Manulife posts solid earnings for Q2 2022 despite market headwinds

President and CEO comments on "strong and resilient" business model

Manulife posts solid earnings for Q2 2022 despite market headwinds

Life & Health

By Lyle Adriano

Manulife has posted its results for the second quarter of 2022, revealing that while the pandemic continues to impact earnings, it has managed to remain resilient.

The company posted net income attributed to shareholders of $1.1 billion in Q2 2022, which is a drop from $1.6 billion in Q2 2021. Manulife also posted a LICAT ratio of 137% for the quarter. The insurer’s annualized premium equivalent sales for the quarter stood at $1.4 billion; a 1% drop from the prior year's quarter.

"We delivered solid results, including core earnings of $1.6 billion, despite challenges posed by the macro environment, including the impact of market headwinds in Global WAM (wealth asset management) and extended COVID-19 restrictions in Asia," said Manulife president and CEO Roy Gori.

Gori also noted that Manulife’s franchise during the quarter was “strong and resilient,” as evidenced by its double-digit new business value (NBV) growth of $511 million in the US and Canada on a combined basis. This, the chief executive explained, helped reduce the impact of market and pandemic-related headwinds elsewhere in the business.

While Manulife’s Q2 2022 NBV growth did enjoy a double-digit increase, the growth was 9% lower than that of Q2 2021.

Although Manulife’s net income for Q2 2022 was negatively impacted by market volatilities, on a year-to-date basis, the company delivered net income attributed to shareholders of $4.1 billion, said Gori, which was $0.6 billion higher than Manulife’s year-to-date 2021 net income and $0.9 billion higher than its year-to-date core earnings.

“The 2022 results are reflective of positive investment-related experience that more than offset the negative direct impact of markets, as well as the one-time gain from our US variable annuity reinsurance transaction that closed in the first quarter,” said Gori.

Manulife also reported that it maintained an expense efficiency ratio of 49.2%, which Manulife's chief financial officer Phil Witherington highlighted was despite topline pressures during the quarter.

“This, combined with our in-force business, which grew 7% over the prior-year quarter, and comprises approximately three-quarters of our insurance core earnings, has provided for earnings stability against a backdrop of an uncertain macro environment," said Witherington.

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