Ratings of Manulife Financial Corporation and Its Subsidiaries

AM Best Affirms Manulife’s Strong Credit Ratings as Life Insurance Giant Strengthens Global Financial Position

        Manulife Financial Corporation (NYSE: MFC), one of the world’s largest life and health insurance groups, has once again demonstrated its financial resilience. AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (ICRs) of “aa-” (Superior) for Manulife’s life and health insurance subsidiaries. The outlook for all affirmed ratings remains stable, underscoring confidence in Manulife’s balance sheet strength, earnings stability, and enterprise risk management framework.

For investors, policyholders, and institutional stakeholders, these ratings reinforce Manulife’s standing as a top-tier global life insurance company operating across Canada, the United States, and Asia.

Strong Balance Sheet Drives Superior Insurance Ratings

        AM Best’s assessment highlights Manulife’s very strong balance sheet strength, supported by robust risk-adjusted capital levels and disciplined financial management. Capital adequacy remains a core pillar of the insurer’s credit profile, measured through Canada’s Life Insurance Capital Adequacy Test (LICAT) and AM Best’s proprietary Best’s Capital Adequacy Ratio (BCAR).

        Recent quarters show Manulife’s LICAT ratio trending upward, reflecting improving capital buffers. At the same time, BCAR metrics have strengthened further, moving firmly into the “very strong” category. This improvement signals Manulife’s enhanced ability to absorb market volatility, interest rate shocks, and insurance risk exposure.

        Financial flexibility also plays a key role. The company continues to utilize debt and alternative financing instruments strategically, while maintaining moderate financial leverage and strong interest coverage ratios that remain well within rating guidelines.

Risk Reduction Strategy Enhances Long-Term Stability

        Over the past several years, Manulife has taken decisive action to de-risk its insurance portfolio, particularly in legacy and capital-intensive segments. Billions of dollars in low return-on-equity and non-core business lines have been reinsured, with a strong focus on long-term care insurance exposures.

        This proactive approach has significantly reduced earnings volatility and reserve risk, strengthening Manulife’s long-term financial outlook. For the life insurance industry, this strategy reflects a broader shift toward capital efficiency and sustainable profitability.

Diversified Earnings Support Operating Performance

        From an operating performance perspective, AM Best notes Manulife’s history of stable and recurring earnings. While results may fluctuate year to year due to market conditions, the insurer continues to deliver favorable performance across its core businesses.

        Manulife benefits from a diversified business model, combining life insurance, health insurance, wealth management, and asset management solutions. Geographic diversification across Asia, Canada, and the United States further reduces reliance on any single market.

        In particular, Manulife holds strong market positions in several high-growth Asian markets, where rising middle-class wealth and demand for insurance protection continue to support long-term premium growth. This global footprint enhances revenue stability and strengthens the company’s overall business profile.

Enterprise Risk Management Remains a Key Strength

        AM Best assigns Manulife a very strong Enterprise Risk Management (ERM) assessment, reflecting disciplined governance, advanced risk analytics, and comprehensive oversight across business lines.

        The ERM framework supports effective management of investment risk, insurance underwriting risk, operational risk, and regulatory risk. This capability is increasingly important as insurers navigate volatile financial markets, evolving capital regulations, and complex product structures.

For institutional investors and reinsurers, a strong ERM program is a critical factor in evaluating long-term creditworthiness and counterparty risk.

Residual Risks and Conservative Mitigation

        Despite these strengths, AM Best notes that Manulife retains exposure to certain non-core business blocks, including long-term care insurance and universal life products with secondary guarantees. These segments still represent a meaningful portion of total reserves.

        However, management has implemented conservative mitigation strategies, including loss prevention initiatives, policy conversion programs, additional reinsurance, and prudent reserving practices. While alternative long-duration asset portfolios have experienced some volatility, they have historically enhanced investment yields and contributed to portfolio diversification.

Overall, these risks are viewed as manageable within Manulife’s strong capital and governance framework.

Growth Initiatives: AI and Emerging Markets

        Looking ahead, Manulife is investing heavily in generative artificial intelligence to improve operational efficiency, customer experience, and risk assessment. AI-driven automation and analytics are expected to enhance productivity across underwriting, claims processing, and customer service functions.

        Additionally, the company plans to enter the Indian life insurance market through a joint venture, subject to regulatory approval. While this expansion introduces execution and regulatory risk, it also offers access to one of the world’s fastest-growing insurance markets.

For long-term investors, these initiatives reflect Manulife’s strategy to balance innovation and growth with disciplined risk management.

Ratings Affirmed Across Major Insurance Subsidiaries

AM Best affirmed the A+ (Superior) Financial Strength Rating and “aa-” (Superior) Long-Term ICRs for key life and health insurance subsidiaries, including:

• The Manufacturers Life Insurance Company
• John Hancock Life Insurance Company (U.S.A.)
• John Hancock Life Insurance Company of New York
• John Hancock Life & Health Insurance Company

These ratings confirm strong capitalization, earnings capacity, and policyholder protection across Manulife’s major operating entities.

Debt and Preferred Share Ratings Remain Stable

        In addition to insurance subsidiaries, AM Best affirmed multiple Long-Term Issue Credit Ratings for Manulife Financial Corporation and affiliated entities. These include senior unsecured debt, subordinated debentures, limited recourse capital notes, and preferred shares across various maturities.

        The stable outlook across these instruments reflects confidence in Manulife’s ability to service debt obligations under a wide range of economic scenarios. For income-focused investors, these ratings provide important signals regarding credit quality and downside risk.

Why This Matters for Investors and Policyholders

        For policyholders, strong AM Best ratings signal a high degree of financial security and claims-paying ability. For investors, the affirmation supports Manulife’s profile as a high-quality insurance stock with disciplined capital management and global growth exposure.

In an environment marked by interest rate uncertainty, regulatory scrutiny, and rising insurance risk, Manulife’s consistent credit strength positions it favorably among global life insurers.

A Stable Outlook for a Global Insurance Leader

        AM Best’s reaffirmation of Manulife’s superior ratings highlights the insurer’s strong balance sheet, diversified earnings base, and effective risk management. While challenges remain in legacy insurance blocks and expansion initiatives, Manulife’s conservative strategy and capital discipline provide a solid foundation for sustainable growth.

As global demand for life and health insurance continues torise, Manulife appears well-positioned to deliver long-term value for policyholders, investors, and partners alike.