CEO says Man­ulife ‘not bank­ing’ on rate hike

Saskatoon StarPhoenix - - FP SASKATOON - BAR­BARA SHECTER Fi­nan­cial Post

TORONTO Re­cent in­ter­est rate hikes in North Amer­ica are per­ceived as pos­i­tive for the life in­sur­ance sec­tor, but they aren’t prompt­ing a change in strat­egy at Man­ulife Fi­nan­cial Inc., ac­cord­ing to Roy Gori, the new chief ex­ec­u­tive at Canada’s largest in­surer.

“We ob­vi­ously ben­e­fit from a more pos­i­tive out­look as it re­lates to in­ter­est rates, but we’re not bank­ing on that,” Gori, who took over as CEO from Don Gu­loien in Oc­to­ber, told the Fi­nan­cial Post on Thurs­day.

“There’s still a lot of un­cer­tainty in terms of global growth and in­fla­tion and, as a re­sult, in­ter­est rates are still sig­nif­i­cantly low, cer­tainly lower than they have been his­tor­i­cally. And we’re work­ing on the as­sump­tion that that will con­tinue.”

In Septem­ber, the U.S. Fed­eral Re­serve sig­nalled plans to raise short-term in­ter­est rates one more time this year.

The Bank of Canada left rates un­changed last month after two in­creases to the overnight rate this year.

Man­ulife turned in bet­terthan-ex­pected re­sults for the third quar­ter, which was re­ported late Wed­nes­day.

De­spite a bru­tal hur­ri­cane sea­son, the in­surer re­ported core earn­ings of 53 cents per share, ahead of an­a­lyst es­ti­mates of 50 cents, ac­cord­ing to John Aiken, an an­a­lyst at Bar­clays Cap­i­tal.

In a note to clients, he said Man­ulife was also able to ad­dress con­cerns that growth in the key mar­ket of Asia had paused. “Asia had a solid quar­ter, with core earn­ings up 11 per cent from a year ago,” Aiken wrote. “This was cou­pled with strong se­quen­tial growth in in­sur­ance and wealth man­age­ment prod­ucts in ad­di­tion to a healthy in­crease in the value of new busi­ness.”

Gori’s rapid as­cent in Man­ulife be­gan in Asia in 2015. He was hired to run the op­er­a­tions in China, Hong Kong, In­done­sia, Ja­pan, Ma­cau, Malaysia, the Philip­pines, Sin­ga­pore, Tai­wan, Thai­land, Vietnam and Cam­bo­dia.

Be­fore join­ing the Cana­dian firm, he worked in con­sumer and re­tail bank­ing at Cit­i­group.

Gori noted that Man­ulife added to a grow­ing list of bank part­ner­ships in the third quar­ter with a new ar­range­ment in Asia. A three-year part­ner­ship with Mekong Hous­ing Bank in Vietnam will al­low Man­ulife Vietnam to sell life in­sur­ance to Mekong Hous­ing Bank’s clients in Ho Chi Minh City and Hanoi.

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