Manulife beats expectations, posts strong sales growth

The Canadian business boosted its profits last quarter on the back of rising sales and lower-than-expected benefit use, cushioning the toll that continued Covid restrictions are taking on its Asian operations.

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In Canada, Core earnings rose 8.5% from a year ago to C $345 million $270 million in the second quarter, the Toronto-based company said Wednesday. The second quarter profit was higher than analysts estimates.

Chief Executive Officer Roy Gori said that Manulife's home country of Canada remains a strong growth market for the company, and it continues to invest in as the penetration of insurance products is still relatively low. The country's economy has remained resilient through the turbulence of this year, he said.

Canada has low unemployment and has benefitted from the commodities boom, which puts Canada in a unique and strong position to help manage what will be a challenging macroeconomic environment, Gori said in an interview.

The premium equivalent sales in Canada rose 32% from a year ago, the company said. The policy use in the group benefits business was less than the company had expected, which helped boost core earnings in the operation, said Gori, head of the group benefits business.

Manulife's core earnings in Asia fell 2.5% last quarter, hurting by lower sales in Hong Kong and the Japanese corporate-owned life market. Gori believes that the remaining restrictions in Manulife's Asian markets will be temporary and that the company will resume positive sales momentum in the coming quarters.

Manulife shares have gone up 0.3% this year, compared to a 6.3% drop for the S&P TSX Composite Index.

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