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Manulife reports first quarter net income of $2.2 billion

By The IJ Staff | May 02 2019 11:30AM

Roy Gori

Manulife announced, on May 1, net income of $2.2 billion for the first quarter of 2019, an increase of $0.8 billion compared to the first quarter of 2018.

Manulife says its net income increase in Q1 “was driven by higher gains from investment-related experience and from the direct impact of markets, and core earnings growth.”

Return on common shareholder’s equity was 20.1% in Q1 2019, up from 14.1% for the same period a year earlier.

Core earnings of $1.5 billion

The company’s core earnings stood at $1.5 billion in Q1 2019, up 15% from the first quarter of 2018. Core return on equity was 14.2% in Q1 2019 compared with 13.4% in Q2 2018.

In terms of financial strength, the company reported a LICAT ratio of 144%.

"We delivered another quarter of strong core earnings and net income, both of which achieved solid double-digit growth over last year," said Roy Gori, Manulife President & Chief Executive Officer. "New business value grew 31% with double-digit increases across all of our operating segments. And while net flows were negative, they improved significantly from the prior quarter."

Phil Witherington, Chief Financial Officer, added, "We continued to optimize our portfolio during the quarter, which included the cumulative release of over $2 billion of capital from the sale of alternative long-duration assets, exceeding our target."

New business value

Manulife reported achieved new business value (NBV) of $519 million in the first quarter of 2019. “In Asia, NBV increased 23% to $411 million driven by higher sales, partially offset by a less favourable business mix. In Canada, NBV increased 27% to $62 million driven by the new Manulife Par product,” stated the company, adding that in the U.S., “NBV more than quadrupled to $46 million, primarily due to actions to improve margins and a more favourable product mix.”

The company’s reported annualized premium equivalent (APE) sales were $1.7 billion in the first quarter, an increase of 23% over Q1 2018 with particularly strong growth in Asia.

In Canada, however, APE sales were down 10% “due to lower large-case group insurance sales, partially offset by the continued success of our Manulife Par product.”

Wealth management

The company reported negative Global Wealth and Asset Management net flows of $1.3 billion in 1Q19, compared with positive net flows of $10.0 billion in 1Q18.

For Canada, net flows were $2.1 billion in the first quarter of 2019, down $1.4 billion from the same quarter last year.

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