Canadian buyers contemplating insurance coverage shares face a troublesome selection between two business giants. Each firms simply reported their fourth-quarter 2025 earnings, and the numbers inform an attention-grabbing 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 supply related merchandise, their strategic priorities and monetary efficiency current contrasting photos for buyers in search of 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 might attraction to several types of buyers.
Manulife delivers sturdy progress however faces U.S. headwinds
In 2025, Manulife grew core earnings per share by 8% 12 months over 12 months. The Toronto-based insurer generated $6.4 billion in money remittances and returned $5.5 billion to shareholders by way of 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. had been down 22% in This fall as a consequence of unfavourable life insurance coverage claims expertise and decrease funding spreads. The corporate additionally skilled volatility in its various long-duration property (ALDA) portfolio, with a $232 million cost within the fourth quarter.
The TSX dividend-paying big ended This fall with a LICAT (life insurance coverage capital adequacy take a look at) ratio of 136%, which gives it with vital monetary flexibility. It additionally introduced a ten% improve within the dividend and a brand new share buyback program totaling 42 million shares.
Solar Life posts file 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 12 months, with fourth-quarter ROE hitting 19.1%.
Not like Manulife, Solar Life noticed sturdy 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% value improve on renewal enterprise for January 2026, positioning it effectively for improved margins. CEO Kevin Pressure emphasised the corporate’s scale benefit: “We now have the size, the info 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 purpose 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 various asset platform.
Solar Life ended the 12 months with a LICAT ratio of 157%, considerably greater than Manulife’s, and generated $4.2 billion in natural capital.
Which insurance coverage inventory wins for buyers?
The reply relies on what you worth as an investor.
Solar Life provides greater 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 supply larger upside if it may possibly resolve its U.S. challenges and preserve momentum in Asia. The corporate’s aggressive deal with synthetic intelligence may drive future effectivity features. CEO Phil Witherington mentioned Manulife achieved 30% of its goal to generate $1 billion-plus in AI enterprise worth by 2027.
For income-focused buyers, Manulife’s 10% dividend improve indicators 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 like Manulife’s progress potential at a decrease valuation or Solar Life’s confirmed execution and superior profitability metrics.