Manulife Posts Robust Q1 Results On Strong Performances In Asia and the U.S.
Manulife (NYSE:MFC) reported robust earnings for the first quarter on the back of continued strong performance in Asia and the U.S., partially offset by lower investment income. The company reported net investment income of $3.9 billion in the last quarter compared to $12.1 billion in Q1 2016, driving down total revenue by 38% year-over-year (y-o-y) to about $13.6 billion. However, net income for the company grew 29% to $1.35 billion, or 66 cents per share, in the three-month period ending March 2017 compared to 51 cents in the prior year quarter driven by significantly lower expenses related to change in insurance contract liabilities.
Asia Operations Drive Earnings Growth
Asia operations continue to drive earnings growth for Manulife. In the first quarter, the company reported core earnings growth of 14% y-o-y to $308 million for its Asia operations driven by strong double-digit growth in new business volumes, continued growth of in-force business, and a more favorable product mix.
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There was double-digit growth in all Asian markets, including Japan and Hong Kong, which had been facing headwinds in the prior quarters.
U.S. Operations Show Strong Results
Operating under the John Hancock brand in the U.S., Manulife holds 2.85% of the life insurance market in the country in terms of premiums earned. [1] In the first quarter, Manulife’s core earnings in the region increased 37% y-o-y to U.S. $389 million, driven by long-term care and annuity policyholder experience gains in the first quarter this year compared with life and long-term care policyholder experience losses in Q1 2016, higher fee income from higher average assets in the company’s wealth and asset management businesses, and lower amortization of deferred acquisition costs on the in-force variable annuity business.
JH Life sales increased 8% to U.S. $113 million driven by strong growth in international, term and protection universal life sales. Overall, the company’s gross flows increased 13% y-o-y in the first quarter driven by strong intermediary sales and higher model allocations.
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