Manulife reports net income of $1.3 billion for second quarterpar The IJ Staff | August 09 2018 01:30PM
Manulife announced on Aug. 8 net income attributed to shareholders of $1,262 million for the second quarter of 2018. This compares with $1,255 million for the second quarter of 2017.
Return on common shareholders' equity (ROE) stood at 12.3 per cent for the second quarter of 2018, compared with 12.4 per cent for the same quarter last year.
For the second quarter of 2018, Manulife generated core earnings of $1,431 million, compared with $1,174 million for the same quarter of 2017.
Double-digit core earnings growth
"We delivered strong earnings in the second quarter, with double-digit core earnings growth across all our operating segments and solid net income, as we continued to execute on our five priorities and the bold ambition we set out at our recent Investor Day," said President & Chief Executive Officer Roy Gori.
"During the quarter we made additional progress improving the capital efficiency of our legacy businesses and freed up $400 million in capital," added Gori. "We also expanded our distribution reach in Asia by signing a new exclusive bancassurance agreement in Cambodia, and in Canada we became the first life insurer to underwrite using artificial intelligence, which improves efficiency and shortens customer response times."
Phil Witherington, Chief Financial Officer, said, "We remain focused on managing costs across the organization and generated a three percentage point improvement in our efficiency ratio year-over-year. In 2Q18, we also made a number of strategic decisions which will enable $300 million of annual pre-tax run rate savings to be achieved by the end of 2019, and resulted in a pre-tax restructuring charge of $250 million in the quarter."
Insurance sales decline
In Asia, annualized premium equivalent (APE) sales increased 2 per cent from 2Q17 “as double-digit growth in Hong Kong and Asia Other (excludes Japan and Hong Kong) was mostly offset by competitive pressures in Japan,” reported the company. “In Canada, APE sales declined 62 per cent from 2Q17 primarily reflecting a prior year large-case group insurance sale. In the U.S., APE sales decreased by 20 per cent from 2Q17 due to lower international sales following price increases in the third quarter of 2017 to improve margins,” says Manulife.
Manulife reported a LICAT ratio of 132 per cent as at June 30, 2018. This is a three percentage point increase in the ratio compared with March 31, 2018.