can confirm we officially commenced the onboarding to the new platform in Hong Kong on November six and thus expect to reflect an impact to core earnings in our retirement business starting in the fourth quarter.

Colin Simpson: I think I would leave it with our longer-term view is higher than general inflation expectations. Thank you. Thank you. The next question comes from Tom MacKinnon with BMO Capital. 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 here to paraphrase. Investing to grow in Canada and the US, how should we be thinking about that in terms of outlook for share buybacks?

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

Next lets head over to Canada on Slide 15, where we delivered another quarter of solid results.

AP sales increased 9% from the prior year, reflecting continued double digit growth in our individual insurance business, primarily due to higher pass sales our individual insurance business was the key contributor to our strong new business CSM growth of 15% year on year as our group insurance business does not generate CSM.

Speaker #3: During the period . And as Phil mentioned in our 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 .

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

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 and.

Speaker #3: 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% .

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Speaker #3: 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 .

Lastly, our U S segments results on slide 16 in the U S. We delivered another quarter of strong 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.

Colin Simpson: They still look like that's going to be fairly robust. Yeah, maybe you can address some of those points I've raised. Thanks. Thanks, Tom. This is Phil. There's quite a lot in there to unpack. If I miss something out, please do call me out on it, and I'll provide a supplement. The logic for the refreshed strategy update, I do acknowledge that the strategy we've had for the past eight years has served the company tremendously well. We've been through a period of hugely successful transformation. 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 #3: And finally , moving to slide 19 , which progress our against 2027 and medium summarizes the targets . I'm pleased with our overall performance this quarter .

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

Core earnings decreased 20% year on year, primarily due to unfavorable life insurance claims experience this quarter compared with favorable experience 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.

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

Experience in our life business.

While large claims variability presented challenges the fundamentals of our U S business remained strong and position us well for steady earnings and the long term our confidence is reinforced by the sequential improvements in core earnings and the continued strong growth in our new business metrics, this quarter, which bodes well for our future earnings and.

Colin Simpson: 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.

Segment.

Looking beyond our earnings it's worth noting our overall LTC insurance expense was once again modestly positive, including favorable incidents reported and the CSM.

Bringing to a book value on slide 17, even after returning nearly $4 billion of capital to shareholders year to date through dividends and share buybacks. We continue 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, 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 during the period.

Colin Simpson: 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. 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. We have a hugely successful business in the US, both on the GM side and on the insurance side with John Hancock.

And as Phil mentioned, and our refreshed strategy update we expect our remittances for 2025 to be approximately $6 billion, putting us well on our way to achieving a cumulative 2027 target of at least $22 billion.

Let's now move to our balance sheet on slide 18, Unlike cat ratio remained strong at 138%, providing a $26 billion buffer above the supervisory target ratio, our financial leverage ratio improved sequentially as well as year on year stunning at 22, 7% and remaining well below.

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.

Colin Simpson: 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, but 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.

And finally, moving to slide 19, which summarizes the progress against our 2027, our medium term targets I'm 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 in all the performance.

This quarter, we also generated core ROE of 18, 1% with a meaningful expansion of one five percentage points year on year.

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 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.

Colin Simpson: 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. 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. 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. No, that's awesome. Thank you so much, then. Oh, and congratulations to Marc Costantini as he kind of moves on to his next role here. All the best. Thanks, Tom. Thank you. The next question, Doug Young with Gabriel Dechaine Capital Markets. Hi, good morning. I'm going to go back to the actuarial review.

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 two questions, including follow ups and to re queue. If there are additional questions. Operator, we will now open the call to questions.

Yes. Thank you we will now begin the question and answer session.

Joining the question queue you May Press Star then one on your telephone keypad.

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If youre using a speakerphone please pick up your handset before pressing in any case.

Yes. Thank you we will now begin the question and answer session.

Your question. Please press Star then two.

And the first question comes from John Aiken with Jefferies.

To join the question queue you May Press Star then one on your telephone keypad.

Good morning, Phil I'm, very intrigued with the venture that you're announcing India.

We'll hear tone acknowledging your request if you're using a speaker phone feature of your handset before pressing any case withdraw. Your question. Please press Star then two.

Was hoping you might be able to give us some more details in terms of what type of products, you think youre going to be offering what what you bring to the table.

Colin Simpson: There was, I think, a change in methodology in Asia, correct me if I'm wrong, from the PAA to the GMM. I think this had a decent positive impact on the CSM. I'm just trying to understand why the shift and what impact that shift had on core earnings in the quarter, and with all the moving parts, 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? Thanks, Doug, Stephanie. I'll start and see if Colin wants to add, but you're right.

And the first question constant John Aiken with Jefferies.

And what I believe is a very competitive marketplace and then finally the <unk>.

Good morning, Phil I'm very intrigued with the venture that you announced in India.

Geo Tory accrual process, how long do you think that will it take before you can actually open shop in shop for business.

Was hoping you might be able to give some more details in terms of what type of products, you think youre going to be offering what you know what you bring to the table.

So John this is Phil Thanks for the question on the first question today is 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 in India market entry from an insurance perspective for many years and has been really ebbs.

And what I believe a severe competitive marketplace and then finally, the regulatory approval process. How long do you think that will it take before you can actually open.

Open charter business.

Well John this is Phil Thanks for the question on the first question today is suddenly 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 in India market entry from an insurance perspective for many years and has been really.

Surfing the environment to wait for the right moment and what we've seen in recent years is that the regulatory environment has moved favorably the digital infrastructure within India has moved up very favorably that's been consistent economic growth and market maturity within the insurance sector as well is that there has been a.

Colin Simpson: In terms of the impact of the annual review, which was favorable and led to a reserve reduction of CAD 605 million, 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. 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. 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.

Observing the environment to wait for the right moment and what we've seen in recent years is that the regulatory environment has moved favorably the digital infrastructure within India has moved up very favorably that's been consistent economic growth and market maturity within the insurance sector as well is that there has been.

Notable increase in wealth across the NDA population and that creates insurance needs and provides an ability to purchase insurance products and I think iridium important component of our entry strategy here is really moving with the right partner and Mahindra.

A notable.

Increase in wealth across the India population and that creates insurance needs and provides an ability to purchase insurance products and I think iridium potent component of our entry strategy here is really moving with the right partner and Mahindra who's been a partner on the asset.

Who has been our partner on the asset management side. Since 2020 is a fantastic partner and has not only substantial local knowledge that a strong brand as well as a distribution infrastructure. So in terms of some of the specific questions that you ask them, what we bring to the table we bring.

Syed since 'twenty 'twenty is a fantastic partner and has not only substantial local knowledge that a strong brand as well as a distribution infrastructure. So in terms of some of the specific questions that you ask them, what we bring to the table, we bring our global expertise.

Our global expertise in the insurance sector to this partnership and it's it's not only about product development, but it's also an aspects such as risk management, which is so important to managing insurance businesses, it's too early to get into topics, such as which which product will.

Colin Simpson: 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 $30 million per quarter. Per quarter. Okay. Is there any other changes being contemplated? At this time, with no other changes of the site being contemplated. Okay. Just second on the credit side, thanks for the detail on private credit, but what caught my eye is it seems like the parameter movements caused a reversal of credit provisions this quarter, and it was kind of tied into the positive move in equity markets.

He's in the insurance sector to this partnership and it's it's not only about product development, but it's also an 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 which products will you know what the products will look.

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 and I look forward to providing updates along the way.

Like I expect it would 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 and I look forward to providing updates along the way.

Thanks for the color to all Richard Thanks, Joan.

Thank you and the next question comes from Alex Scott with Barclays.

Hi, good morning.

Colin Simpson: I kind of, everyone can see the positive move in equity markets, but I was a bit surprised that 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. 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 better than the charge 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.

Could you talk a little bit more about what youre seeing in some of your Asian markets and get the growth has been pretty good with what's your outlook for a continued strength of sales over the next couple of years.

Thanks for the color ill re queue.

Thanks, John.

Thank you and the next question comes from Alex Scott with Barclays.

Yes, Thanks, Alex it's Steve Finch here I can take that yeah. As you noted we've we've had some strong momentum in <unk> and.

Hi, good morning.

Can you talk a little bit more about what youre seeing in some of your Asian markets and get the growth has been pretty good with what's your outlook for a continued strength of sales over the next couple of years.

And results in Asia as Collin covered.

We saw continued solid momentum in sales growth in the quarter with our new business.

Yeah. Thanks, Alex It said, Steve Finch here I can take that yeah. As you noted we've we've had some strong momentum in <unk> and results in Asia as Collin covered.

<unk> metrics up 7% on NPV, 18%.

Our bond CSM, new business, CSM, which bodes well for our future earnings.

We saw continued solid momentum in sales growth in the quarter with our new business value metrics up 7% on NPV, 18%.

And we've seen broad based success across multiple markets continued strength in the value metrics in Hong Kong and then in Asia. Other we had we had.

Colin Simpson: 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. 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. It includes a variety of metrics. Equity markets is one, volatility, interest rates, etc., 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 less risky than it had been in prior quarters, and that leads to the release.

A binding CSN, new business, CSM, which bodes well for our future earnings and we've seen broad based success across multiple markets continued strength in the value metrics in Hong Kong and then in Asia. Other we had we had a.

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 it.

In the Philippines. So we've continued to see broad based success and what we see is the the market fundamentals and customer demand remains strong and aligned with the strategy that Phil updated on we're continuing to make the investments for.

Strong results 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. So we've continued to see broad based success and what we see is the the market.

For growth and we're well positioned to capitalize in markets across the region.

Fundamentals and customer demand remains strong and aligned with the strategy that Phil updated on we're continuing to make the investments.

That's helpful. Thank you.

Colin Simpson: I guess the point is, I mean, this obviously was favorable this quarter, but this is another area where if equity markets were to decline, you could see the reverse happen. I guess that's kind of obvious. Yes, exactly. Yes, yes, that's right. Okay. Thank you very much. Thank you. The next question comes from Paul Holden with CIBC. Yeah, thanks. Good morning. First question, I want to ask about the Hong Kong APE sales. Obviously, they were quite strong over the prior four quarters and now a little bit of a decline year over year. Really, I guess what I want to understand is what should we expect over the next few quarters as you continue to lay out some pretty good comps?

Next question I wanted to ask about your private credit exposure to see if you could put numbers around it.

Our growth and we're well positioned to capitalize in markets across the region.

Some of the different forms of private credit you have been in.

I also just ask if you have any comments just on some of the.

That's helpful. Thank you.

Some of the comments that have been made by our industry.

Next question I wanted to ask about your private credit exposure to see if you could put numbers around it.

Industry participants out there that have been a little more critical of private credit recently.

Some of the different forms of private credit you have and it also just ask if you have any comments just on some of the.

Hey, Alex it's Trevor Thanks for the question so yes in terms of private credits.

Just for context, our below investment grade private credit portfolio is around 4 billion Canadian it's a little bit less than about 1% of our general account assets. It is the <unk>.

Yes, some of the comments that have been made by our industry participants out there that have been a little more critical of private credit recently.

Strategy is largely focused on middle market lending to private equity sponsored companies.

Hey, Alex it's Trevor Thanks for the question so yes in terms of private credits.

It's pretty diverse by sure sector in sponsor and we do manage and underwrite these assets in house.

Just for context, our below investment grade private credit portfolio is around 4 billion Canadian it's a little bit less than about 1% of our general account assets. It is the strategy is largely focused on middle market lending to private equity sponsored companies.

Colin Simpson: Do you think you can produce positive growth in sales, or is it going to be similar to this quarter, or maybe there's a bit of a, I don't know if you call it a normalization in growth? Yeah, thanks, Paul. It's Steve here. As you noted, the Hong Kong APE was down modestly year over year. 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. 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, we were happy with these results. NBV and NBCSM were up 10% and 12% year over year, respectively.

I would say, we see a participation as kind of being on the low end of the risk spectrum. Our performance has actually been quite strong even with COVID-19, even with the rate increases and the credit experience has actually been.

It's pretty diverse by sure sector in sponsor and we do manage and underwrite these assets in house.

I think well within our loss assumptions. So we are actually quite happy with the strategy.

In terms of use of private credit I I would say, we're always looking at new asset classes to diversify the balance sheet I think given the nature of private credit the ratings the term.

And in fact that is floating rate.

The most natural home for us and our balance sheet is probably on par and adjustable liabilities were investment experiences pass back to the policyholder. So I think we might look to add.

In terms of use of private credit I I would say, we're always looking at new asset classes to diversify the balance sheet I think given the nature of private credit the ratings the term and the fact that it's floating rate.

You know a little bit more than where we thought it was sort of appropriate for the balance sheet.

Yeah.

The most natural home for us and our balance sheet is probably on par and adjustable liabilities, where investment experiences pass back to the policyholders. So I think we might look to add.

Okay. Okay.

Thank you next question comes from Gabrielle Duchaine with National Bank financial.

Colin Simpson: That was due to some favorable mix, some additional health and protection that we saw in the quarter. In terms of outlook in Hong Kong, Q4 was another strong year last year. We typically see seasonal variability, so we'd expect some drop-off in Q4, picking up again in Q1. If I back up to look at the underlying fundamentals and look a bit further out than that, 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. Okay.

Good morning.

A little bit more there are where we thought it was sort of appropriate for the balance sheet.

First question is for the.

Yeah, the <unk> business, the mandatory Provident fund.

Okay. Thank you.

Feed changes.

Thank you and that's restaurants and coffee out of shame with National Bank financial.

But are they going to start having an effect in Q4.

So we all are aware of this but you alluded to some actions you would take.

Good morning, <unk> first question is for the.

Oh, yeah. The G O M business the mandatory Provident fund the feed changes the rig that are they're going to start having an effect in Q4.

It contemplated this regulatory change when you laid out your 2027, originally maybe you can shed a bit more light on what some of these ups offsets or how impactful it could be when they could become.

So we all are aware of this but you alluded to some actions you would take Oh and you contemplated this regulatory change when you laid out your touring 27th vision. Maybe you can you know should a bit more light on what some of these ups offsets or how impactful it could be when they could become a.

Effective I guess.

Yes, thanks, Gabriel its tolerance here, yeah, just on that.

The guidance, we provided the round for $25 million.

U S D. A quarter remains remains intact once we get through the entire transition. So we did transition earlier. This month that will take us some time to decommission systems, obviously reduce our FTE footprint there because we're no longer servicing that business. So you would expect to see some of that come through that those costs continue into Q1, and then we would expect most of those.

Effective August.

Yes. Thank you Gabriel its polar ounce here, yeah, just on that.

The guidance, we provided a round about $25 million.

Colin Simpson: Second question is going back to the strategy refresh. I want to get a better sense of how we should think about the earnings trajectory for Canada and the US. I want to 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? Hey, Paul, this is Phil. Thanks for the drill-down question there on the strategy. The way I see this, I mean, we only have 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.

U S D. A quarter remains remains intact once we get through the entire transition. So we did transition earlier. This month that will take us some time to decommission systems, obviously reduce our F. T footprint there because we're no longer servicing the business. So you would expect to see some of that come through that those costs continue into Q1, and then we would expect most of those.

Disappear into Q2.

In terms of outlook for Q4, we did end the quarter with higher <unk> versus the average. So there is a little bit of upside there in terms of of revenue, but that would be offset by the MTF coming in for two months of the quarter and then in Q1, we would obviously get the full run rate coming through.

Disappear into Q2.

In terms of our outlook for Q4, we did end the quarter with higher a M. A versus the average so there is a little bit of upside there in terms of.

So just to put a finer point are you expecting to fully offset at some point in the future or.

Revenue, but that would be offset by the E. M. P F coming in for two months of the quarter and then in Q1, we would obviously get the full run rate coming through.

Or not yeah. So most most of the 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. So we are very proactive in terms of not waiting for the transition to happen. So we feel we've taken most of the most of the costs out except for those that are remaining which will disappear in Q1.

So just to put a finer point are you expecting to fully offset at some point in the future or.

Or not.

Yeah. So most most of that 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. So we were very proactive in terms of not waiting for the transition to happen. So we feel we've taken most of the most of the costs out except for those that are remaining which will disappear in Q1.

Colin Simpson: 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 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. I don't want to get too precise or issue any formal guidance, but 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. Got it. Thank you. Thank you. The next question, Mario Mendonca with TD Securities.

Okay.

And then a question on the actuarial review, which I always hesitant to ask you about because it could get a little bit technical but and the LPC components specifically.

This is a familiar pattern you increase your morbidity reserves essentially and then.

Okay.

Then a question on the actuarial review, which I always hesitant to ask about because it could get a little bit technical but and the L. P. C components, specifically Oh, there's a familiar pattern you increase your morbidity reserves essentially in in offset that with future.

Offset that with future premium increases expected.

But on the.

On the medical cost inflation that you're observing you talked about higher utilization because of rising healthcare cost is that just another way of saying the utilization of well is actually higher or at the same utilization and it's just coughing anymore, because it's kind of a nuanced message there.

Premium increases expected, but on the you know.

Now on the medical cost inflation that you're observing you talked about higher utilization because of rising healthcare cost is that just another way of saying the utilization of all is it actually higher or at the same utilization and it's just coughing anymore, because it's kind of a nuanced message there and you know what.

And.

What kind of I guess, a inflation are you factoring into this.

David assumption.

Up to 10% a year or something like that I don't know.

Colin Simpson: 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 point that the goal is 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? Thank you, Mario, for the question. Let me be really clear upfront.

Hi, Seth Anthony Thank you for that question so yes.

Kind of I guess inflation are you factoring into this updated assumption.

<unk>.

And finally, the LTC Tri annual review.

While we are not as favorable impact that's in line that what the extent that we would've seen sense that screen here, but as you point out.

Up to 10% a year or something like that I don't know.

Okay I got it.

Anthony Thank you for the question so.

There were different parts and if we dive a little deeper and we have been seeing utilization offers for a number of quarter and to your question that is a result of higher medical inflation. So this is something we werent focused on and we fully address what we've observed and are we also reflecting elevated.

P C.

Finally, LTC I try and you're out with you.

And while we are not as favorable impact that's in line with the experience that we would've seen sense tallahatchie greenhill that as you point out and there were different parts and if we dive in deeper and we have been seeing utilization office for a number of quarter and to your question that is a result of higher medical inflation.

Inflation for and a little longer period of time.

There were also as you point out are there parts that led to positives, we had observed consistent termination gains, which led to a favorable impact to the reserve and then we have also.

So this is something we're focused on and we fully address what we've observed and and we are still reflecting elevated inflation for it and a little longer period of time.

Colin Simpson: There is no intention in the US or John Hancock to go back to the days of variable annuities and that higher market risk types of products. There are really two elements to our strategy, and I'll come on to 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, 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. The business we write is profitable. The margins are now at a similar level to the margins that we generate on average in Asia.

<unk> reviewed our premium rate increases sandwich, and we remain very conservative and embedded less than 70% of the total outstanding.

And then we're also as you point out are there parts that led to positive and we had observed consistent termination gain which led to a favorable impact to the reserve and we have also reviewed our premium rate increases I'm, saying, let's and we remain very conservative and embedded less than 70% of the yeah.

Got it.

Any sense of what medical cost inflation, you're assuming.

So as I mentioned, we did reflect that they would like that medical cost inflation has come down since its peak, but it's still slightly elevated.

Hello.

And we've reflected that I would persist a little longer before returning to our longer term view and I think I would leave it with our longer term view is higher than general inflation expectations.

Yeah.

Got it.

Sense of what medical cost inflation, you're assuming.

And so as I mentioned, we did reflect that they would like that.

Gold class inflation has come down since its peak, but it's still slightly elevated we went and.

Thank you.

Yes.

Thank you and then ask question comes from Tom Mackinnon with BMO capital.

We reflected that I would persist a little longer before returning to our longer term view and I think I would leave it with 10 of our longer term view is higher than general inflation expectations.

Colin Simpson: 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. 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.

Yes, thanks very much good morning.

A question maybe for Phil here, just the thinking behind this refresh strategy. I mean, you came out with a 2027 targets about 16 months ago, you're standing by them is it a is it really.

Thank you.

Yes.

Thank you and then last question comes from Tom Mackinnon with BMO capital.

Yes, thanks very much good morning.

And a new team you wanted to kind of refresh it.

A question maybe for Phil here, just the thinking behind this refresh strategy. I mean, you came out with a 2027 targets about 16 months ago, you're standing by them is it a is it really.

Because you've got a new kind of leadership team and.

I noticed that now youre talking about kind of more balanced growth across the portfolio I'm just interpreting it leave it up to you to hear to paraphrase, but.

Our new team you wanted to kind of refresh it.

Investing to grow in Canada, and the U S.

Because you've got a new kind of leadership team and.

How should we be thinking about that in terms of Ah.

I noticed that now you're talking about kind of more balanced growth across the portfolio I'm disinterred petting. It leave it up to you to hear to paraphrase, but.

Outlook for share buybacks, they still look like that's going to be fairly robust but.

Yeah, maybe you can.

Investing to grow in Canada, and the U S.

Can address some of those points ive raised thanks.

Colin Simpson: Phil, does that mean that you stick with your existing product suite? I couldn't quite figure that out. 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, 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. 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.

How should we be thinking about that in terms of our.

Thanks, Tom This is Phil and there's quite a lot in there to unpack. So if I Miss something out. Please do call me out on that now provides a supplement but the the logic for the refresh strategy update.

Outlook for share buybacks, they still look like that's going to be fairly robust but.

Yeah, maybe you can can address some of those points ive raised thanks.

I do acknowledge that the strategy we've had for the past eight 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 the leadership team. We felt that this was the right time to <unk>.

Thanks, Tom This is Phil and there's quite a lot in there to unpack. So if I Miss something out. Please do call me out on that and I'll provide a supplement but the the logic for the refresh strategy update.

Take a fresh look and something that I've said before is that given that the external environment continues to evolve its 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 that have a much.

Colin Simpson: 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? 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, but 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. That makes sense. Thank you. Thanks, Paul.

Longer time horizon beyond that when we think about setting the company up for long term success. So Tom you picked up on something that's really important and that is balanced growth and having a diversified organization is something that we truly value. It's something that provides resilience one of them.

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 two.

To fulfill that opportunity, 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 U S is attractive with generating attractive margins and we see an opportunity to invest to grow.

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 to fulfill that opportunity, but at the same time given the transformation that has been deliver.

Colin Simpson: Mark, congratulations on a great career there, and hope to see you in your new role. He's smiling. Thanks, Mario. Great. Great. Thank you. The next question is from Darko Much with IBC Capital Markets. Hi. Thank you. Good morning. Just a real quick question on corporate. There's a bit of noise in there. I actually have a negative CSM. Colin, how should I think about this business unit on a go-forward basis from a modeling perspective? Hey, Darko. Good to hear from you. Corporate was a little bit more 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 $300 to $400 million in this line, and that reflects further investments in central products.

Our new business in the U S and Canada and in particular in the U S to grow new business. So that it sustains our scale and 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.

But over the course of the past eight years, our new business footprint in both Canada and the U S is attractive with generating attractive margins and we see an opportunity to invest to grow our new business in the U S and Canada and in particular in the U S. Two to grow new business.

Well our strategy clarifies that we do believe that it's important to be in the mega economies of the future and you know we have a hugely successful business in the U S. Both on the <unk> side and on the insurance side with John Hancock, We have a successful scale business in China, and where we saw a strategic gap.

So that it sustains our scale and 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 fee.

Colin Simpson: You mentioned the CSM, the negative CSM. That is related to our Coley 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. Okay. Thank you. A question for Steve Finch. Steve, the question is really twofold. One is, your agent count is 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 sales power. On top of that, just quickly, how should we think about the build-out of India in terms of the earnings drag for the next couple of years? Thanks. Thanks, Darko.

Was the scale of our presence in India and that was really the logic for us taking decisive action to enter the India insurance market.

Sure and you know we have a hugely successful business in the U S. Both on the G M side and on the insurance side with John Hancock, 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 us taking decisive.

There are other elements of our strategy that I won't go into but I just call out that being a leader in AI in an AI powered organization is important to us and I think that's very important to our overall competitive position and future success, but Tom you referenced the importance of capital generation and I do want to emphasize.

Action to enter the India insurance market.

There are other elements of our strategy that I won't go into but I just call out that are being a leader in AI in an AI powered organization is important to us and I think that's very important to our overall competitive position and future success, but Tom you referenced the importance of capital generation and I do want to emphasize.

A size 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 of $6 billion and when it comes to capital deployment and share buybacks, our highest priority is.

Size 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 of $6 billion and when it comes to capital deployment and share buybacks, our highest priority is.

Colin Simpson: On the agency side, 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. If we look at other metrics in terms of 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, which is million-dollar roundtable. Manulife was third globally in terms of number of MDRT qualifiers in 2024, and the run rate is in the 20s, 20% for growth tracking through 2025 as well. What we're continuing to do to drive this is we're making investments.

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 possibilities, but I will emphasize when it comes to strategic M&A. The bar is high and that means that the buybacks. We expect to continue to be an important form of capital deployment for us I hope that covers all the points you raised them.

Unchanged and that's to organically invest in our business as well as sustaining and growing a our shareholder dividend and then for what's left over buybacks and strategic M&A, all possibilities, but I will emphasize when it comes to strategic M&A. The bar is high.

No. That's that's a fulsome. Thank you so much then.

Congratulations to Mark Constantine he is it kind of moves onto the.

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 them.

Net.

Next role here so all the best.

Thanks, Tom.

No. That's that's a fulsome. Thank you. So much then oh and congratulations to Mark Constantine He has he kind of moves onto the network.

Thank you and the next one.

Doug Young with Desjardin capital markets.

Hi, good morning, I'm going to go back to the actuarial review and.

<unk>.

His next role here so all the best.

There is I think a change in methodology and in Asia.

Thanks, Tom.

Correct me, if I'm wrong and that PPA that GM and.

Thank you and the next question, Doug Young with Desjardin capital markets.

Colin Simpson: 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. We are pleased with what we're seeing come out of these investments in the agency strategy. It's one of the core, it is the core distribution engine of the franchise, representing a little over 1/3 of sales. Steve, did you want to cover the India earnings question, or do you want me to? Okay. You go ahead, Steve. Yeah. Thanks.

Yes, I think Thats had a decent positive impact on our CSM. So I'm just trying to understand why the shift in and what impact did that shift had on core earnings in the quarter and with all the moving parts.

Hi, good morning, I'm going to go back to the actuarial review in.

There is I think a change in methodology and in Asia.

<unk> 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.

Correct me, if I'm wrong on that PPA that GM men and.

Yes, I think that's had a decent positive impact on the CSM and so I'm just trying to understand why the shift in and what impact did that shift had on core earnings in the quarter and with all the moving parts and 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.

<unk>.

Might be.

Okay, Thanks, Doug and Stephanie I'll start and Steve Colin wants to add but Youre right.

In terms of D and impact of the annual review, which was favorable and led to a reserve reduction of 600 million in large part of this was driven by a change in how we account for some that health insurance contract in Hong Kong.

<unk>.

Might be.

Okay, Thanks, Doug and Stephanie I'll start and see if he wants to add but youre right Phil.

We're moving from the PAA approach or what you would call short term insurance contract you're reserving for their lifetime.

In terms of T and impact of the annual review, let's with favorable and let's see where we serve a reduction of six 7 million in Iris part of this was driven.

And I'd add that since we implemented our FRS 17, we we've been studying industry practice and we found that most and Theres accounted for these products over the lifetime. So we've now aligning with this practice.

Change in how we account for some at health insurance contract in Hong Kong.

Well nothing found the PAA approach or what you would call short term insurance contactor reserving for the lifetime.

Colin Simpson: As Phil said earlier, we still have a ways to go to get the entity set up. We're not giving those forward projections at this time in terms of financial metrics, but we look forward to updating on that in the future. Yeah, that makes sense. Just to supplement, in terms of one financial metric we can provide, we expect the capital cost of India over the course of the next decade to be around $400 million capital injection. In the first five 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. Okay, great. Thank you very much. Thank you. This concludes the question and answer session. I would like to turn the conference back over to Mr.

And when does <unk> does as we've capitalized on cash flows and the reserve and we used that up and see us and to our furniture and no impact.

And I'd add that since we implemented our F 17, we we've been studying industry practice and we found that most and Theres accounted for these products over the lifetime. So we've now aligning flipped and best practice.

The insurance contract liability.

In terms of any impact to core earnings for this item in there small timing differences so L E N.

And what this does is we capitalize all cash flows in the reserve and we stand up the S N two outside it and no impact.

Not as favorable impact.

And then you asked about the impact of the annual review overall on core earnings and due to the favorable impact we saw an increase in C. S M.

The insurance contract liability.

And in terms of AD impact Hilco orienting for less items in their small timing differences the L E N not as favorable impact.

Which will lead to an increase in C S and amortization of approximately $30 million per quarter.

And then you asked about the impact of the annual review overall on Corning and due to the favorable impact we saw an increase in C S and and.

Okay and is there any other changes being contemplated.

And at this time with snow and other teams at this time being contemplated.

And which will lead to an increase in C. S N isolation of approximately 830 million per quarter.

Okay.

And then just second on the credit side, thanks for the detail on private credit, but what caught my eye as is.

Colin Simpson: Hung Ho for any closing remarks. Thank you, Operator. We'll be available after the call if there are any follow-up questions. Have a good day, everyone. Thank you. This brings to a close today's conference call. May I disconnect your lines? Thank you for participating, and have a pleasant day.

Okay.

Okay and is there any other changes being contemplated.

It seems like the parameter movements caused that reversal of credit provision this quarter and it was kind of tied into the positive nuc and equity market and accounting everyone can see the positive move in equity markets, but it was a bit surprised that positive move in equity markets has.

And at this time with snow and other teams at this time being contemplated.

Okay.

And then just second on the credit side. Thanks for the detail on private credit, but what caught my eye is is it seems like the parameter movements caused that reversal of credit provisions this quarter and it was kind of tied in to the positive move.

And impact on the ECL or as significant an impact on ECL. So I just wanted to kind of understand the mechanics, there a little bit. Thank you.

Hi, Doug its it's Trevor thanks for the question. So yes in terms of the issue as you noted there was a $44 million release, which was better than the charge than we saw in Q2.

And equity market and iconic everyone can see the positive move in equity markets, but I was a bit.

A positive move in equity markets has that.

And impact on the ECL or as significant an impact on ECL. So I just wanted to kind of understand the mechanics, there a little bit. Thank you.

And just to remind people the ECL charges broadly two main components. The first one is basically the impact of defaults and rating changes, which you would expect and then secondly, this modeled impact.

Hi, Doug its a its trevor thanks for the question. So yes in terms of the ECL. As you noted there was a 44 million release, which was better than the charge than we saw in <unk> in Q2, and just to remind people. The ECL charges broadly two main components. The first one is basically the impact of defaults in writing changes, which you would.

Connecting changes in the broader economic environment and 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 the positive impact from the market movement impacts on the market environment impact driven by strong equity market. So just your.

And then there is secondly, this model the impact.

Reflecting changes in the broader economic environment and we include both of those components in our definition of core earnings.

Yes to your question. So we use a third party model and that third party model basically generates this market environment impact and it includes aren't.

As you said for Q3, specifically the majority of our of the benefit was driven by the positive impact from the market movement impact or the market environment impact driven by strong equity market. So just your I guess your question. So we use a third party model and that third party model basically generates.

Variety of metrics on equity markets is one volatility interest rates et cetera, and how those have actually been correlated to credit experience in the past. So 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 of 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.

This market environment impact and it includes aren't a variety of metrics. So equity markets is one volatility interest rates et cetera, and how those have actually been correlated to credit experience in the past. So that's what the model is basically doing it's not a linear impact, but given the strength of equity markets on our consistency.

And then I guess the point is I mean, it's obviously was favorable this quarter, but this is another area, where the equity markets were to decline.

Of that strength of 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.

See the reverse happen again.

China, obviously exactly okay, yes, yes, thats right. Okay. Okay. Thank you very much.

And I guess the point is I mean, this obviously was favorable this quarter, but this is another area where equity markets were to decline you could see the reverse happen.

Okay.

Thank you and our next question comes from Paul Holden with CIBC.

Yes, thanks, good morning.

Yes, yes, yes, yes exactly.

First question I want to ask about the Hong Kong a P E sales.

Yes, yes, that's right okay. Okay. Thank you very much.

Obviously, they were quite strong over the prior four quarters and now a little bit of a decline year over year. So really I guess, what I want to 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.

Okay.

Thank you and our next question comes from Paul Holden with CIBC.

Yeah. Thanks, good morning.

First question I want to ask about the Hong Kong a P E sales.

Obviously, they were quite strong or the prior four quarters and now a little bit of a decline year over year. So really I guess, what I want to understand is.

Positive growth in sales or is it can be similar to this quarter or maybe there's a bit of a minimum of call it normalization and growth.

What should we expect over the next few quarters as you continue to lap some pretty good comps do you think you can produce.

Yes, Thanks colleagues said, it's Steve here.

As you noted the Hong Kong <unk> was down modestly year over year and that was off as Colin noted earlier, a very strong base the prior year.

Positive growth in sales or is it can be similar to this quarter or maybe if there's a bit of a I don't know if you call it a normalization and growth.

Yes, Thanks, Pollard said, it's Steve here and as said as you noted the Hong Kong a P. E was down modestly year over year and that was off as Colin noted earlier, a very strong base the prior year.

And your point about growth, we've seen year to date. The <unk> has increased 46% year over year. So that demonstrates the growth that we've had in addition, while the AP declined in the quarter our value metrics performed strongly so in Hong Kong, we are happy with these results NPV.

And N B CSM were up 10% and 12% year over year, respectively.

And that was due to some favorable mix some.

Additional health and protection that we saw in the quarter in terms of outlook in Hong Kong.

B and N B CSM were up 10% and 12% year over year, respectively.

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, but if I back up to look at the.

And that was due to some favorable mix some.

Additional health and protection that we saw in the quarter in terms of outlook and in Hong Kong.

The underlying fundamentals and look a bit further out than that.

Q4 was another strong year last year, we typically see.

The market fundamentals do remain very strong and demand is as high from our customers. We also see that in Hong Kong.

No variability so we'd expect some drop off in Q4 and picking up again in Q1, but if I back up to look at the.

And in Singapore as well.

The underlying fundamentals and look a bit further out than that.

International Financial Center, and there's a strong flow of funds so.

The market fundamentals do remain very strong and demand is as high from our customers. We also see that in Hong Kong.

The underlying drivers are favorable and we are making.

Significant investments in our capabilities to support customers and distributors. So as we look out over the medium term, we remain very optimistic about the Hong Kong market.

And in Singapore, as well and International Financial Center, and there's a strong flow of funds. So that the underlying drivers are favorable and we're making.

Alright, okay.

Second question is going back to the strategy refresh show.

Significant investments in our capabilities to support customers and distributors. So as we look out over the medium term, we remain very optimistic about the Hong Kong market.

When I get a better sense of how we should think about the earnings trajectory for Canada and U S Y here investments in those markets I think about baby.

Alright, okay.

Second question is going back to the strategy refresh show.

In the short term higher expenses as a result of those investments but longer term grew.

Warnaco about our sense of how we should think about the earnings trajectory for Canada and U S Y here investments in those markets I think about baby and that in the short term higher expenses as a result of those investments but longer term.

Growth rates.

Is that the right interpretation.

Hey, Paul This is Phil thanks for the drill down question there on the strategy.

The way I see this I mean, we only have one target when it comes to medium term earnings growth and that tends 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 and the lens that we've applied.

Growth rates.

Is that the right interpretation.

Hey, Paul This is Phil and thanks for the drill down question there on the strategy.

The way I see this I mean, we only have one target when it comes to our medium term earnings growth and that's the 10% to 12% core E. P. S. But my expectation and this is the leadership team's expectation is that each of our segments contribute to that growth and the lens that we've applied.

Aid.

In resetting the strategy is really to make it clear that growth will not only come from Asia and global Lam The U S 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.

Aid in resetting the strategy is really to make it clear that growth will not only come from Asia and global Lam The U S and Canada will be important contributors to that and so this is about investing to sustain scale investing to sustain capital generation investing.

<unk> growth rates, and I don't want to get too precise or issue any formal guidance, but.

I think what's reasonable is it sort of we're not looking double digits for Canada, and the U S, but it's sort of low to mid single digits.

For the U S and a little higher for Canada.

<unk> to sustain growth rates and I don't want to get too precise or issue any formal guidance, but you know I.

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.

I think what's reasonable or is sort of we're not looking double digits for Canada, and the U S, but it's sort of low to mid single digits.

Okay got it thank you.

For the U S and a little higher for Canada, but I 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.

Thank you next question comes from Mario Mendonca with TD Securities.

Good morning, Phil a related question. So so when I reflect back on what the U S business was in the past and what it's become.

Okay got it thank you.

Remember as I suspect many people on the call due that the U S 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 so as you think about this.

Thank you that's pressing for survival, but don't come with TD Securities.

Good morning, Phil a related question. So so when I reflect back on what the U S business was in the past and what it's become I remember as I suspect many people on the call due that the U S business was a much broader business long term care universal life variable annuities.

Refresh in the U S is the point that is the goal to drive higher sales levels and your existing product mix or will you return manulife to its former ourself with just a much broader product suite in the U S.

Variable Universal life, there was a lot going on but it was a really messy business as well so as you think about this.

Thank you Mario for the question and let me be really clear upfront there is no intention.

Refresh in the U S is the point that the.

Is the goal to drive higher sales levels and your existing product mix or will you return manulife to its former ourself with just a much broader product suite in the U S.

In the U S. John Hancock to go back to the days of variable annuities in that you know higher market risk types of products. What we have there are really two elements to our strategy and I'll I'll come onto this the what we're really thinking about is when we reflect on the transformation that we've delivered in the U S over the course of the.

Thank you Mario for the question and let me be really clear upfront there is no intention.

Seven to eight years is we've we've created differentiation through our focus on behavioral insurance, the promotes health and wellness and that creates differentiation in the market that has enabled us to be successful and what I would say is quite a niche footprint in the.

Past seven to eight years.

As we've we've created differentiation.

The high net worth focusing on the high net worth customer segment.

Through our focus on behavioral insurance, the promotes health and wellness and that creates differentiation in the market that has enabled us to be successful and what I would say, it's quite a niche footprint.

It's profitable business. We write is profitable the margins are now at a similar level to the margins that we generate on average in Asia. So 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 campus.

The high net worth focusing on the high net worth customer segment, it's profitable the business. We write is profitable the margins are now at a similar level to the margins that we generate on average in Asia. So the question for US is twofold. One is how do we potentially broaden the scope of <unk>.

So not going back to where we were 10 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 and emerging high net worth individuals.

Solutions that we provide to customers, but within our risk appetite so not going back to where we were 10 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.

So thats really an expansion of the relevant customer segments that we focus on and I feel with some of the strategic changes that we're making in the U S 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.

Individuals and families 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 U S and the team that we have we're very well positioned to be able to deliver on that opportunity and sustain our scale.

The largest insurance market in the world.

Does that mean that you stick with your existing product suite.

I couldnt quite figured that out.

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

<unk> earnings and capital generation from what is the the largest economy in the largest insurance market in the world.

So does that mean that you stick with your existing products suite.

I couldnt quite figured that out.

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

And we have robust risk disciplines that apply not only in the U S, but around the world.

Okay quick follow up question look none of this is free.

I see that the efficiency target is no longer a formerly 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 can sacrifice in the near term in pursuit of this refresh strategy in Canada and the us.

And we have robust risk disciplines that apply not only in the U S, but around the world.

A quick follow up question is like none of this is free.

I see that the efficiency target is no longer formerly 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 and pursuit of best refresh strategy in Canada and the U S.

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 yes, we'll be investing in our businesses.

Part of our investments at an enterprise level include becoming an AI powered organization and we're already seeing the benefits of our investments and leadership position in AI pay off when it comes to <unk>.

Actually Mario I, we 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 yes, we'll be investing in our businesses.

Mitigating expense growth and providing an ability for the organization to do more with less and so I think the forces moving in both directions that will enable us to continue to be efficient.

But part of our investments at an enterprise level include becoming an AI powered organization and we're already seeing the benefits of our investments and leadership position in AI pay off when it comes to <unk>.

That makes sense. Thank you.

Mark.

Gratulation is on a great career, there and hope to see you in your new role.

Mitigating expense growth and providing an ability for the organization to do more with less and so I think there are forces moving in both directions that will enable us to continue to be efficient.

Smiling thanks Mario.

Okay.

Thank you next question Darko niche with RBC capital markets.

That makes sense. Thank you.

Hi, Thank you. Good morning, just a real quick question on corporate units a bit of noise in there I actually have a negative CSM Colin how should I think about this business unit.

And congratulations.

Relations on a great career, there and hope to see you in your new role.

Smiling thanks Mario.

Great.

On a go forward basis from a modeling perspective.

Thank you next question is from Darko <unk> with RBC capital markets.

Hey, Josh good to hear from your corporate did was a little bit more what's different to the trend next year and a large part of that was the withholding tax accrual release that we made in respect of the Comverse acquisition, but I think going forward you would expect us to have a result of $300 million to $400 million in this line in there.

Hi, Thank you. Good morning, just a real quick question on corporate I mean, it's 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.

Hey, Doug had good too good to hear from your corporate debt was a little bit more was different to the trend next year and a large part of that was the withholding tax accrual release that we made in respect of the Comverse acquisition, but I think going forward you would expect us to have a result of $300 million to $400 million.

Reflects further investments in central products.

You mentioned the CSM the negative CSM that that if that is related to all our coli product that we've owned for many years, it's really just a intercompany settlements and nothing to nothing to really focus on it will be steady for the next few quarters.

In this line and that reflects further investments in central products.

Okay. Thank you and a question for Steve Finch.

You mentioned the CSM the negative C. S M that that if that is related to all our coli product that we've owned for many years, it's really just a intercompany settlements and nothing to nothing to really focus on it will be steady for the next few quarters.

Steve.

Question is really twofold. One is your agent count still declining maybe you can talk a little bit about.

What it is youre doing there and when does it does it affect <unk>.

Okay. Thank you I had a question for Steve Finch.

Sales power.

And then on top of that just quickly is there how should we think about the build out of India and <unk>.

Steve. The question is really twofold. One is your agent count still declining maybe you can talk a little bit about.

<unk>.

The earnings drag for the next couple of years. Thanks.

What it is youre doing there and when does it does it affect the.

Thanks, Darko and.

Sales power.

On the agency side, our focus there our strategy is building out high quality and professional agency and which its not really driven by that metric in terms of number of agents. So we if we look at other metrics in terms of that.

And then on 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. Thanks.

Thanks, Darko and on the agency side, our focus there our strategy is building out high quality and professional agency.

Top tier agency or a P. E per active agent is is growing significantly our NPV per agent is also growing materially and we've seen growth in our agency sales. This year as a result of this one of the other objective measures there is.

And which its not really driven by that metric in terms of number of agents. So we if we look at that other metrics in terms of that.

A measure of top tier agents is million dollar round table.

<unk> third globally in terms of number of <unk> qualifiers.

In 'twenty four and the run rate is.

In the twenties, 20% for growth.

Tracking through 2025, as well and what we're continuing to do to drive. This is we're making investments and broadly speaking those investments our training and development really investing in our people to be able to recruit high quality agents train them very well developed them into leaders.

A measure of top tier agents is million dollar round table.

<unk> was third globally in terms of number of MTR T qualifiers.

In 'twenty four and the run rate is.

In the twenties, 20% for growth.

<unk>.

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 with the <unk>.

<unk>.

First need for the the agent would be and we're seeing benefits from from these investments. So we are pleased with the.

What we're seeing come out of these investments in the agency strategy. It's it's one of the core it is the core.

<unk> best need for the the agent would be and we're seeing benefits from from these investments. So we are pleased with the.

Distribution engine of the franchise revenues, representing a little over a third of sales.

And Steve did you want to cover the India. The India earnings question Joan Okay. You go ahead Steve.

What we're seeing come out of these investments in the agency strategy. It's it's one of the core it is the core.

Distribution engine of the franchise Rep is representing a little over a third of sales.

Yes, Thanks, as Phil said earlier.

We still have a ways to go to get the entity setup.

We're not giving those forward projections at this time in terms of <unk>.

And Steve did you want to cover the India. The India earnings question Jerome. Okay. You go ahead Steve.

<unk> financial metrics, but we look forward to updating on that in the future yeah that makes sense and just to supplement in terms of one financial metric we can provide us.

Yeah, Thanks, as Phil said earlier.

We still have a ways to go to get the entity setup.

We expect the capital cost of India over the course of the next decade to be around 400 million U S dollars capital injection in the first five years, that's around $140 million to $150 million U S dollars and I think that helps ready to put some parameters around what the AUM.

Not giving those forward projections at this time in terms of financial metrics, but we look forward to updating on that in the future yeah that makes sense and just to supplement in terms of one financial metric. We can provide is we expect the capital cost of India over the call.

Overall financial dynamics up, but a hugely exciting move for Manulife.

The next decade to be around 400 million U S dollars capital injection in the first five years that surround hundred 40 to 150 million U S dollars and I think that helps ready to put some parameters around what the overall financial dynamics off but a hugely exciting move for manulife.

Okay, great. Thank you very much.

Thank you and this concludes our question and answer session I would like to turn the conference back over to Mr Hall for any closing remarks.

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

Yeah.

Okay, great. Thank you very much.

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 and this concludes our question and answer session I would like to turn the conference back over to Mr. Cohen for any closing remarks.

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

Thank you this brings to a close today's conference call.

Set your lines. Thank you for participating and have a pleasant day.

Please standby.

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