Manulife Financial has reported net income attributed to shareholders of $0.7 billion in 3Q19, down $0.9 billion from 3Q18.
The decrease was primarily driven by investment-related experience charges compared with gains in 3Q18, as well as a $0.5 billion charge related to updated Ultimate Reinvestment Rate ("URR") assumptions issued by the Canadian Actuarial Standards Board.
"We delivered solid core earnings in line with a very strong prior year quarter, driven by double-digit growth in Asia," said Manulife president and CEO Roy Gori. “We continued to execute against our strategic priorities, with portfolio optimization initiatives announced to date resulting in a cumulative capital benefit of $3.9 billion. We also expanded Manulife's distribution capabilities across our global footprint, entering into long-term partnerships in mainland China and Vietnam.”
Insurance business increases 14%
The company’s insurance businesses delivered 14% growth in new business value, while the retail and retirement business lines of its Global Wealth and Asset Management business achieved net inflows of almost $3 billion. Institutional net outflows reflected the decision by one client to internalize the management of several large, primarily fixed-income mandates."
Reinsurance agreements provide capital benefit
The company made progress on its portfolio optimization strategic priority, renegotiating reinsurance agreements on a universal life block in Canada that resulted in a capital benefit of about $120 million. In its long-term care (LTC) business, it made progress in securing premium rate increases, and introduced co-pay options to its LTC customers to manage higher rates.
In Asia, Manulife entered into a long-term strategic partnership with HaoDf.com, a leading online medical platform in mainland China, as well as a new bancassurance relationship in Vietnam with Asia Commercial Bank.