Manulife Financial Corporation

Good morning, ladies and gentlemen. Welcome to the Manulife Financial fourth quarter 2024 results conference call. I would like to turn the meeting over to Mr. Han Ko. Please go ahead, Mr. Ko.

Thank you. Welcome to Manulife's earnings conference call to discuss our fourth quarter and full year 2024 financial and operating results. Our earnings materials, including the webcast slides for today's call, are available on the Investor Relations section of our website at manulife.com. Before we start, please refer to slide two for a caution on forward-looking statements and slide 42 for a note on non-GAAP and other financial measures used in this presentation. Please note that certain material factors or assumptions applied in making forward-looking statements and actual results may differ materially from what is stated. Turning to slide four, we'll begin today's presentation with Roy Gorey, our President and Chief Executive Officer, who will provide a highlight of our full year 2024 results and a strategic update. Our incoming President and Chief Executive Officer will also provide some remarks before we hand it over to Colin Simpson, our Chief Financial Officer, who will discuss the company's financial and operating results in more detail. After their prepared remarks, we'll move to the live Q&A portion of the call. With that, I'd like to turn the call over to Roy Gorey, our President and Chief Executive Officer. Roy.

Thanks, Hung, and thank you everyone for joining us today. Yesterday, we announced our fourth quarter and full year 2024 financial results. 2024 was a banner year for Manulife on many fronts, and we continued the momentum and finished the year with very strong results. During 2024, we further accelerated the growth of our highest potential businesses, led by Asia and Global WAM, which contributed to 70% of our record core earnings that exceeded $7 billion for the first time. This is a 10 percentage point increase since 2023. These results were supported by strong top line metrics with record AP sales, new business CSM and new business value in Asia and $13.3 billion of net inflows generated by our global WAM business. We also executed several milestone transactions to reshape our portfolio towards higher return and lower risk. You'll recall that in February of 2024, we closed the largest ever LTC reinsurance transaction at attractive terms with Global Atlantic, which was instrumental in establishing an active LTC reinsurance market. And then in April, we closed the largest ever Canadian universal life reinsurance transaction with another highly experienced strategic partner, RGA. This was followed by another LTC deal in less than 12 months when we announced a reinsurance transaction with RGA in November on a younger block. This deal recently closed in early January. In addition to further validating the prudence of our reserves and assumptions, these transactions will unlock significant value for our shareholders with an expected capital release of $2.8 billion. as well as a 0.4 percentage point accretion to our core ROE on a cumulative basis. Moving to slide seven. To support our strong operating momentum, we've been driving relentlessly towards our ambition of becoming the most digital, customer-centric company in our industry. Throughout 2024, we've been raising the bar for our customers and continue to enhance their experience through our digital initiatives, including the launch of a generative AI sales tool in Asia and the implementation of a new retail wealth platform in Canada for advisors. These efforts contributed to our record high relationship MPS of 27, a four point increase from the prior year. and an SCP of 89% that has exceeded our 2025 target of 88%. In addition, we remain focused on investing in our future by rolling out our advanced GenAI capabilities across the company. By the end of 2024, we've launched 27 use cases into production, with another 32 in development. And as we continue to scale these use cases across all areas of our business, we've now generated over $600 million of benefits from our digital initiatives globally in 2024, which was more than three and a half times the level we achieved in 2023. These successes are underpinned by continued investment in our digital capabilities. In addition to the $1 billion we've invested prior to 2023, as mentioned at our investor day, we are committed to invest another billion dollars between 2023 and 2025. As of the end of 2024, we've deployed nearly $600 million to improve our digital capabilities and efficiency. While we accelerate our digital transformation, we also remain disciplined in our overall expense management across the franchise and achieved an efficiency ratio of 44.8%. which is already in line with our medium term target of below 45%. As I've said many times before, none of these achievements would have been possible without our world class team, who have time and time again demonstrated strong execution against our targets. As shown on slide eight, I'm proud to see our winning and high performing team together with the strong culture that we've built recognized by many leading organizations. For the fifth consecutive year, we also achieved top quartile employee engagement scores. As highlighted at our Investor Day, we have a portfolio that is not only high growth and high return, but also highly cash generative. In 2024, our global business generated strong remittances of $7 billion, which was a record. and we've been diligently returning capital to shareholders through dividends and share buybacks totaling over $6 billion. To continue this momentum, I'm pleased to note that yesterday our board approved another 10% increase in our common share dividend. In addition, we announced yesterday the launch of a new buyback program to repurchase up to 3% of our outstanding common shares commencing in late February 2025. We continue to view buybacks as a good tool to deploy our capital to generate shareholder value. And based on our current share price, our share buybacks since 2021 have generated a benefit of approximately $3 billion as at the end of 2024. Onto slide nine, where you'll see a snapshot of our strong financial and operating results in 2024. We've delivered record AP sales, new business CSM and new business value in 2024, reflecting growth of 30% and higher. In fact, we achieved our four best quarters ever for all three metrics. Global WAM also generated another year of net inflows, and this adds to the impressive record of positive net inflows in 14 out of the last 15 years. We generated strong core EPS growth of 11% supported by our Asia and global WAM businesses. Excluding the impact of global minimum taxes, core EPS growth would have been 14%. Well above our medium term target of 10 to 12%. The strong earnings growth contributed to the continued expansion of our core ROE to 16.4% for the full year. which clearly demonstrates that we're well on track to deliver on our 2027 target of 18% plus. We've also delivered robust book value growth over the year at 15% in both adjusted book value and book value per share, while returning over $6 billion of capital to our shareholders. and we maintained a strong balance sheet with significant financial flexibility supported by our strong LICAT ratio of 137% and leverage ratio of 23.7%. As I reflect on the successes that we've achieved and the momentum that we've built, I could not be prouder to have led such a high performing organization. We've transformed Manulife and positioned our franchise to reach even greater heights. I'm going to touch on just a few of these highlights in the next slide. Over the span of seven years, we've significantly grown the earnings contribution from our highest potential businesses by 16 percentage points from 54% to 70%. As we changed our business mix over time, we also significantly expanded our core ROE by 5.1 percentage points from 11.3% to 16.4%. From a book value perspective, we generated substantial growth of 96%, or $18.13 per share, while returning nearly $25 billion of capital through dividends and share buybacks over this period. This includes a cumulative growth of 95% on our annual dividend per common share from $0.82 per share to $1.40 per share. With these results as our foundation, we've delivered top quartile total shareholder return of 137% over the last seven years. And we're set to reach even greater heights in the next phase of our journey. While we expect to see continued macroeconomic volatility and geopolitical uncertainty in 2025, our diverse footprint and businesses, supported by our strong balance sheet and financial flexibility, position us well to navigate such environments. I'm confident that we will continue to capitalise on the strong momentum. And as I've said before, I can't think of a better incoming CEO to lead us into the next chapter than Phil Witherington. With that, before we have Colin provide highlights on the financial results, I'd like to pass it over to Phil for a few words. Phil, over to you.