Sun Life Financial and Manulife Financial, two of the largest insurance companies in Canada, have reported earnings for the second quarter of the year that have exceeded market forecasts, partly due to strong growth in Asian markets.
The two insurers have undertaken rapid expansion efforts in Asia, where the client base is growing thanks to a growing middle-class. This helps the insurers to diversify and provide an alternative source of income to their domestic markets where competition is intense.
Manulife reported core earnings of US$922 million for the second quarter, compared to US$655 million for the same period in the previous year, a 40.76% year-on-year increase and 3% higher than initial forecasts.
According to Manulife, strong new business growth in Asia, higher fee income from its wealth and asset management businesses, and a reduction in hedging costs were behind the improved performance.
Meanwhile, Sun Life reported net income of US$452 million for the quarter, up from US$377.3 million, a 19.6% year-on-year improvement and 15.4% higher than market estimates.
For Asia, Sun Life’s net income for the quarter was US$60.5 million, 13.23% higher than last year’s figure.
“Asia has been growing rapidly,” Sun Life president and CEO Dean Connor told Reuters. “Earnings have essentially tripled over the past five years and we expect to see continued strong growth in Asia.”
He said the company's operations in Hong Kong, the Philippines, Malaysia and India have all performed strongly.
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