Manulife Financial said that its core earnings for Q1 2020 came down from CAD1.54bn ($1.09bn) reported in Q1 2019 to CAD1.02bn ($720m)
Head office of Manulife Financial in Toronto. (Credit: Skeezix1000/Wikipedia.org)
Manulife Financial has reported a net income attributed to shareholders of CAD1.29bn ($920m) or CAD0.64 ($0.45) per share for the first quarter of 2020 (Q1 2020), compared to CAD2.17bn ($1.54bn) net income or CAD1.08 ($0.77) per share, made in the same quarter in 2019.
The decline in net income in Q1 2020 compared with Q1 2019 was due to a decrease by CAD500m in core earnings and charges from investment-related experience and the direct effect of equity markets and variable annuity guarantee liabilities. These were offset partially by gains from the direct effect of interest rates due to widening corporate spreads, said the Canadian insurance company.
Manulife Financial’s core earnings for Q1 2020 came down from CAD1.54bn reported in Q1 2019 to CAD1.02bn.
The lower core earnings were due to the unfavourable effect of markets on seed money investments in new segregated funds and mutual funds, the lack of core investment gains in the quarter, and reduced new business volumes in Japan. Also, the insurer was hit by unfavourable Q120 policyholder experience in North America, which included travel claims associated with COVID-19.
Manulife Financial said that its new business value (NBV) in Q1 2020 came down 11% to CAD469m compared with the year-before quarter.
Its sales of annualised premium equivalent (APE) dropped 9% to CAD1.6bn in the reported quarter, compared to Q1 2019.
The Canadian insurance firm said that net inflows of its global wealth and asset management business were CAD3.2bn in Q1 2020, compared with net outflows of CAD1.3bn in the prior-year quarter.
Manulife CEO comments on Q1 2020 results
Manulife president and CEO Roy Gori said: “The COVID-19 pandemic continues to disrupt economies and capital markets worldwide, and our operating conditions during the first quarter were understandably affected. Considering these challenging conditions, we delivered solid results, demonstrating the diversity and resilience of our businesses.
“In recent years, we’ve taken significant actions to strengthen our capital ratios, reduce our leverage, reduce risk in our legacy businesses, and tightly manage our expense base. As a result, I’m confident that Manulife is well positioned to navigate this crisis and achieve ongoing success in the long-term.”