Sun Life and Manulife Surpass Forecasts with Strong Q4 Gains

In the fourth quarter of 2025, Canada’s largest insurers, Sun Life Financial Inc. and Manulife Financial Corp., both exceeded analysts’ profit forecasts, showcasing strong performance in a challenging economic landscape. The ongoing U.S.-China trade tensions and financial market volatility were key indicators influencing this resilience.

Strong Financial Results from Sun Life and Manulife

Sun Life reported “underlying” net income of $1.09 billion, translating to $1.96 per share for the quarter ending December 31, 2025. This is an increase from $965 million or $1.68 per share during the same period in 2024.

Similarly, Manulife announced a significant rise in its “core earnings,” reporting $2 billion or $1.12 per share. This reflects a rise from $1.91 billion or $1.03 per share in the previous year.

• Sun Life Q4 Results: $1.09 billion (Q4 2025) vs. $965 million (Q4 2024)
• Manulife Q4 Results: $2 billion (Q4 2025) vs. $1.91 billion (Q4 2024)

Market Resilience Amid Economic Challenges

Both companies attribute their earnings growth to their asset management units and individual and group life insurance sales. They emphasize profit figures that exclude investment losses and accounting adjustments, with Manulife referring to this as “core earnings” and Sun Life labeling it as “underlying net income.” Both exceeded analysts’ expectations, set at $1.87 per share for Sun Life and $1.06 per share for Manulife.

Sun Life’s CEO, Kevin Strain, noted that while geopolitical risks are present, they have not translated into significant adverse effects for the broader economy. He mentioned that inflation has remained steady, and equity markets have continued to advance despite existing challenges.

Market Reactions and Future Outlook

Sun Life’s shares rose by 6.3% to $93.64, marking a 10.5% increase from the previous year. Meanwhile, Manulife’s shares experienced a 5.2% decline to $48.70 but are still up 15.2% year-over-year. The drop in Manulife’s share price is largely attributed to a $229 million net income from its U.S. business, which fell from $294 million the previous year.

Manulife CFO Colin Simpson explained that this decline is due to unfavorable life insurance claims in the U.S., particularly among high-net-worth customers. However, he anticipates an improvement in the U.S. insurance segment by 2026.

Investor Sentiment and Market Shifts

Despite robust earnings, data showed U.S. retail investors began reallocating funds from U.S. equities to more stable investment options. This shift followed the underperformance of actively managed funds relative to a select group of high-performing technology stocks, often referred to as the “Magnificent Seven.”

Investors moved towards passive index funds and exchanged some holdings for cash as safety. Manulife’s management indicated that the insurance sector continues to serve as a refuge for investors during volatility.

Conclusion

Both Sun Life and Manulife’s strong fourth-quarter gains underscore their stability and adaptability amid external economic pressures. As the market evolves, these insurers remain well-positioned to navigate future challenges.