Manulife's core earnings hit a record as net income falls

Manulife, a Toronto insurer, said in its November 4 release that third-quarter core earnings hit a record $2.1 billion, yet net income fell $0.4 billion to $1.4 billion. Core earnings is the measure Manulife led with; net income is the reported profit.

Manulife blamed the fall on a net charge on market experience, the gap between actual and expected investment returns, and a net charge from its Vietnam operations. It said the market charge came from lower-than-expected returns on alternative long-duration assets, mainly private equity, real estate and farmland. For comparison, Sun Life Financial, another Toronto insurer, reported third-quarter net income of $785 million, down 29% from a year earlier, while its underlying net income rose 9%.

LICAT is the capital test for life insurers; OSFI, the federal financial regulator, sets a supervisory target of 100% for the Total ratio. CFO Colin Simpson said Manulife returned $1.3 billion to shareholders in the quarter, with a LICAT capital ratio of 136%.

Sources: Manulife (via PR Newswire) · Manulife Careers · Sun Life Financial · Office of the Superintendent of Financial