Manulife Financial (0945) reported higher second-quarter profit on Wednesday, driven by strong performance in its Asia and US segments.
- The insurer reported core earnings of C$1.92 billion (HK$10.74 billion) or C$1.09 per share in the three months ended June 30, compared with C$1.73 billion, or 95 Canadian cents per share, in the year earlier.
- Analysts were expecting core earnings of C$1.08 per share, according to LSEG data.
- Manulife has spent the past decade shifting its growth focus toward Asia, betting on rising wealth, ageing populations and growing demand for insurance and retirement products. Asian markets have become important contributors to earnings, with Manulife targeting half of its core earnings from the region by 2027.
- Core earnings from Manulife's Asia business climbed 21 percent to US$616 million in the quarter compared with the year-ago period. In the US, core earnings rose 55 percent, helped by fewer claims in both life and long-term care policies.
- The company's wealth and asset management business also contributed, as core earnings jumped 9 percent boosted by higher fee income. In Canada, however, core earnings fell by 10 percent, hurt by higher expenses in group insurance.
- Separately, Manulife announced a C$3.2 billion reinsurance deal with Munich Re that will allow the insurer to transfer risk associated with a block of long-term care policies.
- CEO Phil Witherington noted that this was the third long-term care reinsurance transaction in less than three years and the first involving a standalone long-term care portfolio. The deal reflects the insurer's ability to reduce its risk profile, he said.
- "With this deal, we will reinsure 80 percent of the biometric risk on a standalone LTC block, with no asset transfer, retaining a future earnings stream that will generate capital as the portfolio matures," he said.
Reuters
