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Home / News / Manulife reports 3Q22 net income of $1.3 billion, core earnings of $1.3 billion, APE sales of $1.3 billion, and Global Wealth and Asset Management net inflows of $3.0 billion
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Manulife reports 3Q22 net income of $1.3 billion, core earnings of $1.3 billion, APE sales of $1.3 billion, and Global Wealth and Asset Management net inflows of $3.0 billion

May 07, 2023May 07, 2023

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09 Nov, 2022, 17:01 ET

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This earnings news release for Manulife Financial Corporation ("Manulife" or the "Company") should be read in conjunction with the Company's Third Quarter 2022 Report to Shareholders, including our unaudited interim Consolidated Financial Statements for the three and nine months ended September 30, 2022, prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), which are available on our website at www.manulife.com/en/investors/results-and-reports. The MD&A and additional information relating to the Company is available on the SEDAR website at http://www.sedar.com and on the U.S. Securities and Exchange Commission's ("SEC") website at http://www.sec.gov.

TORONTO, Nov. 9, 2022 /CNW/ - Today, Manulife announced its third quarter of 2022 ("3Q22") results. Key highlights include:

"We delivered resilient operating results in the third quarter amidst a challenging market and operating environment," said Manulife President & Chief Executive Officer Roy Gori. "We continued to deliver solid results in our Asia business and delivered in-force business growth of 8% and 12% in the third quarter and year-to-date, respectively. And, in Global WAM, we generated net inflows of $3.0 billion and our core EBITDA margin4 was 32.7% in 3Q22, a very strong achievement given the market volatility."

"We are focused on driving resilience for our people, customers and communities. Through our behavioural insurance offerings, we are committed to helping our customers lead longer, healthier, better lives, and we are rewarding them for making healthy lifestyle choices. We are expanding our Manulife Vitality offerings in Canada across our core product suite. In the U.S., we have made a multi-cancer, early detection test available to a pilot group of existing customers through John Hancock Vitality, enabling customers to make more informed choices about their health. And, in Asia, we continue to roll out servicing features in our ManulifeMOVE app, furthering its position as a one-stop health and servicing gateway for our customers," added Mr. Gori.

"Our diverse business and strong capital levels position us well to navigate an uncertain market environment. Our LICAT ratio of 136% provides significant flexibility, and we have repurchased approximately 3.1% of our common shares for $1.4 billion so far this year6 as we remain committed to delivering value to shareholders," said Phil Witherington, Chief Financial Officer.

"Expense efficiency continues to be a key strategic priority and important lever in the current operating environment. Our third quarter general expenses were held in line with the prior year, providing an offset to topline pressure," Mr. Witherington continued.

__________

1

Core earnings is a non-GAAP financial measure. For more information on non-GAAP and other financial measures, see "Non-GAAP and other financial measures" below and in our Third Quarter 2022 Management's Discussion and Analysis ("3Q22 MD&A") for additional information.

2

Percentage growth / declines in core earnings stated on a constant exchange rate basis is a non-GAAP ratio.

3

Life Insurance Capital Adequacy Test ("LICAT") ratio of The Manufacturers Life Insurance Company ("MLI"). LICAT ratio is disclosed under the Office of the Superintendent of Financial Institutions Canada's ("OSFI's") Life Insurance Capital Adequacy Test Public Disclosure Requirements guideline.

4

Core return on common shareholders' equity ("Core ROE") and core EBITDA margin are non-GAAP ratios.

5

For more information on new business value ("NBV"), annualized premium equivalent ("APE") sales and net flows, see "Non-GAAP and other financial measures" below. In this news release, percentage growth / declines in NBV and APE sales are stated on a constant exchange rate basis.

6

As of October 31, 2022 the Company has purchased for cancellation approximately 60 million common shares for $1.4 billion.

BUSINESS HIGHLIGHTS:

In Asia, we accelerated the utilization of ManuAcademy, our regional digital learning platform rolled out to Vietnam last quarter. Since the roll-out, the platform has enabled the onboarding of over 11,000 newly-recruited insurance agents, and delivered over 150,000 training hours to approximately 45,000 insurance agents. Our new training series, Manulife MasterClass, captures best practices from our Million Dollar Round Table agents and shares them across all agents through the platform. In Canada, we announced an expansion of the Manulife Vitality program, making it available to new term and universal life insurance policyholders effective November 2022. In the U.S., we continue to innovate our wellness offerings and announced a partnership with GRAIL, a healthcare company, offering access to Galleri®, their leading edge, multi-cancer early detection test to a pilot group of customers through John Hancock Vitality. As the first life insurance carrier to make GRAIL's Galleri® test available, we are enabling eligible customers to take proactive steps to better understand and make more informed choices about their health. In Global WAM, we expanded our Environmental, Social and Governance investment offerings with the launch of the Global Climate Action strategy in Europe to meet increasing demand for sustainable investment solutions.

In addition, we continued to make progress on our digital journey in 3Q22. In Asia, we continued to drive the adoption of ePOS, our proprietary digital onboarding app, to enhance the distributor experience and enable faster, error-free new business application submissions with case adoption at 90%, an increase of 9 percentage points compared with 3Q21. In the U.S., we reduced the amount of time to onboard producers within our traditional brokerage channel by 92% by automating the background check process. In Global WAM, we made a number of enhancements to our digital platform in Retirement including rolling out functionality that enables members in Canada to book one-on-one meetings with a Manulife PlanRight financial advisor directly in the mobile app, which generated successful engagement, and resulted in approximately 1,400 advisor meeting requests in 3Q22. In addition, we recently enhanced digital service features which enable members in the U.S. to self-serve to a greater extent, resulting in a reduction of approximately 10,000 calls to the call centre this quarter.

FINANCIAL HIGHLIGHTS:

Quarterly Results

YTD Results

($ millions, unless otherwise stated)

3Q22

3Q21

2022

2021

Profitability:

Net income attributed to shareholders

$ 1,347

$ 1,592

$ 5,403

$ 5,021

Core earnings

$ 1,322

$ 1,517

$ 4,436

$ 4,828

Diluted earnings per common share ($)

$ 0.68

$ 0.80

$ 2.72

$ 2.51

Diluted core earnings per common share ("Core EPS") ($)(1)

$ 0.67

$ 0.76

$ 2.22

$ 2.41

Return on common shareholders' equity ("ROE")

10.5 %

12.6 %

14.0 %

13.7 %

Core ROE

10.3 %

12.0 %

11.4 %

13.2 %

Expense efficiency ratio(1)

53.9 %

51.3 %

51.0 %

48.9 %

General expenses

$ 1,900

$ 1,904

$ 5,641

$ 5,828

Business Performance:

Asia new business value

$ 333

$ 399

$ 1,010

$ 1,275

Canada new business value

$ 89

$ 71

$ 275

$ 225

U.S. new business value

$ 92

$ 69

$ 253

$ 188

Total new business value

$ 514

$ 539

$ 1,538

$ 1,688

Asia APE sales

$ 854

$ 930

$ 2,740

$ 3,160

Canada APE sales

$ 285

$ 303

$ 1,009

$ 932

U.S. APE sales

$ 207

$ 203

$ 615

$ 544

Total APE sales

$ 1,346

$ 1,436

$ 4,364

$ 4,636

Global WAM net flows ($ billions)

$ 3.0

$ 9.8

$ 11.6

$ 19.8

Global WAM gross flows ($ billions)(2)

$ 32.0

$ 35.2

$ 104.1

$ 108.7

Global WAM assets under management and administration ($ billions)(3)

$ 748.8

$ 823.6

$ 748.8

$ 823.6

Global WAM total invested assets ($ billions)

$ 3.7

$ 4.3

$ 3.7

$ 4.3

Global WAM net segregated funds net assets ($ billions)

$ 214.5

$ 244.6

$ 214.5

$ 244.6

Financial Strength:

MLI's LICAT ratio

136 %

138 %

136 %

138 %

Financial leverage ratio

28.8 %

25.5 %

28.8 %

25.5 %

Book value per common share ($)

$ 26.17

$ 25.78

$ 26.17

$ 25.78

Book value per common share excluding AOCI ($)

$ 25.88

$ 23.41

$ 25.88

$ 23.41

(1)

This item is a non-GAAP ratio.

(2)

For more information on gross flows, see "Non-GAAP and other financial measures" below and in our 3Q22 MD&A for additional information.

(3)

This item is a non-GAAP financial measure.

PROFITABILITY:

Reported net income attributed to shareholders of $1.3 billion in 3Q22, down $0.2 billion from 3Q21 The decrease in net income attributed to shareholders was primarily driven by lower gains from investment-related experience and lower core earnings, partially offset by a smaller charge from the direct impact of markets. The direct impact of markets in 3Q21 included a $0.5 billion charge related to the impact of updated Ultimate Reinvestment Rate assumptions issued by the Canadian Actuarial Standards Board. Investment-related experience in 3Q22 reflected the favourable impact of fixed income reinvestment activities and favourable credit experience, partially offset by lower-than-expected returns (including fair value changes) on alternative long-duration assets primarily related to real estate. The charge from the direct impact of markets in 3Q22 was primarily driven by the impact of unfavourable equity market performance, losses from the sale of available-for-sale ("AFS") bonds and swap spread movements, partially offset by gains due to rising interest rates in the U.S., a flattening of the yield curve in Canada, and widening corporate spreads in the U.S.

Delivered core earnings of $1.3 billion in 3Q22, a decrease of 14% compared with 3Q21The decrease in core earnings was driven by a $256 million charge in our P&C Reinsurance business for estimated losses related to Hurricane Ian (compared with a $152 million charge in the prior year quarter for estimated losses related to Hurricane Ida and the European floods), lower net gains on sales of AFS equities and the unfavourable impact of markets on seed money investments in new and segregated mutual funds in Corporate and Other, lower new business gains in Asia and the U.S., lower U.S. Annuities in-force earnings due to the variable annuity reinsurance transaction that closed in the first quarter of 2022, and a higher charge from net unfavourable U.S. policyholder experience. These items were partially offset by higher yields on fixed income investments and lower expenses in Corporate and Other, and in-force business growth in Asia and Canada. Lower expenses in Corporate and Other reflect lower supplemental pension expense primarily due to market impacts and lower variable incentive compensation.

ANNUAL REVIEW OF ACTUARIAL METHODS AND ASSUMPTIONS:

We completed our annual review of actuarial methods and assumptions, which resulted in a modest net gain of $36 million post-tax to net income attributed to shareholders in total and approximately net neutral impact for LTC. The review included a comprehensive study of our U.S. LTC experience, including all aspects of claims assumptions and future premium rate increases. Other assumptions reviewed included mortality and certain lapse assumptions for Canada's life insurance business, as well as lapse and mortality assumptions for certain Asia markets.

BUSINESS PERFORMANCE:

New business value ("NBV") of $514 million in 3Q22, a decrease of 6% compared with 3Q21In Asia, NBV decreased 17% from 3Q21 reflecting lower sales in Hong Kong and changes in product mix in Asia Other7, partially offset by higher individual protection and other wealth sales in Japan. In Canada, NBV increased 25% from 3Q21, driven by higher margins in our insurance businesses, partially offset by lower volumes in Annuities. In the U.S., NBV increased 27% from 3Q21, driven by improved margins due to pricing actions, higher interest rates and changes in product mix.

Annualized premium equivalent ("APE") sales of $1.3 billion in 3Q22, a decrease of 6% compared with 3Q21In Asia, APE sales decreased 7%, reflecting lower sales in Hong Kong, partially offset by higher sales in Japan and Asia Other. In Hong Kong, APE sales decreased 40% driven by the impact of weaker customer sentiment on financial planning decisions and tighter COVID-19 containment measures in Macau during the quarter. In Japan, APE sales increased 22% as a result of higher individual protection and other wealth sales. Asia Other APE sales increased 6%, reflecting higher bancassurance sales in mainland China, Vietnam and Singapore, partially offset by lower agency sales in Singapore and mainland China. In Canada, APE sales decreased 6%, primarily driven by lower segregated fund sales and the non-recurrence of a large affinity markets sale in 3Q21, partially offset by normal variability of large-case group insurance sales. In the U.S., APE sales decreased 1%, primarily due to lower sales of domestic life insurance products, partially offset by an increase in international sales, which are reported as part of U.S. segment results. APE sales of products with the John Hancock Vitality PLUS feature increased 12% compared with 3Q21, reflecting the increasing attractiveness of the Vitality feature as an option for health-focused life insurance consumers.

Reported Global Wealth and Asset Management net inflows of $3.0 billion in 3Q22, compared with 3Q21 net inflows of $9.8 billionNet inflows in Retirement were $1.4 billion in 3Q22 compared with net inflows of $0.6 billion in 3Q21, driven by growth in member contributions and lower plan redemptions. Net inflows in Retail were $1.0 billion in 3Q22 compared with net inflows of $7.9 billion in 3Q21, reflecting lower gross flows and higher mutual fund redemption rates due to decreased investor demand amid equity market declines and higher interest rates. Net inflows in Institutional Asset Management were $0.6 billion in 3Q22 compared with net inflows of $1.3 billion in 3Q21, driven by higher redemptions, partially offset by higher sales of equity and fixed income mandates.

________________________________

7 Asia Other excludes Hong Kong and Japan.

QUARTERLY EARNINGS RESULTS CONFERENCE CALL Manulife Financial Corporation will host a Third Quarter 2022 Earnings Results Conference Call at 8:00 a.m. ET on November 10, 2022. For local and international locations, please call 416-340-2217 or toll free, North America 1-800-806-5484 (Passcode: 2059970#). Please call in 15 minutes before the call starts. You will be required to provide your name and organization to the operator. A replay of this call will be available by 11:00 a.m. ET on November 10, 2022 through February 4th, 2023 by calling 905-694-9451 or 1-800-408-3053 (Passcode: 7330185#).

The conference call will also be webcast through Manulife's website at 8:00 a.m. ET on November 10, 2022. You may access the webcast at: manulife.com/en/investors/results-and-reports. An archived version of the webcast will be available on the website following the call at the same URL as above.

The Third Quarter 2022 Statistical Information Package is also available on the Manulife website at: www.manulife.com/en/investors/results-and-reports.

Any information contained in, or otherwise accessible through, websites mentioned in this news release does not form a part of this document unless it is expressly incorporated by reference.

EARNINGS:

The following table presents net income attributed to shareholders, consisting of core earnings and details of the items excluded from core earnings:

Quarterly Results

YTD Results

($ millions)

3Q22

2Q22

3Q21

2022

2021

Core earnings

Asia

$ 513

$ 513

$ 533

$ 1,563

$ 1,629

Canada

350

345

311

1,009

893

U.S.

384

456

490

1,326

1,469

Global Wealth and Asset Management

345

305

351

974

1,019

Corporate and Other (excluding core investment gains)

(370)

(157)

(268)

(736)

(482)

Core investment gains(1)

100

100

100

300

300

Total core earnings

$ 1,322

$ 1,562

$ 1,517

$ 4,436

$ 4,828

Items excluded from core earnings:(1)

Investment-related experience outside of core earnings

125

591

700

1,274

1,516

Direct impact of equity markets and interest rates and variable annuity guarantee liabilities

(54)

(1,067)

(597)

(1,024)

(1,215)

Change in actuarial methods and assumptions

36

-

(41)

36

(41)

Restructuring charge

-

-

-

-

(115)

Reinsurance transaction, tax-related items and other

(82)

-

13

681

48

Net income attributed to shareholders

$ 1,347

$ 1,086

$ 1,592

$ 5,403

$ 5,021

(1)

These items are disclosed under OSFI's Source of Earnings Disclosure (Life Insurance Companies) guideline.

NON-GAAP AND OTHER FINANCIAL MEASURES:

The Company prepares its Consolidated Financial Statements in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. We use a number of non-GAAP and other financial measures to evaluate overall performance and to assess each of our businesses. This section includes information required by National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure in respect of "specified financial measures" (as defined therein).

Non-GAAP financial measures include core earnings (loss); pre-tax core earnings; core earnings available to common shareholders; core general expenses; core earnings before income taxes, depreciation and amortization ("core EBITDA") and assets under management and administration ("AUMA").

Non-GAAP ratios include core return on common shareholders' equity ("core ROE"); diluted core earnings per common share ("core EPS"); core EBITDA margin; expense efficiency ratio; and percentage growth/decline on a constant exchange rate basis in any of the above non-GAAP financial measures.

Other specified financial measures include assets under administration; NBV; APE sales; gross flows; net flows; and percentage growth/decline in such other financial measures.

Non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under GAAP and, therefore, might not be comparable to similar financial measures disclosed by other issuers. Therefore, they should not be considered in isolation or as a substitute for any other financial information prepared in accordance with GAAP. For more information on non-GAAP financial measures, including those referred to above, see the section "Non-GAAP and other financial measures" in our 3Q22 MD&A, which is incorporated by reference.

Reconciliation of core earnings to net income attributed to shareholders

3Q22

($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Asia

Canada

U.S.

Global

WAM

Corporate

and Other

Total

Income (loss) before income taxes

$ 476

$ 819

$ 766

$ 395

$ (819)

$ 1,637

Income tax (expense) recovery

Core earnings

(61)

(116)

(62)

(50)

18

(271)

Items excluded from core earnings

2

(75)

(52)

-

64

(61)

Income tax (expense) recovery

(59)

(191)

(114)

(50)

82

(332)

Net income (post-tax)

417

628

652

345

(737)

1,305

Less: Net income (post-tax) attributed to

Non-controlling interests

(19)

-

-

-

1

(18)

Participating policyholders

(85)

50

11

-

-

(24)

Net income (loss) attributed to shareholders (post-tax)

521

578

641

345

(738)

1,347

Less: Items excluded from core earnings(1)

Investment-related experience outside of core

earnings

(3)

97

127

-

(96)

125

Direct impact of equity markets and interest rates and

variable annuity guarantee liabilities

95

96

137

-

(382)

(54)

Change in actuarial methods and assumptions

(45)

35

36

-

10

36

Restructuring charge

-

-

-

-

-

-

Reinsurance transactions, tax related items and other

(39)

-

(43)

-

-

(82)

Core earnings (post-tax)

$ 513

$ 350

$ 384

$ 345

$ (270)

$ 1,322

Income tax on core earnings (see above)

61

116

62

50

(18)

271

Core earnings (pre-tax)

$ 574

$ 466

$ 446

$ 395

$ (288)

$ 1,593

(1)

These items are disclosed under OSFI's Source of Earnings Disclosure (Life Insurance Companies) guideline.

Core earnings, CER basis

3Q22

(Canadian $ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Asia

Canada

U.S.

Global

WAM

Corporate

and Other

Total

Core earnings (post-tax)

$ 513

$ 350

$ 384

$ 345

$ (270)

$ 1,322

CER adjustment(1)

-

-

-

-

-

-

Core earnings, CER basis (post-tax)

$ 513

$ 350

$ 384

$ 345

$ (270)

$ 1,322

Income tax on core earnings, CER basis(2)

61

116

62

50

(18)

271

Core earnings, CER basis (pre-tax)

$ 574

$ 466

$ 446

$ 395

$ (288)

$ 1,593

(1)

The impact of updating foreign exchange rates to that which was used in 3Q22.

(2)

Income tax on core earnings adjusted to reflect the foreign exchange rates for the Statement of Income in effect for 3Q22.

Reconciliation of core earnings to net income attributed to shareholders

2Q22

($ millions, post-tax and based on actual foreign exchangerates in effect in the applicable reporting period,unless otherwise stated)

Asia

Canada

U.S.

Global

WAM

Corporate

and Other

Total

Income (loss) before income taxes

$ 216

$ 224

$ 1,010

$ 362

$ (555)

$ 1,257

Income tax (expense) recovery

Core earnings

(74)

(119)

(92)

(57)

4

(338)

Items excluded from core earnings

44

64

(82)

-

54

80

Income tax (expense) recovery

(30)

(55)

(174)

(57)

58

(258)

Net income (post-tax)

186

169

836

305

(497)

999

Less: Net income (post-tax) attributed to

Non-controlling interests

(11)

-

-

-

-

(11)

Participating policyholders

(164)

84

4

-

-

(76)

Net income (loss) attributed to shareholders (post-tax)

361

85

832

305

(497)

1,086

Less: Items excluded from core earnings(1)

Investment-related experience outside of core

earnings

80

86

591

-

(166)

591

Direct impact of equity markets and interest rates and

variable annuity guarantee liabilities

(232)

(346)

(215)

-

(274)

(1,067)

Change in actuarial methods and assumptions

-

-

-

-

-

-

Restructuring charge

-

-

-

-

-

-

Reinsurance transactions, tax related items and other

-

-

-

-

-

-

Core earnings (post-tax)

$ 513

$ 345

$ 456

$ 305

$ (57)

$ 1,562

Income tax on core earnings (see above)

74

119

92

57

(4)

338

Core earnings (pre-tax)

$ 587

$ 464

$ 548

$ 362

$ (61)

$ 1,900

(1)

These items are disclosed under OSFI's Source of Earnings Disclosure (Life Insurance Companies) guideline.

Core earnings, CER basis

2Q22

(Canadian $ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Asia

Canada

U.S.

Global

WAM

Corporate

and Other

Total

Core earnings (post-tax)

$ 513

$ 345

$ 456

$ 305

$ (57)

$ 1,562

CER adjustment(1)

3

-

10

4

1

18

Core earnings, CER basis (post-tax)

$ 516

$ 345

$ 466

$ 309

$ (56)

$ 1,580

Income tax on core earnings, CER basis(2)

75

119

94

58

(5)

341

Core earnings, CER basis (pre-tax)

$ 591

$ 464

$ 560

$ 367

$ (61)

$ 1,921

(1)

The impact of updating foreign exchange rates to that which was used in 3Q22.

(2)

Income tax on core earnings adjusted to reflect the foreign exchange rates for the Statement of Income in effect for 3Q22.

Reconciliation of core earnings to net income attributed to shareholders

3Q21

($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unlessotherwise stated)

Asia

Canada

U.S.

Global

WAM

Corporate

and Other

Total

Income (loss) before income taxes

$ 650

$ (101)

$ 800

$ 418

$ (287)

$ 1,480

Income tax (expense) recovery

Core earnings

(52)

(109)

(79)

(66)

12

(294)

Items excluded from core earnings

(31)

153

(16)

(1)

23

128

Income tax (expense) recovery

(83)

44

(95)

(67)

35

(166)

Net income (post-tax)

567

(57)

705

351

(252)

1,314

Less: Net income (post-tax) attributed to

Non-controlling interests

48

-

-

-

-

48

Participating policyholders

(303)

(31)

8

-

-

(326)

Net income (loss) attributed to shareholders (post-tax)

822

(26)

697

351

(252)

1,592

Less: Items excluded from core earnings(1)

Investment-related experience outside of core

earnings

62

97

617

-

(76)

700

Direct impact of equity markets and interest rates and

variable annuity guarantee liabilities

(129)

(369)

(96)

-

(3)

(597)

Change in actuarial methods and assumptions

343

(65)

(314)

-

(5)

(41)

Restructuring charge

-

-

-

-

-

-

Reinsurance transactions, tax related items and other

13

-

-

-

-

13

Core earnings (post-tax)

$ 533

$ 311

$ 490

$ 351

$ (168)

$ 1,517

Income tax on core earnings (see above)

52

109

79

66

(12)

294

Core earnings (pre-tax)

$ 585

$ 420

$ 569

$ 417

$ (180)

$ 1,811

(1)

These items are disclosed under OSFI's Source of Earnings Disclosure (Life Insurance Companies) guideline.

Core earnings, CER basis

3Q21

(Canadian $ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Asia

Canada

U.S.

Global

WAM

Corporate

and Other

Total

Core earnings (post-tax)

$ 533

$ 311

$ 490

$ 351

$ (168)

$ 1,517

CER adjustment(1)

(8)

-

18

6

(4)

12

Core earnings, CER basis (post-tax)

$ 525

$ 311

$ 508

$ 357

$ (172)

$ 1,529

Income tax on core earnings, CER basis(2)

51

110

82

67

(12)

298

Core earnings, CER basis (pre-tax)

$ 576

$ 421

$ 590

$ 424

$ (184)

$ 1,827

(1)

The impact of updating foreign exchange rates to that which was used in 3Q22.

(2)

Income tax on core earnings adjusted to reflect the foreign exchange rates for the Statement of Income in effect for 3Q22.

Reconciliation of core earnings to net income attributed to shareholders

YTD 2022

($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Asia

Canada

U.S.

Global

WAM

Corporate

and Other

Total

Income (loss) before income taxes

$ 1,373

$ 1,923

$ 4,353

$ 1,143

$ (2,187)

$ 6,605

Income tax (expense) recovery

Core earnings

(209)

(345)

(259)

(168)

48

(933)

Items excluded from core earnings

35

(126)

(539)

-

164

(466)

Income tax (expense) recovery

(174)

(471)

(798)

(168)

212

(1,399)

Net income (post-tax)

1,199

1,452

3,555

975

(1,975)

5,206

Less: Net income (post-tax) attributed to

Non-controlling interests

(10)

-

-

1

1

(8)

Participating policyholders

(446)

242

15

-

-

(189)

Net income (loss) attributed to shareholders (post-tax)

1,655

1,210

3,540

974

(1,976)

5,403

Less: Items excluded from core earnings(1)

Investment-related experience outside of core

earnings

141

236

1,245

-

(348)

1,274

Direct impact of equity markets and interest rates and

variable annuity guarantee liabilities

43

(70)

134

-

(1,131)

(1,024)

Change in actuarial methods and assumptions

(45)

35

36

-

10

36

Restructuring charge

-

-

-

-

-

-

Reinsurance transactions, tax related items and other

(47)

-

799

-

(71)

681

Core earnings (post-tax)

$ 1,563

$ 1,009

$ 1,326

$ 974

$ (436)

$ 4,436

Income tax on core earnings (see above)

209

345

259

168

(48)

933

Core earnings (pre-tax)

$ 1,772

$ 1,354

$ 1,585

$ 1,142

$ (484)

$ 5,369

(1) These items are disclosed under OSFI's Source of Earnings Disclosure (Life Insurance Companies) guideline.

Core earnings, CER basis

YTD 2022

(Canadian $ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Asia

Canada

U.S.

Global

WAM

Corporate

and Other

Total

Core earnings (post-tax)

$ 1,563

$ 1,009

$ 1,326

$ 974

$ (436)

$ 4,436

CER adjustment(1)

(4)

-

25

10

2

33

Core earnings, CER basis (post-tax)

$ 1,559

$ 1,009

$ 1,351

$ 984

$ (434)

$ 4,469

Income tax on core earnings, CER basis(2)

209

345

264

169

(49)

938

Core earnings, CER basis (pre-tax)

$ 1,768

$ 1,354

$ 1,615

$ 1,153

$ (483)

$ 5,407

(1) The impact of updating foreign exchange rates to that which was used in 3Q22.

(2) Income tax on core earnings adjusted to reflect the foreign exchange rates for the Statement of Income in effect for 3Q22.

Reconciliation of core earnings to net income attributed to shareholders

YTD 2021

($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Asia

Canada

U.S.

Global

WAM

Corporate

and Other

Total

Income (loss) before income taxes

$ 2,504

$ 985

$ 1,870

$ 1,203

$ (918)

$ 5,644

Income tax (expense) recovery

Core earnings

(254)

(312)

(301)

(182)

35

(1,014)

Items excluded from core earnings

(107)

154

36

(1)

149

231

Income tax (expense) recovery

(361)

(158)

(265)

(183)

184

(783)

Net income (post-tax)

2,143

827

1,605

1,020

(734)

4,861

Less: Net income (post-tax) attributed to

Non-controlling interests

222

-

-

1

-

223

Participating policyholders

(491)

89

19

-

-

(383)

Net income (loss) attributed to shareholders (post-tax)

2,412

738

1,586

1,019

(734)

5,021

Less: Items excluded from core earnings(1)

Investment-related experience outside of core

earnings

255

239

1,283

-

(261)

1,516

Direct impact of equity markets and interest rates and

variable annuity guarantee liabilities

137

(329)

(852)

-

(171)

(1,215)

Change in actuarial methods and assumptions

343

(65)

(314)

-

(5)

(41)

Restructuring charge

-

-

-

-

(115)

(115)

Reinsurance transactions, tax related items and other

48

-

-

-

-

48

Core earnings (post-tax)

$ 1,629

$ 893

$ 1,469

$ 1,019

$ (182)

$ 4,828

Income tax on core earnings (see above)

254

312

301

182

(35)

1,014

Core earnings (pre-tax)

$ 1,883

$ 1,205

$ 1,770

$ 1,201

$ (217)

$ 5,842

(1) These items are disclosed under OSFI's Source of Earnings Disclosure (Life Insurance Companies) guideline.

Core earnings, CER basis

YTD 2021

(Canadian $ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Asia

Canada

U.S.

Global

WAM

Corporate

and Other

Total

Core earnings (post-tax)

$ 1,629

$ 893

$ 1,469

$ 1,019

$ (182)

$ 4,828

CER adjustment(1)

(22)

1

64

27

(2)

68

Core earnings, CER basis (post-tax)

$ 1,607

$ 894

$ 1,533

$ 1,046

$ (184)

$ 4,896

Income tax on core earnings, CER basis(2)

251

313

314

184

(34)

1,028

Core earnings, CER basis (pre-tax)

$ 1,858

$ 1,207

$ 1,847

$ 1,230

$ (218)

$ 5,924

(1) The impact of updating foreign exchange rates to that which was used in 3Q22.

(2) Income tax on core earnings adjusted to reflect the foreign exchange rates for the Statement of Income in effect for 3Q22.

Core earnings available to common shareholders($ millions, and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Quarterly Results

YTD Results

Full Year

Results

3Q22

2Q22

1Q22

4Q21

3Q21

2022

2021

2021

Core earnings

$ 1,322

$ 1,562

$ 1,552

$ 1,708

$ 1,517

$ 4,436

$ 4,828

$ 6,536

Less: Preferred share

dividends

(51)

(60)

(52)

(71)

(37)

(163)

(144)

(215)

Core earnings available to

common shareholders

1,271

1,502

1,500

1,637

1,480

4,273

4,684

6,321

CER adjustment(1)

-

18

15

24

12

33

68

92

Core earnings available to

common shareholders,

CER basis

$ 1,271

$ 1,520

$ 1,515

$ 1,661

$ 1,492

$ 4,306

$ 4,752

$ 6,413

(1) The impact of updating foreign exchange rates to that which was used in 3Q22.

Core ROE($ millions, unless otherwise stated)

Quarterly Results

YTD Results

Full Year

Results

3Q22

2Q22

1Q22

4Q21

3Q21

2022

2021

2021

Core earnings available to

common shareholders

$ 1,271

$ 1,502

$ 1,500

$ 1,637

$ 1,480

$ 4,273

$ 4,684

$ 6,321

Annualized core earnings

available to common

shareholders

$ 5,045

$ 6,022

$ 6,085

$ 6,483

$ 5,874

$ 5,714

$ 6,262

$ 6,321

Average common

shareholders' equity (see

below)

$ 49,129

$ 49,814

$ 51,407

$ 51,049

$ 49,075

$ 50,117

$ 47,601

$ 48,463

Core ROE (annualized) (%)

10.3 %

12.1 %

11.8 %

12.7 %

12.0 %

11.4 %

13.2 %

13.0 %

Average common

shareholders' equity

Total shareholders' and other

equity

$ 56,078

$ 55,500

$ 56,457

$ 58,408

$ 55,457

$ 56,078

$ 55,457

$ 58,408

Less: Preferred shares and

other equity

(6,660)

(6,660)

(5,670)

(6,381)

(5,387)

(6,660)

(5,387)

(6,381)

Common shareholders'

equity

$ 49,418

$ 48,840

$ 50,787

$ 52,027

$ 50,070

$ 49,418

$ 50,070

$ 52,027

Average common

shareholders' equity

$ 49,129

$ 49,814

$ 51,407

$ 51,049

$ 49,075

$ 50,117

$ 47,601

$ 48,463

Core EPS($ millions, and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Quarterly Results

YTD Results

Full Year

Results

3Q22

2Q22

1Q22

4Q21

3Q21

2022

2021

2021

Core EPS

Core earnings available to

common shareholders

$ 1,271

$ 1,502

$ 1,500

$ 1,637

$ 1,480

$ 4,273

$ 4,684

$ 6,321

Diluted weighted average

common shares outstanding

(millions)

1,904

1,924

1,942

1,946

1,946

1,923

1,946

1,946

Core earnings per share

$ 0.67

$ 0.78

$ 0.77

$ 0.84

$ 0.76

$ 2.22

$ 2.41

$ 3.25

Core EPS, CER basis

Core earnings available to

common shareholders, CER

basis

$ 1,271

$ 1,520

$ 1,515

$ 1,661

$ 1,492

$ 4,306

$ 4,752

$ 6,413

Diluted weighted average

common shares outstanding

(millions)

1,904

1,924

1,942

1,946

1,946

1,923

1,946

1,946

Core earnings per share,

CER basis

$ 0.67

$ 0.79

$ 0.78

$ 0.85

$ 0.77

$ 2.24

$ 2.44

$ 3.30

Global WAM AUMA reconciliation($ millions, and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

As at

Sept 30,

2022

June 30,

2022

March 31,

2022

December

31, 2021

Sept 30,

2021

Total invested assets

$ 411,292

$ 402,329

$ 409,401

$ 427,098

$ 419,087

Less: Non Global WAM total invested assets

407,551

398,362

405,933

422,640

414,754

Total Invested Assets – Global WAM

3,741

3,967

3,468

4,458

4,333

Total segregated funds net assets

$ 335,245

$ 334,903

$ 371,928

$ 399,788

$ 387,799

Less: Non Global WAM total segregated funds net assets

120,775

121,624

135,314

147,221

143,248

Total Invested Assets – Global WAM

214,470

213,279

236,614

252,567

244,551

Global WAM total invested assets and net segregated funds assets

$ 218,211

$ 217,246

$ 240,082

$ 257,025

$ 248,884

Global WAM AUMA

Total Invested Assets

$ 3,741

$ 3,967

$ 3,468

$ 4,458

$ 4,333

Segregated funds net assets

Segregated funds net assets - Institutional

4,118

4,098

4,338

4,470

4,400

Segregated funds net assets - Other

210,352

209,181

232,276

248,097

240,151

Total

214,470

213,279

236,614

252,567

244,551

Mutual funds

249,520

250,445

274,665

290,863

277,421

Institutional asset management(1)

100,361

100,205

101,105

106,407

103,732

Other funds

12,910

12,110

13,269

14,001

12,562

Total Global WAM AUM

581,002

580,006

629,121

668,296

642,599

Assets under administration

167,759

164,697

178,843

187,631

181,013

Total Global WAM AUMA

$ 748,761

$ 744,703

$ 807,964

$ 855,927

$ 823,612

Total Global WAM AUMA

$ 748,761

$ 744,703

$ 807,964

$ 855,927

$ 823,612

CER adjustment(2)

-

33,035

52,761

45,465

40,546

Total Global WAM AUMA, CER basis

$ 748,761

$ 777,738

$ 860,725

$ 901,392

$ 864,158

(1) Institutional asset management excludes Institutional segregated funds net assets.

(2) The impact of updating foreign exchange rates to that which was used in 3Q22.

Reconciliation of Global WAM core earnings to core EBITDA($ millions, pre-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Quarterly Results

YTD Results

Full Year

Results

3Q22

2Q22

1Q22

4Q21

3Q21

2022

2021

2021

Global WAM core earnings (post-tax)

$ 345

$ 305

$ 324

$ 387

$ 351

$ 974

$ 1,019

$ 1,406

Addback taxes, acquisition

costs, other expenses and

deferred sales commissions

Core income tax

(expense) recovery

(see above)

50

57

61

52

66

168

182

234

Acquisition costs, other

expenses

86

80

81

79

86

247

244

323

Deferred sales

commissions

23

25

24

25

26

72

74

99

Core EBITDA

$ 504

$ 467

$ 490

$ 543

$ 529

$ 1,461

$ 1,519

$ 2,062

Core EBITDA margin($ millions, unless otherwise stated)

Quarterly Results

YTD Results

Full Year

Results

3Q22

2Q22

1Q22

4Q21

3Q21

2022

2021

2021

Core EBITDA margin

Core EBITDA

$ 504

$ 467

$ 490

$ 543

$ 529

$ 1,461

$ 1,519

$ 2,062

Global WAM revenue

$ 1,542

$ 1,521

$ 1,586

$ 1,727

$ 1,680

$ 4,649

$ 4,814

$ 6,541

Core EBITDA margin

32.7 %

30.7 %

30.9 %

31.4 %

31.5 %

31.4 %

31.6 %

31.5 %

Expense efficiency ratio ($ millions, and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated)

Quarterly Results

YTD Results

Full Year

Results

3Q22

2Q22

1Q22

4Q21

3Q21

2022

2021

2021

Expense Efficiency Ratio

Core general expenses

$ 1,859

$ 1,843

$ 1,877

$ 1,973

$ 1,904

$ 5,579

$ 5,580

$ 7,553

Core earnings (pre-tax)

1,593

1,900

1,876

2,054

1,811

5,369

5,842

7,896

Total - Core earnings (pre-

tax) and Core general

expenses

$ 3,452

$ 3,743

$ 3,753

$ 4,027

$ 3,715

$ 10,948

$ 11,422

$ 15,449

Expense Efficiency Ratio

53.9 %

49.2 %

50.0 %

49.0 %

51.3 %

51.0 %

48.9 %

48.9 %

Core general expenses

General expenses - Financial

Statements

$ 1,900

$ 1,843

$ 1,898

$ 2,000

$ 1,904

$ 5,641

$ 5,828

$ 7,828

Less: General expenses

included in items excluded

from core earnings

Restructuring charge

-

-

-

-

-

-

150

150

Integration and

acquisition

-

-

8

-

-

8

-

-

Legal provisions and

Other expenses

41

-

13

27

-

54

98

125

Total

$ 41

$ -

$ 21

$ 27

$ -

$ 62

$ 248

$ 275

Core general expenses

$ 1,859

$ 1,843

$ 1,877

$ 1,973

$ 1,904

$ 5,579

$ 5,580

$ 7,553

Core general expenses

$ 1,859

$ 1,843

$ 1,877

$ 1,973

$ 1,904

$ 5,579

$ 5,580

$ 7,553

CER adjustment(1)

-

11

-

6

1

11

14

20

Core general expenses,

CER basis

$ 1,859

$ 1,854

$ 1,877

$ 1,979

$ 1,905

$ 5,590

$ 5,594

$ 7,573

(1) The impact of updating foreign exchange rates to that which was used in 3Q22.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS:From time to time, Manulife makes written and/or oral forward-looking statements, including in this document. In addition, our representatives may make forward-looking statements orally to analysts, investors, the media and others. All such statements are made pursuant to the "safe harbour" provisions of Canadian provincial securities laws and the U.S. Private Securities Litigation Reform Act of 1995.

The forward-looking statements in this document include, but are not limited to, statements with respect to among other things, our objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates, and can generally be identified by the use of words such as "may", "will", "could", "should", "would", "likely", "suspect", "outlook", "expect", "intend", "estimate", "anticipate", "believe", "plan", "forecast", "objective", "seek", "aim", "continue", "goal", "restore", "embark" and "endeavour" (or the negative thereof) and words and expressions of similar import, and include statements concerning possible or assumed future results. Although we believe that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements and they should not be interpreted as confirming market or analysts' expectations in any way.

Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements.

Important factors that could cause actual results to differ materially from expectations include but are not limited to: general business and economic conditions (including but not limited to the performance, volatility and correlation of equity markets, interest rates, credit and swap spreads, inflation rates, currency rates, investment losses and defaults, market liquidity and creditworthiness of guarantors, reinsurers and counterparties); the ongoing prevalence of COVID-19, including any variants, as well as actions that have been, or may be taken by governmental authorities in response to COVID-19, including the impacts of any variants; changes in laws and regulations; changes in accounting standards applicable in any of the territories in which we operate; changes in regulatory capital requirements; our ability to obtain premium rate increases on in-force policies; our ability to execute strategic plans and changes to strategic plans; downgrades in our financial strength or credit ratings; our ability to maintain our reputation; impairments of goodwill or intangible assets or the establishment of provisions against future tax assets; the accuracy of estimates relating to morbidity, mortality and policyholder behaviour; the accuracy of other estimates used in applying accounting policies, actuarial methods and embedded value methods; our ability to implement effective hedging strategies and unforeseen consequences arising from such strategies; our ability to source appropriate assets to back our long-dated liabilities; level of competition and consolidation; our ability to market and distribute products through current and future distribution channels; unforeseen liabilities or asset impairments arising from acquisitions and dispositions of businesses; the realization of losses arising from the sale of investments classified as available-for-sale; our liquidity, including the availability of financing to satisfy existing financial liabilities on expected maturity dates when required; obligations to pledge additional collateral; the availability of letters of credit to provide capital management flexibility; accuracy of information received from counterparties and the ability of counterparties to meet their obligations; the availability, affordability and adequacy of reinsurance; legal and regulatory proceedings, including tax audits, tax litigation or similar proceedings; our ability to adapt products and services to the changing market; our ability to attract and retain key executives, employees and agents; the appropriate use and interpretation of complex models or deficiencies in models used; political, legal, operational and other risks associated with our non-North American operations; geopolitical uncertainty, including international conflicts; acquisitions and our ability to complete acquisitions including the availability of equity and debt financing for this purpose; the disruption of or changes to key elements of the Company's or public infrastructure systems; environmental concerns, including climate change; our ability to protect our intellectual property and exposure to claims of infringement; and our inability to withdraw cash from subsidiaries.

Additional information about material risk factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found under "Risk Management and Risk Factors" and "Critical Actuarial and Accounting Policies" in the Management's Discussion and Analysis in our most recent annual report, under "Risk Management and Risk Factors Update" and "Critical Actuarial and Accounting Policies" in the Management's Discussion and Analysis in our most recent interim report, in the "Risk Management" note to the consolidated financial statements in our most recent annual and interim reports as well as elsewhere in our filings with Canadian and U.S. securities regulators.

The forward-looking statements in this document are, unless otherwise indicated, stated as of the date hereof and are presented for the purpose of assisting investors and others in understanding our financial position and results of operations, our future operations, as well as our objectives and strategic priorities, and may not be appropriate for other purposes. We do not undertake to update any forward-looking statements, except as required by law.

SOURCE Manulife Financial Corporation

For further information: Media Inquiries, Cheryl Holmes, (416) 557-0945, [email protected]; Investor Relations, Hung Ko, (416) 806-9921, [email protected]

Manulife Financial Corporation