Manulife posts record net income of $4.8 billion for 2018

By The IJ Staff | Feb. 14, 2019, 1:30 p.m.

Manulife announced on Feb. 13 record-breaking net income of $4.8 billion for 2018 and core earnings of $5.6 billion. This compares to $2.1 billion in net income and $4.6 billion in core earnings reported in 2017.

For the fourth quarter of 2018, Manulife’s net income was $593 million, up from the $1.6 billion loss recorded in Q4 2017. Core earnings for Q4 2018 stood at $1.3 billion, compared to $1.2 billion for Q4 2017.

Manulife says the increase in earnings during 2018, compared with the year before, is partly explained by the non-recurrence of the $2.8 billion charge in 2017 related to the impact of U.S. Tax Reform. In 2017, Manulife also had hurricane-related charges in its Property and Casualty Reinsurance business.

The company’s return on common shareholders’ equity was 5.3% for the fourth quarter of 2018 and 11.6% for the full year.

With respect to financial strength, Manulife’s LICAT ratio was 143%.

Double-digit earnings growth

"We delivered the highest core earnings and net income in our Company's history in 2018. Core earnings increased 23% to $5.6 billion, with double-digit core earnings growth across all operating segments," stated Roy Gori, Manulife President & Chief Executive Officer. "We continued to execute against our five priorities and ambition to become the most digital and customer-centric global company in our industry and launched a number of initiatives to streamline our businesses and enhance the customer experience," he added.

Phil Witherington, Chief Financial Officer, said that in Asia, the company achieved a 19% increase in new business value to US$1.1 billion in 2018. “And, while net flows were negatively impacted by significant market volatility in the fourth quarter, we generated net inflows of $1.6 billion in 2018, our 9^th consecutive year of positive net flows." He added that Manulife also made significant progress improving the capital efficiency of its legacy businesses in 2018. “Once our announced initiatives are fully executed, we will have released $3.7 billion in capital, representing almost three-quarters of our 2022 target," added Witherington.