Canadian traders contemplating insurance coverage shares face a tough selection between two business giants. Each firms simply reported their fourth-quarter 2025 earnings, and the numbers inform an fascinating story about the place every firm stands.
Manulife (TSX:MFC) and Solar Life (TSX:SLF) current completely different approaches to the life insurance coverage enterprise. Whereas each firms function globally and provide comparable merchandise, their strategic priorities and monetary efficiency current contrasting footage for traders looking for to allocate capital.
The selection between these two shares isn’t so simple as selecting the one with higher earnings. Every firm has distinct strengths, weaknesses, and progress methods that would enchantment to several types of traders.
Manulife delivers robust progress however faces U.S. headwinds
In 2025, Manulife grew core earnings per share by 8% yr over yr. The Toronto-based insurer generated $6.4 billion in money remittances and returned $5.5 billion to shareholders via buybacks and dividends.
Manulife’s contraction service margin grew by double digits. In Asia, new enterprise CSM was up over 20% for the sixth consecutive quarter.
Nonetheless, core earnings within the U.S. have been down 22% in This autumn as a consequence of unfavourable life insurance coverage claims expertise and decrease funding spreads. The corporate additionally skilled volatility in its different long-duration property (ALDA) portfolio, with a $232 million cost within the fourth quarter.
The TSX dividend-paying large ended This autumn with a LICAT (life insurance coverage capital adequacy check) ratio of 136%, which gives it with vital monetary flexibility. It additionally introduced a ten% enhance within the dividend and a brand new share buyback program totaling 42 million shares.
Solar Life posts document RoE with balanced efficiency
Solar Life delivered underlying EPS progress of 12% for 2025, beating its medium-term goal of 10%. It achieved an underlying return on fairness (ROE) of 18.2% for the yr, with fourth-quarter ROE hitting 19.1%.
In contrast to Manulife, Solar Life noticed robust performances throughout all enterprise segments. Its Asia enterprise delivered 50% year-over-year progress in safety gross sales, with Hong Kong gross sales greater than doubling.
Solar Life reported a 17% worth enhance on renewal enterprise for January 2026, positioning it effectively for improved margins. CEO Kevin Pressure emphasised the corporate’s scale benefit: “We’ve got the size, the information and underwriting benefits which have helped us create a sustainable earnings enterprise.”
The corporate’s asset administration enterprise exceeded its 2025 earnings goal, producing $242 million in comparison with a $235 million aim set 5 years in the past.
Solar Life is finishing buyouts of its non-public asset managers, BGO and Crescent, within the first half of 2026, thereby deepening possession and strengthening its different asset platform.
Solar Life ended the yr with a LICAT ratio of 157%, considerably increased than Manulife’s, and generated $4.2 billion in natural capital.
Which insurance coverage inventory wins for traders?
The reply is dependent upon what you worth as an investor.
Solar Life presents increased profitability metrics, with its 18.2% ROE considerably forward of Manulife’s 16.5% core ROE. The corporate’s medium-term goal of a 20% ROE suggests room for growth. Solar Life additionally maintained extra constant earnings throughout segments, avoiding the volatility Manulife skilled within the U.S.
Manulife trades at a decrease valuation and will provide better upside if it could actually resolve its U.S. challenges and keep momentum in Asia. The corporate’s aggressive give attention to synthetic intelligence may drive future effectivity beneficial properties. CEO Phil Witherington stated Manulife achieved 30% of its goal to generate $1 billion-plus in AI enterprise worth by 2027.
For income-focused traders, Manulife’s 10% dividend enhance alerts confidence in money era. For these prioritizing stability and constant execution, Solar Life’s balanced efficiency throughout all segments and better ROE make it engaging.
Each firms face macroeconomic uncertainty, however their diversified enterprise fashions present some safety. The ultimate selection comes down as to if you favor Manulife’s progress potential at a decrease valuation or Solar Life’s confirmed execution and superior profitability metrics.
