Manulife announced on May 2 net income of $1,372 million for the first quarter of 2018 and return on common shareholders' equity of 14.1 per cent. This compares to $1,350 million, and 13.7 per cent for the same quarter last year.

"We delivered strong core earnings and net income in the first quarter, and continue to make significant strides in transforming our business to be more customer centric,” said President & Chief Executive Officer Roy Gori. “We are encouraged by the early progress we have made to date. For example, the numerous initiatives we have completed in Canada have led to strong, double-digit improvements in net promoter scores in just six months. We also took several strategically important actions on our North American legacy businesses which address both profitability and capital, and demonstrate clearly that we are executing on our priorities."

Phil Witherington, Chief Financial Officer, noted that this marks the company’s first quarter under the new Life Insurance Capital Adequacy Test or LICAT framework. “We are pleased to report a healthy capital position and a LICAT capital ratio of 129 per cent for our operating company. This factors in only some of the expected four percentage point benefit from reducing the allocation to ALDA (alternative long-duration assets) in the portfolio asset mix backing some of our North American legacy businesses."

Canada business highlights

Among highlights for its Canadian business in the first quarter, Manulife entered into a reinsurance transaction on its legacy business to reduce risk and free up $240 million of capital, says the company. Its group insurance long-term disability results improved over the first quarter of 2017 due to claims experience and repricing.

Annualized premium equivalent (APE) sales in Canada were $290 million in the first quarter of 2018, a decrease of $85 million or 23 per cent compared with the same quarter last year. “The decline was primarily attributed to the 1Q17 large-case sale in group benefits and elevated 1Q17 individual insurance sales due to tax-exempt changes,” says Manulife.

Net income of $459 million

For the Canadian business, net income attributed to shareholders was $459 million in the first quarter compared with $128 million for the same period a year earlier. Net income is comprised of core earnings, which were $290 million in the first quarter compared with $255 million in the first quarter of 2017, and items excluded from core earnings, which were a net gain of $169 million in the first quarter compared with a net charge of $127 million in 1Q17, says the company.