report to shareholders q1 2024

First Quarter Report to Shareholders

Three months ended

March 31, 2024

Manulife Financial Corporation

Manulife Financial Corporation ("Manulife" or the "Company") reported its first quarter results for the period ended March 31, 2024, delivering strong core ROE and topline growth, and closing the largest long-term care ("LTC") reinsurance transaction in the industry.

Key highlights for the first quarter of 2024 ("1Q24") include:

• Core earnings1 of $1.8 billion, up 16% on a constant exchange rate basis2 from the first quarter of 2023 ("1Q23")
• Net income attributed to shareholders of $0.9 billion, down $0.5 billion from 1Q23. Excluding the impact of the reinsurance transaction with Global Atlantic (the "GA Reinsurance Transaction"), which had a largely neutral impact on book value, 1Q24 net income attributed to shareholders was $1.6 billion1, up $0.2 billion from 1Q23
• Core EPS3 of $0.94, up 20%2 from 1Q23. EPS of $0.45, down 38%2 from 1Q23. Excluding the impact of the GA Reinsurance Transaction, EPS was $0.873, up 21%2 from 1Q23
• Core ROE3 of 16.7% and ROE of 8.0%. Excluding the impact of the GA Reinsurance Transaction, ROE was 15.5%3
• LICAT ratio4 of 138%
• APE sales 21% higher5, new business CSM up 52%2 and new business value ("NBV") up 34%5 from 1Q236
• Global Wealth and Asset Management ("Global WAM") net inflows5 of $6.7 billion, up from $4.4 billion in 1Q23

"After a milestone year for Manulife, we continued to show strong momentum in 1Q24 by delivering superior results, including 20% core EPS growth, an increase of 11% in adjusted book value per common share3, and record level APE sales with double-digit growth across each of our insurance segments. We again demonstrated a disciplined focus on execution by closing the largest ever LTC reinsurance transaction in the first quarter and entering the largest ever universal life reinsurance agreement in Canada. I'm excited by our momentum in the first quarter and by the opportunities ahead of us to continue generating shareholder value."

• Roy Gori, Manulife President & Chief Executive Officer

"We had a strong start to 2024 with record levels of new business CSM and new business value, reflecting 52% and 34% growth, respectively. Global WAM saw strong net inflows of $6.7 billion, and our capital position remains robust with a LICAT ratio of 138%. Looking ahead, we remain committed to further improving ROE through disciplined capital allocation and continued business performance improvements."

• Colin Simpson, Manulife Chief Financial Officer

1. Core earnings and net income attributed to shareholders excluding the impact of the GA Reinsurance Transaction are non-GAAP financial measures. For more information on non-GAAP and other financial measures, see "Non-GAAP and other financial measures" in our 1Q24 Management's Discussion and Analysis ("1Q24 MD&A").
2. Percentage growth / declines in core earnings, diluted core earnings per common share ("core EPS"), diluted earnings (loss) per share ("EPS"), EPS excluding the impact of the GA Reinsurance Transaction, and new business contractual service margin net of NCI ("new business CSM") are stated on a constant exchange rate basis and are non-GAAP ratios.
3. Core EPS, EPS excluding the impact of the GA Reinsurance transaction, core ROE, ROE excluding the impact of the GA Reinsurance Transaction and adjusted book value per common share ("adjusted BV per common share") are non-GAAP ratios.
4. Life Insurance Capital Adequacy Test ("LICAT") ratio of The Manufacturers Life Insurance Company ("MLI") as at March 31, 2024. LICAT ratio is disclosed under the Office of the Superintendent of Financial Institutions Canada's ("OSFI's") Life Insurance Capital Adequacy Test Public Disclosure Requirements guideline.
5. For more information on annualized premium equivalent ("APE") sales, NBV and net flows, see "Non-GAAP and other financial measures" in our 1Q24 MD&A. Percentage growth/decline in APE sales, NBV and net flows are stated on a constant exchange rate basis.
6. Refer to "Result at a Glance" for 1Q24 and 1Q23 results.

Strategic Highlights

We are delivering against our strategy to optimize our portfolio

In the first quarter, we closed a milestone reinsurance transaction with Global Atlantic on four in-force blocks of legacy/low ROE business, including the largest LTC reinsurance deal in history. We have commenced a share buyback program to retucapital released from this transaction to our shareholders.

In Canada, we entered into the largest universal life reinsurance agreement of its kind. The transaction, which closed on April 2, 2024, transferred $5.6 billion of insurance contract net liabilities to RGA Canada1. The expected capital release of $0.8 billion represents an attractive 16.2 times earnings multiple and will be returned to shareholders through an ordinary share repurchase program.2

In Asia, we continued to roll out our top-tier recognition and activation program, Manulife Pro, across the region with the recent expansion to Indonesia and Japan. The program provides selected agents with differentiated resources and tools, including dedicated underwriting support and enhanced customer engagement services with access to customer leads.

In Global WAM, we announced the closing of a $1.0 billion institutional fund - Manulife Capital Partners VII. The fund will invest in U.S. middle market companies across multiple industries, focusing on growth and high-yield opportunities.

In addition, we partnered with the Indonesia Investment Authority sovereign wealth fund to raise and manage funds for investment. The partnership involves co-investments between the sovereign wealth fund, Manulife, and third-party investors in Indonesian infrastructure, real estate, and the natural capital sectors, which include timberland and agriculture assets.

We are enhancing our digital leadership, delivering better customer experience and superior distribution capabilities

In Asia, we completed the roll-out of M-Pro, a first-in-market digital pre-issuance verification tool, to all distribution channels in Vietnam. M-Pro has further improved customer experience and we have received outstanding feedback on the ease of navigating policy issuance details, ability to review crucial policy information and transparency of the consultation process.

In the U.S., we accelerated our distribution team's ability to act on sales opportunities and improved their efficiency in assisting agents by implementing JHINI - our new, AI-powered, sales enablement tool.

In addition, we streamlined our underwriting process and improved our John Hancock customers' experience by expanding our usage of electronic health records and leveraging other types of underwriting evidence, which have allowed us to eliminate certain medical test requirements for all ages and face amounts.

In Global WAM, we completed the implementation of a new advisor retail wealth platform in Canada as part of our digital transformation strategy, representing more than $54 billion in AUMA, by leveraging an industry leading technology platform. The platform delivers an enhanced advisor and client experience and enables advisors to streamline their processes.

We are helping our customers live longer, healthier, and better lives

In Canada, we entered into a multi-year loyalty rewards partnership agreement with Aeroplan. Beginning in early summer 2024, eligible Manulife group benefits members will be able to earewards points using our group benefits digital platforms by engaging in behaviours and activities that encourage health and well-being.

In the U.S., we drove a 43% improvement compared with 1Q23 in the number of visits to the Vitality page of JohnHancock.com supported by the launch of Your Year in Wellness - our first social-sharing campaign to raise awareness about the value of John Hancock Vitality.

1. RGA Life Reinsurance Company of Canada. Insurance contract net liabilities as of March 31, 2024.
2. See "Caution regarding forward-looking statements" below. Expected capital release and earnings multiple estimates were as of December 31, 2023.

Delivered strong core earnings growth, while net income reflected the impact of the GA Reinsurance Transaction with largely neutral impact to book value1

Core earnings of $1.8 billion in 1Q24, up 16% from 1Q23

The 16% year-over-year increase in core earnings reflects strong business growth across our insurance businesses and higher fee income in Global WAM benefitting from favourable market impacts and positive net flows. Core earnings increased 39% in Asia and 25% in Global WAM compared with 1Q23. The provision for expected credit loss was a modest net release in 1Q24 compared with a net charge in 1Q23, reflecting a benign credit experience this quarter. Updates to actuarial methods and assumptions in the second half of 2023 also contributed to core earnings growth. These were partially offset by modestly more adverse insurance experience, and higher workforce-related costs primarily reflecting strong TSR2 performance. The net impact of the GA Reinsurance Transaction on core earnings was a $18 million charge in 1Q24.

Net Income attributed to shareholders of $0.9 billion in 1Q24, $0.5 billion lower compared with 1Q23

The $0.5 billion decrease in net income reflects the $0.8 billion impact from the GA Reinsurance Transaction, partially offset by core earnings growth. Most of the GA Reinsurance Transaction impact is from the sale of debt instruments related to the transaction, which, is broadly offset by an associated change in Other Comprehensive Income resulting in a neutral impact to book value. This, along with lower-than-expected returns on alternative long-duration assets and higher-than-expected returns on public equity, resulted in a $0.8 billion market experience loss in 1Q24. The overall book value per common share increased 5% compared with 1Q23.

Record levels of new insurance business results and strong net inflows in Global WAM

Continued momentum in our 1Q24 new business results with year-over-year growth across all insurance segments, resulting in increases of 21%, 52% and 34% in APE sales, new business CSM and NBV, respectively

• In Asia, APE sales increased 13% from 1Q23, driven by growth in Asia Other and Japan, partially offset by lower sales in Hong Kong. Business mix and the impact of updates to actuarial methods and assumptions in the prior year further contributed to a 68% growth in new business CSM. NBV also increased 28% compared with 1Q23. The improvement in NBV margin was driven by our pricing discipline and changes in business mix.
• Canada generated 54% growth in APE sales, driven by higher sales volumes in all business units, led by large-case Group Insurance sales. Combined with margin expansion in our insurance businesses, NBV and new business CSM increased 71% and 52%, respectively.
• In the U.S., APE sales increased 14%, reflecting an increase in demand from affluent customers for accumulation insurance products. Combined with product mix, this led to a 3% and 9% increase in new business CSM and NBV, respectively.

Global WAM net inflows of $6.7 billion in 1Q24, increased $2.3 billion compared with $4.4 billion in 1Q23

1. • Retirement net inflows of $3.2 billion in 1Q24 increased from $1.2 billion in 1Q23, reflecting higher new retirement plan sales across our three geographies.
   • Retail net inflows of $1.7 billion in 1Q24increased from $0.8 billion in 1Q23, driven by increased demand for investment products amid equity market recovery and improved investor sentiment.
   • Institutional Asset Management net inflows of $1.8 billion in 1Q24 decreased compared with $2.5 billion in 1Q23 as higher fixed income mandates sales and lower money market redemptions were more than offset by higher redemptions in fixed income and equity mandates.
2. See section A1 "Profitability" in our 1Q24 MD&A for more information on notable items attributable to core earnings and net income attributed to shareholders.
3. Total shareholder retu("TSR").

Increase in CSM balance driven by organic CSM growth and favourable impact of markets

CSM net of NCI1 was $21,089 million as at March 31, 2024

CSM net of NCI increased $649 million compared with December 31, 2023. Organic CSM movement was an increase of $314 million in 1Q24, primarily driven by the impact of new business and interest accretion, partially offset by amortization recognized in core earnings. Insurance experience improved both quarter-over-quarter and year-over-year. Inorganic CSM movement was an increase of $335 million for the same period, primarily driven by the favourable impacts of equity market performance and changes in foreign currency exchange rates, partially offset by the impact of the GA Reinsurance Transaction. Post-tax CSM net of NCI2 was $18,547 million as at March 31, 2024.

1. Non-controllinginterests ("NCI").
2. Post-tax contractual service margin net of NCI ("post-tax CSM net of NCI") is a non-GAAP financial measure. For more information on non-GAAP and other financial measures, see "Non-GAAP and other financial measures" in our 1Q24 MD&A.

MANAGEMENT'S DISCUSSION AND ANALYSIS

This Management's Discussion and Analysis ("MD&A") is current as of May 8, 2024, unless otherwise noted. This MD&A should be read in conjunction with our unaudited Interim Consolidated Financial Statements for the three months ended March 31, 2024 and the MD&A and audited Consolidated Financial Statements contained in our 2023 Annual Report.

For further information relating to our risk management practices and risk factors affecting the Company, see "Risk Management and Risk Factors" and "Critical Actuarial and Accounting Policies" in the MD&A in our 2023 Annual Report ("2023 MD&A") and the "Risk Management" note to the Consolidated Financial Statements in our most recent annual and interim reports.

In this MD&A, the terms "Company", "Manulife", "we" and "our" mean Manulife Financial Corporation ("MFC") and its subsidiaries. All amounts are reported in Canadian dollars, unless otherwise indicated. Any information contained in, or otherwise accessible through, websites mentioned in this MD&A does not form a part of this document.

CONTENTS

1. This item is a non-GAAP financial measure. See "Non-GAAP and other financial measures" below for more information.
2. This item is a non-GAAP ratio. See "Non-GAAP and other financial measures" below for more information.

Manulife's net income attributed to shareholders was $866 million in the first quarter of 2024 ("1Q24") compared with $1,406 million in the first quarter of 2023 ("1Q23"). Net income attributed to shareholders is comprised of core earnings (consisting of items we believe reflect the underlying earnings capacity of the business), which amounted to $1,754 million in 1Q24 compared with $1,531 million in 1Q23, and items excluded from core earnings, which amounted to a net charge of $888 million in 1Q24 compared with a net charge of $125 million in 1Q23. The effective tax rate on net income (loss) attributed to shareholders was 22% in 1Q24 compared with 17% in 1Q23.

Net income attributed to shareholders in 1Q24 decreased $540 million compared with 1Q23, reflecting a net loss of $767 million from the reinsurance transaction with Global Atlantic ("GA Reinsurance Transaction"), primarily related to market experience from the sale of fair value through OCI ("FVOCI") debt instruments (there is an offsetting change in Other Comprehensive Income attributed to shareholders resulting in a neutral impact to book value), partially offset by core earnings growth. The net charge from 1Q24 market experience was also driven by lower-than-expected returns on alternative long duration assets ("ALDA") largely related to real estate, partially offset by higher-than-expected returns on public equity.

Core earnings increased $223 million or 16% on a constant exchange rate basis1 compared with 1Q23. The increase in core earnings compared with 1Q23 was driven by strong business growth across all insurance businesses, the impact of updates to actuarial methods and assumptions in the second half of 2023 and higher fee income in Global Wealth and Asset Management ("Global WAM") from higher average assets under management and administration2 ("average AUMA") and positive net flows2. The provision for expected credit loss ("ECL") was a modest net release in 1Q24 compared with a net charge in 1Q23, reflecting a benign credit experience. This was partially offset by modestly more adverse insurance experience, and higher workforce-related costs primarily reflecting strong TSR3 performance relative to peers and business performance. The net impact of the GA Reinsurance Transaction on core earnings was an $18 million charge in 1Q24 reflecting foregone earnings, primarily expected earnings on insurance contracts and expected investment earnings, partially offset by a release of ECL provisions on assets sold and higher expected investment earnings due to the timing of asset realignment.

1. Percentage growth / declines in core earnings, pre-tax core earnings, total expenses, core expenses, general expenses, contractual service margin ("CSM") net of non-controlling interests ("NCI"), new business contractual service margin ("new business CSM"), assets under management and administration ("AUMA"), assets under management ("AUM"), core earnings before income taxes, depreciation and amortization ("core EBITDA"), and Manulife Bank average net lending assets are stated on a constant exchange rate basis, a non-GAAP ratio. See "Non-GAAP and other financial measures" below for more information.
2. For more information on this metric, see "Non-GAAP and other financial measures" below.
3. Total Shareholder Return.

Core earnings by segment is presented in the table below.

The table below presents net income attributed to shareholders consisting of core earnings and items excluded from core earnings.

1. Market experience was a net charge of $779 million in 1Q24, primarily driven by net realized losses from debt instruments of which $568 million was related to the transfer of assets with respect to the GA Reinsurance Transaction, which are classified as fair value through other comprehensive income ("FVOCI"), lower- than-expected returns on ALDA mainly related to real estate, a charge from derivatives and hedge accounting ineffectiveness and a charge from unfavourable foreign exchange impacts. These were partially offset by a gain from higher-than-expected returns on public equity. Market experience was a net charge of $65 million in 1Q23 primarily driven by lower-than-expected returns on ALDA related to real estate and private equity, and net realized losses from the sale of debt instruments which are classified as FVOCI. These were partially offset by higher-than-expected returns on public equity, favourable foreign exchange impacts and a modest net gain from derivatives and hedge accounting ineffectiveness.
2. The 1Q24 net charge of $109 million mainly included a charge of $70 million resulting from the GA Reinsurance Transaction in the U.S and Japan, and a charge of $48 million related to U.S. withholding taxes on anticipated remittances associated with the reinsurance transaction discussed above. The 1Q23 net charge of $60 million mainly included a charge of $33 million related to legal settlements in U.S. and a charge of $28 million related to a jurisdictional adjustment to a deferred tax asset in Corporate and Other.

Net income attributed to shareholders by segment is presented in the following table.

Expense efficiency ratio

The expense efficiency ratio is a financial measure which we use to measure progress on our strategic priority of expense efficiency and reflects expenses that flow directly through core earnings ("core expenses"). Core expenses include core general expenses, directly attributable maintenance expenses and directly attributable acquisition expenses for products measured using the premium allocation approach ("PAA"). Core expenses exclude certain expenses directly attributable to acquiring new business that are capitalized into the CSM instead of flowing directly through core earnings.

The expense efficiency ratio was 45.1% in 1Q24, compared with 47.1% in 1Q23. The 2.0 percentage point improvement in the ratio compared with 1Q23 reflects a 15% increase in pre-tax core earnings1, and a 5% increase in core expenses. The increase in core expenses was driven by higher workforce-related costs, including long-term incentive compensation, reflecting strong TSR performance relative to peers, and performance related costs reflecting strong business performance.

Total 1Q24 general expenses increased 2% both on an actual exchange rate basis and on a constant exchange rate basis compared with 1Q23, driven by the items noted above related to the increase in core expenses and items outside of core earnings. General expenses excluded from core earnings were not material in 1Q24, and in 1Q23, consisted primarily of a true-up of an existing legal provision in 1Q23.

A2 Business performance

1. For more information on this metric, see "Non-GAAP and other financial measures" below.
2. New business CSM is net of NCI.
3. This item is a non-GAAP financial measure. See "Non-GAAP and other financial measures" below for more information.
4. See section A4 below for more information.

1 This is a non-GAAP financial measure. See "Non-GAAP and other financial measures" below for more information.