Large insurers see earnings declines
Asia, COVID challenges weigh on Manulife, Sun Life
Canada's biggest life insurers, Manulife Financial and Sun Life Financial, reported core earnings fell from a year ago as the COVID-19 pandemic took a toll on their Asian earnings, with Manulife also missing estimates.
Manulife reported core earnings of $1.5 billion, or 77 cents a share, in the three months ended March 31, down from $1.6 billion, or 82 cents a share, a year earlier. Analysts had expected earnings to remain flat.
Underlying profit at Sun Life was $843 million, or $1.44 a share, in the three months ended March 31, down from $850 million, or $1.45, a year earlier. Analysts had expected $1.41 a share.
Manulife attributed the decline in its profit to "the rapid and unprecedented resurgence of COVID-19 (that) disrupted new business activities in multiple markets in Asia." Profit from the region fell 5.8 per cent, offsetting 20 per cent growth at home.
A 31 per cent decline in Sun Life's U.S. earnings, due to higher health and death claims, and a four per cent decrease in Asia, driven by lower sales in Hong Kong driven by COVID-19 restrictions, were behind the drop in Sun Life's profit.
Sun Life has paid more than $1 billion in Covid-related claims, chief financial officer Kevin Strain said at the company's annual shareholder meeting on Wednesday.
Despite recent volatility in markets, both companies reported higher profits from their wealth and asset management units. Sun Life's rose 12 per cent from a year ago, while Manulife's increased nearly four per cent. Both saw growth in assets under management.