Manulife Financial sees 35% growth in insurance sales in Q1

Manulife Financial Corp. reported a $1.2 billion profit in the first quarter of 2012, up 22 percent from the same period in 2011 and an increase from the $69 million loss it reported in the fourth quarter of 2012.

Manulife said the quarter’s performance reflects strong markets, growth in insurance sales and strengthened underlying earnings compared to the fourth quarter of 2011.  The life insurer said strong growth in Canada and Asia helped propel profits. In Asia, record insurance sales were up 26 percent, driven by a 16 percent growth in contracted agents, and solid performances in Hong Kong and the ASEAN region, up 31 and 26 percent, respectively. In Canada, insurance sales were up 80 percent, driven by record sales in Group Benefits. In the U.S., insurance sales decreased three percent despite continued momentum in life insurance sales.  Manulife said lower sales in Long-Term Care reflected new business price increases in 2011 intended to decrease the company’s risk profile.

“We continue to see success across our diversified Canadian franchise,” said Paul Rooney, President and CEO, Manulife Canada. “We capitalized on increased activity in the group market with a record sales quarter for Group Benefits and the second highest sales quarter on record for Group Retirement Solutions. Once again we had record travel sales, and we are seeing the desired shift in the mix of our new business in Individual Insurance. Competitive conditions and the continuing low interest rate environment dampened the quarter’s sales results in our individual wealth management businesses relative to a strong first quarter of 2011. We continue to focus on enhancing our retail wealth business platform with 11 funds added to broker-dealers’ recommended lists in the quarter and the introduction of seven new fund mandates.”

President and Chief Executive Officer Donald Guloien stated, “We entered 2012 with a solid foundation for growth.  Our first quarter reflects strong markets, positive hedging results, 35 per cent higher insurance sales, and stronger underlying earnings relative to the fourth quarter of 2011. The strength of our underlying earnings reflects our healthier business mix, with the emphasis on wealth management and insurance products with less risk, higher margins and higher returns.”

“The first quarter was not without its challenges, as we experienced poor policyholder experience, which we expect is largely a random fluctuation and mutual fund sales slightly lower than last year,” Guloien said. “That being said, we reported record funds under management of $512 billion, which fuels current and future fee revenue.”

Guloien added, “Our record insurance sales in Asia demonstrate that, among other things, our investments in our brand and distribution are paying off. In Canada, our broad-based, diversified financial services strategy has resulted in strong insurance sales led by record sales in our Group Benefits business.”

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