Manulife quarterly profit slumps, Asia new business value drops by 21pc

Insurer Manuflife reported that second quarter net income slumped to 700 million Canadian dollars down by C$700 million from the year before.

Core earnings came in at C$1.6 billion, up by 5 percent on-year.

Core earnings refer to, core return on common shareholders’ equity, new business value, annualized premium equivalent sales, net flows and expense efficiency ratio are non-GAAP measures, the insurer explained.

Total new business value in the quarter fell to C$384 million, from C$479. 

In Asia, new business value fell by 21 percent to C$298 million, due to a decrease in annualized premium equivalent sales in Hong Kong, Japan and elsewhere in Asia, and a decline in interest rates in Hong Kong, partially offset by a more favorable business mix in Asia.

In Asia, the insurer said it expanded distribution capabilities, with about 97 percent of our product shelf now accessible to customers through non-face-to-face solutions.

Net income includes core earnings, as well as charges from investment-related experience and the direct impact of interest rates, driven by the narrowing corporate spreads and the steepening of the yield curve in the U.S., Manulife said. This is partially offset by gains from the sale of available-for-sale bonds held in corporate and other, and gains from the direct impact of equity markets and variable annuity guarantee liabilities from a global equity market rebound.

Chief executive Phil Witherington expects the company is to achieve the target of C$1 billion of expense efficiencies by the end of 2020, two years ahead of schedule.