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Sun Life reported ‘underlying’ net income of $1.09-billion or $1.96 a share for the quarter ended Dec. 31, compared with $965-million or $1.68 a share in the same period of 2024.FRED THORNHILL/Reuters
Canada’s two largest insurers beat analysts’ profit expectations for the last quarter of 2025 as the industry continues to show broad resilience to U.S trade wars and market volatility.
Both Sun Life Financial Inc. SLF-T and Manulife Financial Corp. MFC-T ended the year with strong profit gains across both their asset management divisions and individual and group life insurance sales.
Sun Life reported “underlying” net income of $1.09-billion or $1.96 a share for the quarter ended Dec. 31. The company earned $965-million or $1.68 a share in the same period of 2024.
Manulife also reported a jump in its fourth-quarter “core earnings” to $2-billion or $1.12 a share, compared with $1.91-billion or $1.03 a year earlier. The insurer also announced a 10-per-cent increase to its dividend to 49 cents per common share.
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Both insurers emphasize versions of earnings that strip out investment losses and make other accounting adjustments. Manulife calls its figure “core earnings,” while Sun Life describes its as “underlying net income.”
Sun Life and Manulife both beat analysts’ expectations, which were set at $1.87 a share and $1.06 a share, respectively, according to an RBC Capital Markets report.
The surge in profit came during a year that saw the U.S. trade war increase investor concerns and spark market volatility. But Sun Life chief executive officer Kevin Strain said the geopolitical risk has not yet created “big economic impacts” to the broader economy, which would affect insurers much more.
“Inflation is not much more despite the tariffs, equity markets have grown despite everything that’s going on, credit has been relatively benign and interest rates are almost favorable to the insurance industry,” Mr. Strain said in an interview with The Globe.
Mr. Strain – who travels frequently in his role – said he has seen a lot of interest around the world to work with Canada. In recent months, he has been able to join several trade missions with the federal government and the Business Council of Canada, including a trip in October with Prime Minister Mark Carney to Malaysia and a separate trip with the Business Council to Japan.
“We’re well received wherever we go,” he said.
Sun Life Financial reports $1.1-billion in quarterly profit, down year-over-year
Sun Life shares rose 6.3 per cent to $93.64 on Thursday as the insurer saw gains in Canada, Asia and the U.S. business segments, and are up 10.5 per cent from a year prior.
Manulife shares, meanwhile, slumped 5.2 per cent to $48.70, but are up 15.2 per cent from a year ago.
The fall in Manulife’s share price followed news that net income for its U.S business had dropped to US$229-million for the quarter, compared with US$294-million for the same period in 2024.
In an interview, Manulife chief financial officer Colin Simpson said the earnings shrinkage in the United States was owing to unfavourable life insurance claims for the region, specifically among high-net-worth clients.
Despite the U.S insurance segment – which he says is expected to improve in 2026, Mr. Simpson said insurers are often a place “where people have found comfort” during difficult times as the sector has been “attractively valued for a long time.”
“When we started the year with all the geopolitical noise around tariffs, it definitely felt like we were in for a world of volatility,” he said in an interview. “But we had a fantastic year from both a performance perspective and also from a share price perspective.”
Similar to its competitors, Mr. Simpson said Manulife makes the vast majority of its money from existing income streams and therefore is not linked to sales volatility that can occur in other industries, such as banking or property and casualty insurance.
However, despite record earnings for the quarter, both insurers saw U.S retail investors in their investment fund operations start to move money out of U.S. equities.
Mr. Simpson said the recent shift in market sentiment was largely owing to actively managed funds that were underweight in the Magnificent Seven – a group of high-performing technology companies such as Apple, Amazon and Microsoft.
The weaker performance, he said, moved a lot of retail investors into more passive index funds such as exchange-traded funds, while some steered their investments into safer havens such as cash.
Great-West Lifeco, the parent company of Canada’s third-largest insurer, Canada Life, also reported fourth-quarter earnings late Wednesday. Great-West reported earnings of $1.2-billion or $1.36 a share. That is up from $1.1-billion or a $1.20 a share a year earlier.
Editor’s note: An earlier version of this story incorrectly said the recent shift in market sentiment was largely owing to actively managed funds that were affected by the underperformance of the Magnificent Seven. The current version has been updated to say the shift in market sentiment was due to actively managed funds being underweight in the Magnificent Seven.
