Manulife Financial Chief Executive Officer Roy Gori acknowledged Thursday that geopolitical uncertainty could be a problem, and he made the case for why life and annuity customers and investors should trust Manulife to get them through the storm.
Executives from many other life and annuity issuers have avoided saying much about the potential impact of President Donald Trump's actions on international relations and the economic environment in the past few weeks when going over their companies' earnings with securities analysts.
Gori, the head of the company that owns John Hancock, brought the topic up himself at the beginning of his company's analyst call.
Manulife expects to see "continued macroeconomic volatility and geopolitical uncertainty in 2025," Gori warned.
Later, an analyst asked Gori about how any new tariffs imposed by the United States or other countries could affect Manulife.
"I would say that 2024 was the year of macroeconomic volatility, and we're not expecting 2025 to be any different," Gori said. "There's a lot of discussion around trade wars and what the impact of that will be. Trade wars are not good for anyone. Obviously, there will be an impact to GDP, inflation and unemployment, but it's hard to predict how that's going to unfold."
Gori said Manulife's big, diversified investment portfolio should help the company navigate well through a volatile environment.
"Obviously, we're not going to be immune to any of the negative impacts that you see from unemployment and inflation creeping up," Gori said, adding that "we've done a lot over the last seven years to reduce our sensitivity to market movements, significantly reducing our equity market sensitivity as well as our interest rate sensitivity."
What it means: Manulife has been busy stormproofing, and it believes it's ready to get the clients who own its life insurance policies and annuities through the storm.
Gori may have also provided an example that agents and advisors can use when coming up with ways to discuss the current situation with clients.
Manulife: Manulife is one of the biggest financial services companies in Canada.
Its John Hancock unit is a big player in the U.S. individual life insurance market. John Hancock is also a large asset manager and the home for big closed blocks of annuities and long-term care insurance policies.
Manulife reports most of its results in Canadian dollars, in a different format than U.S.-based life and annuity issuers use.
The Toronto-based company recorded the equivalent of $4.1 billion in U.S. dollars in net income in 2024 on $690 billion in assets, up from $3.9 billion in net income on $617 billion in assets in 2023.
The U.S. operations reported $294 million in total core earnings for the fourth quarter of 2024 on $2.1 billion in revenue, down from $349 million in total core earnings on $2 billion in revenue for the fourth quarter of 2023.
One measure of sales, annualized premium equivalent sales, increased to $151 million, from $141 million.
The geopolitical backdrop: President Donald Trump has been preparing to impose an extra 25% tariff, or import tax, on goods from Canada. He was going to let the tariff take effect Feb. 1 but agreed to a 30-day delay.
Trump and his press secretary have also talked about making Canada the United States' 51st state.
Some Canadians have responded by avoiding purchases of U.S. goods. The Canadian government has proposed adding tariffs on goods Canadians import from the United States.
Roy Gori. Credit: Manulife
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.