Manulife and Sun Life: How Two Canadian Insurers Bet Their Future on Asia

Canada’s life insurers survived their home market’s saturation by exporting themselves, first to the United States and then, more profitably, to Asia. Manulife Financial reported record core earnings of C$7.5 billion in 2025, with C$3.0 billion coming from Asia, and in the first half of 2026 the region’s share of core earnings rose to roughly 45 per cent. Sun Life earned C$4.2 billion of underlying net income in 2025 and manages C$1.7 trillion of assets, with its Asia unit the fastest-growing segment. Together with Great-West Lifeco, controlled by the Desmarais family’s Power Corporation, the three groups form one of the world’s largest clusters of life-insurance capital, headquartered within a few blocks of each other in Toronto and Winnipeg. This article explains how the Asia bet was made, how the US legacy books are being cleaned up, and what the 2025 and 2026 numbers show. It is part of the Canada Company Stories hub.

Why did Canadian life insurers look abroad in the first place?

Canadian life insurers went abroad because their home market was small, mature and dominated by a handful of companies that had already divided it up. Manulife, founded in 1887 with Canada’s first prime minister, Sir John A. Macdonald, as its first president, was selling policies in Hong Kong and Shanghai by 1897. Sun Life, chartered in 1865, was operating in Asia by the 1890s and in India, the Philippines and Hong Kong before the First World War. The Asian presence survived decolonisation, war and the closure of mainland China to foreign insurers after 1949 largely because both companies kept their Hong Kong and Philippine offices open.

The modern strategy dates from the 1990s demutualisations. When Manulife, Sun Life and Canada Life converted from policyholder-owned mutuals to listed companies between 1999 and 2000, they gained the capital to make acquisitions, and the targets they chose defined the next quarter-century. Manulife bought John Hancock Financial in Boston in 2004 for about US$11 billion, the largest cross-border insurance deal of its time, which gave it a large US life, annuity and long-term care book. Sun Life bought Keyport Life and the MFS Investment Management business in the US and built a US group benefits operation. Great-West Lifeco, assembled by Power Corporation, bought Canada Life in 2003 and Putnam Investments in 2007.

Asia was the second bet, and the better one. As the region’s middle class grew and bancassurance channels opened, both Manulife and Sun Life invested in agency forces, bank partnerships and local joint ventures across Hong Kong, Singapore, Indonesia, Vietnam, the Philippines, Malaysia, mainland China (through Manulife-Sinochem) and India (through Sun Life’s Aditya Birla joint venture). The payoff was slow and then sudden: Asia’s share of Manulife’s core earnings rose from roughly a quarter in 2015 to about 45 per cent by 2026.

How did Asia become Manulife’s largest profit engine?

Asia became Manulife’s largest earnings segment because the region delivers both volume and margin. In 2025 Asia core earnings were C$2.97 billion, up 18 per cent on a constant-currency basis, out of total core earnings of C$7.52 billion. In the first quarter of 2026 Asia core earnings were C$820 million, about 45 per cent of the group total, and Asia produced C$2.19 billion of the group’s C$2.82 billion of annualised premium equivalent sales, or 78 per cent. In the second quarter Asia core earnings rose 21 per cent to US$616 million and APE sales rose 21 per cent again.

Hong Kong is the anchor, with a mature agency force and a stream of mainland Chinese visitors buying US-dollar policies, but the growth has broadened. Manulife completed the acquisition of Schroders’ Indonesian asset-management business in early 2026, adding C$3.5 billion of assets, and entered a strategic partnership with Legal & General. Its Asia operations are run from Hong Kong and Singapore, and in October 2026 the company announced a new Asia technology leadership structure to support its AI-driven underwriting and distribution tools.

The group’s structure reflects the shift. Chief executive Phil Witherington, who took over from Roy Gori in May 2025, had previously run Manulife Asia, and his first full-year results, announced on 11 February 2026, showed record core earnings of C$7.52 billion, core earnings per share up 8 per cent to C$4.21, core return on equity of 16.5 per cent, net income of C$5.57 billion, C$6.4 billion of remittances to the holding company and C$5.4 billion returned to shareholders through dividends and buybacks. The LICAT capital ratio stood at 136 per cent. Global Wealth and Asset Management, Manulife’s third leg, grew core earnings 14 per cent to C$1.93 billion despite net outflows of US$14.3 billion.

What is the long-term care problem and how is Manulife solving it?

Long-term care insurance is the legacy of Manulife’s John Hancock acquisition: policies sold mostly in the 1990s and 2000s that pay for nursing-home and home care, priced on assumptions about longevity, lapse rates and morbidity that turned out to be far too optimistic across the whole US industry. For two decades the LTC book acted as an anchor on Manulife’s valuation, because investors could not quantify the tail risk and the company had to hold large reserves against it.

Manulife’s answer has been a sequence of reinsurance transactions that transfer the risk to specialist reinsurers in exchange for a modest cost. The first, announced in December 2023 and closed in February 2024, ceded C$13 billion of reserves to Global Atlantic, including C$6 billion of LTC. The second, with Reinsurance Group of America, announced in November 2024 and closed on 1 January 2025, covered C$5.4 billion including C$2.4 billion of LTC. The third, announced with the Q2 2026 results on 5 August 2026, reinsured the biometric risk on a block of standalone LTC policies with C$3.2 billion of IFRS reserves on an 80 per cent quota-share basis with Munich American Reassurance Company, the US life arm of Munich Re. It closed on 1 October 2026.

The economics are deliberately unexciting. Manulife described the Munich Re deal as largely neutral to capital, with an annual drag on core earnings of about C$30 million in the first year that declines over time, and a cede cost of about 5 per cent on an IFRS basis. What the company gets in return is a 24 per cent cumulative reduction in LTC morbidity sensitivity and a simpler story for investors. Witherington said it was the third LTC deal in under three years and the first covering a standalone block, and that further organic actions on the portfolio, including the John Hancock Pathways wellness programme designed to delay claims, should raise risk-adjusted returns. The RGA deal did require Manulife to realise a C$0.7 billion loss on debt instruments sold to fund it, offset in other comprehensive income.

How does Sun Life’s strategy differ?

Sun Life’s strategy differs in that asset management and health benefits, rather than life insurance, drive most of its earnings, and its Asia business is smaller but growing at a similar pace. In 2025 Sun Life reported underlying net income of C$4.20 billion, up 9 per cent, reported net income of C$3.47 billion, up 14 per cent, underlying earnings per share of C$7.45, up 12 per cent, and an underlying return on equity of 18.2 per cent. By business type, asset management and wealth produced C$1.98 billion, group health and protection C$1.25 billion and individual protection C$1.35 billion. Assets under management reached C$1.605 trillion and the LICAT ratio was 157 per cent at the holding-company level.

The asset-management arm combines MFS Investment Management in Boston, a traditional active manager, with SLC Management, the alternatives platform Sun Life built by buying stakes in BentallGreenOak, Crescent Capital and InfraRed Capital Partners and then acquiring the remaining interests. The July 2026 acquisition of Bell Partners, a US multifamily real-estate manager, extends that platform. Financing the buy-out of the SLC affiliates raised corporate costs in 2025 and 2026, which is visible in the corporate segment’s larger underlying loss.

In the United States, Sun Life is the largest provider of medical stop-loss insurance for self-funded employer plans and a major dental benefits provider through its 2022 purchase of DentaQuest. Stop-loss drove a 43 per cent rise in US group sales in Q2 2026, while Medicaid dental, which caused a US$45 million impairment in 2025, remains the weak spot. In Asia, Sun Life’s underlying net income rose 18 per cent to C$222 million in Q2 2026 on Hong Kong growth, with individual insurance sales up 19 per cent to C$862 million and strong growth in India, Malaysia and Indonesia, although new-business contractual service margin slipped as competition in Hong Kong intensified.

Chief executive Kevin Strain, who has led the company since 2021, used the Q2 2026 results, with underlying net income of C$1.12 billion, up 11 per cent, and assets under management of C$1.70 trillion, to emphasise the diversified model and the company’s AI investments. Sun Life also made the most explicit domestic pledge of any insurer at the September 2026 Canada Investment Summit: C$5 billion for Canadian infrastructure over five years, conditional on Ottawa amending the Insurance Companies Act to allow insurers to hold infrastructure equity.

Sources: company results releases, February and August 2026; Power Corporation Q2 2026 release for Great-West Lifeco figures.

Where do Great-West Lifeco and Power Corporation fit?

Great-West Lifeco is the third member of the Canadian trio and the one with no Asian business, because its growth bet was the United States retirement market rather than Asian life insurance. The Winnipeg-based group, which owns Canada Life, Empower in the US and Irish Life in Europe, reported 2025 adjusted or base earnings of C$4.65 billion, up from C$4.19 billion, net earnings of C$3.96 billion and 12 per cent adjusted earnings-per-share growth, followed by Q2 2026 base earnings of C$1.27 billion and an adjusted return on equity of 19.3 per cent. Empower, built through the acquisitions of Great-West’s own US business, Personal Capital, MassMutual’s retirement unit and Prudential’s full-service retirement business, is now the second-largest US retirement record-keeper.

What distinguishes Lifeco is ownership. Power Corporation of Canada, the holding company controlled by the Desmarais family, owns 68.6 per cent of Lifeco and 63.9 per cent of IGM Financial, the wealth manager behind IG Wealth and Mackenzie Investments, and through those vehicles about 52 per cent of fintech Wealthsimple on an undiluted basis. Power’s adjusted net asset value per share rose from C$60.44 to C$85.77 during 2025 and to C$112.94 by June 2026, driven largely by the Lifeco share price and the revaluation of Wealthsimple to a C$10 billion post-money valuation. On 1 July 2026 James O’Sullivan, previously chief executive of IGM, succeeded Jeffrey Orr as Power’s president and chief executive, with Orr becoming vice-chair and Paul Desmarais Jr and André Desmarais remaining chairman and deputy chairman.

The Power structure gives Lifeco a patient controlling shareholder and a captive distribution network, but it also means the group has never had the capital flexibility to pursue a transformational Asian acquisition. Its answer has been Empower in the US and SLC-style alternatives through Sagard, Power’s private-markets arm, which manages roughly US$47 billion. The Wealthsimple story explains the fintech side of the same group.

What do the 2025 and 2026 results say about the Asia bet?

The results say the Asia bet is paying off and that the market is starting to price it. Manulife’s Asia core earnings grew 18 per cent in 2025 and 21 to 22 per cent in each of the first two quarters of 2026, well ahead of the group’s overall 3 per cent core earnings growth in 2025 and 12 per cent in Q2 2026. Canada, by contrast, saw Manulife’s core earnings fall 10 per cent in Q2 2026, and the US unit’s 55 per cent core earnings jump reflected easy comparisons rather than structural growth. Sun Life’s Asia underlying earnings rose 18 per cent in Q2 2026, faster than any other segment except Canada’s 23 per cent, which was flattered by favourable claims experience.

Capital generation confirms the picture. Manulife remitted C$6.4 billion to the holding company in 2025, bought back 54.4 million shares for C$2.4 billion, raised its dividend 10.2 per cent and announced a further buyback of up to 2.5 per cent of shares for 2026, with C$2.6 billion returned to shareholders in the first half of 2026 alone. Sun Life repurchased 20.7 million shares for C$1.71 billion in 2025 and paid C$1.98 billion of common dividends, a 47 per cent payout ratio. Both companies are generating more capital than their home market can absorb, which is why Asia and alternatives get the incremental investment.

The one weak spot is wealth and asset management flows. Manulife’s Global WAM had net outflows of US$14.3 billion in 2025 and C$4.4 billion in Q1 2026, and Sun Life’s asset-management arm swung from C$14.2 billion of outflows in Q2 2025 to C$2.1 billion of inflows a year later. MFS in particular has struggled against passive competition, and both insurers are responding by building private-markets capabilities that command higher fees.

What are the biggest risks for Manulife and Sun Life?

There are also domestic policy risks. Ottawa’s push for insurers to invest in Canadian infrastructure comes with the implicit expectation of returns below what the same capital earns in US private credit, and the proposed amendments to the Insurance Companies Act will need to be matched by capital rules at OSFI that make infrastructure equity economic. The insurers’ large group-benefits businesses are also exposed to the evolving debate over private healthcare delivery in Canada, which could change what employer plans are expected to cover.

What can founders and investors learn from Manulife and Sun Life?

The first lesson is that geographic bets take decades to pay off and must be made before the market proves them. Manulife and Sun Life kept Asian offices open through periods when they contributed almost nothing, and the result is a distribution footprint that no new entrant can replicate. Founders expanding internationally should expect the payoff curve to be back-loaded and plan their capital accordingly.

The second lesson is about cleaning up legacy risk methodically. Manulife did not try to sell the whole LTC book in one dramatic transaction; it executed three deals over three years, each sized to what the reinsurance market could absorb at an acceptable price, and communicated the cumulative effect in a single metric, morbidity sensitivity, that investors could track. Any company carrying a legacy liability can borrow that approach.

The third lesson is that ownership structure shapes strategy. Manulife and Sun Life, widely held since demutualisation, could pursue large acquisitions and aggressive buybacks; Great-West Lifeco, controlled by Power Corporation, built a US retirement champion instead but never made the Asian bet. Neither path is wrong, but investors should understand which one a company is on. For a comparison with how the Big Six banks handled the same home-market saturation, see the companion story, and for a European perspective on insurers exporting themselves, the UK Company Stories hub covers Prudential’s own Asian pivot.

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