Manulife has declined for the second consecutive quarter.
The insurer reported net income attributable to shareholders of $1.3 billion in the third quarter of 2022, compared with $1.6 billion in Q3 of 2021.
This decrease of 15.4 per cent or $245 million was “primarily driven by lower gains from investment-related experience and lower core earnings, partially offset by a smaller charge from the direct impact of markets,” says the insurer.
Manulife attributes the 12.8 per cent or $195 million decrease in core earnings to several factors, including a $256 million charge in its property and casualty reinsurance business “for estimated losses related to Hurricane Ian,” compared with a $152 million charge in Q3 2021 “for estimated losses related to Hurricane Ida and the European floods.”
In addition, investment-related experience plummeted by 82.1 per cent or $575 million to $125 million in Q3 2022 from $700 million in Q3 2021.
Four segments decline
Four of Manulife’s five segments declined in the third quarter of 2022:
- Corporate and Other sustained a net loss of $738 million, a $486 million decrease from Q3 2021;
- Asia reported net income of $521 million for the segment, down 36.6 per cent or $301 million;
- United States had net income of $641 million, down 8 per cent or $56 million;
- Global Wealth and Asset Management had total net income of $345 million, down 1.7 per cent or $6 million.
Canada was the only segment that advanced.
Net income in Canada was $578 million in the third quarter of 2022, compared with a net loss of $26 million in Q3 2021. This increase of $604 million is driven by two factors:
First, core earnings were $350 million in the third quarter of 2022, versus $311 million in Q3 2021. This increase of 12.5 per cent or $39 million primarily reflects “more favourable experience gains in Group Insurance, higher in-force earnings, higher Manulife Bank earnings and several smaller favourable items, partially offset by unfavourable claims experience in Individual Insurance,” the insurer says.
What’s more, items excluded from core earnings resulted in a net gain of $228 million in Q3 2022, compared with a net charge of $337 million in Q3 2021. This represents an improvement of $565 million.
Premiums and deposits
Manulife’s insurance premiums and deposits were $12.6 billion in the third quarter of 2022, versus $13.9 billion in Q3 2021. The decline amounts to 9.6 per cent or $1.3 billion.
Insurance premiums and deposits decreased 16.4 per cent or $1.2 billion in Asia to $6.3 billion.
In Canada, insurance premiums and deposits edged downward 3.6 per cent or $157 million to $4.2 billion.
Looking at the results in Canada in closer detail:
- Annuities: Premiums and deposits decreased 42.4 per cent or $368 million in the third quarter of 2022 to $499 million;
- Group Insurance: Premiums and deposits climbed 4.6 per cent or $114 million in the third quarter of 2022 to $2.6 billion;
- Individual Insurance: Premiums and deposits increased 9.5 per cent or $97 million in the third quarter of 2022, to $1.1 billion.
In contrast, insurance premiums and deposits in the U.S. were up 2.7 per cent or $55 million, to $2.1 billion.