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Manulife Financial Q3 Earnings Up Y/Y on Higher Revenues

Manulife Financial Corp.MFC reported third-quarter 2015 core earnings of $665.3 million (C$870 million), up 15.2% year over year. The improvement was driven by double-digit growth in insurance sales and positive net flows in wealth and asset management business.

The company reported operating revenue of $8.5 billion (C$11.4 billion), up 21.1% year over year.

Net premium income was $4.7 billion (C$6.2 billion), up 34.7% year over year.

Investment income increased 4.1% year over year to $2.0 billion (C$2.7 billion).

During the quarter, Manulife's total insurance sales were $614.1 million (C$803 million), up 12% year over year, led by higher sales in Asia.

Segment Performance

Asia division core earnings came in at $272 million, up 8.4% year over year. This increase was driven by strong growth in new business volumes, improvement in product margins, a favorable product mix and more favorable policyholder experience, partially offset by expenses related to growth initiatives. Premiums and deposits were $4.6 billion, up 5.8% year over year.

Manulife's Canadian division 's core earnings of $258.5 million (C$338 million) increased 39% year over year. Premiums and deposits in the quarter were $5.6 billion (C$7.3 billion), up 43.6% year over year. The increase was driven by in-force business growth including higher fee income from wealth management business.

The U.S. division reported core earnings of $300 million, down 4.5% year over year. Premiums and deposits were $14.9 billion, up 43.3% year over year. The increase was backed by record deposits in John Hancock (JH) Investments, and strong mid-market deposits in JH RPS, driven by the second-quarter 2015 acquisition.

Manulife Minimum Continuing Capital and Surplus Requirements ratio was 226% as of Sep 30, 2015, down from 248% as of Dec 31, 2014.

Manulife's financial leverage ratio improved to 22.7% on Sep 30, 2015 from 26.2% as at Jun 30, 2015.

Asset under management was $662.5 billion (C$888 billion), up 34% year over year.

Return on equity, which measures the company's profitability, decreased 90 basis points year over year to 9.2%.

The company also announced a 15-year agreement with Standard Chartered. Per the agreement, Manulife will have the exclusive right to offer its Mandatory Provident Fundroducts to Standard Chartered's customers in Hong Kong.

Manulife Financial presently carries a Zacks Rank #3 (Hold).

Performance of Other Insurance Stocks

Some other life insurers like Reinsurance Group of America Inc. RGA , MetLife Inc. MET and Lincoln National Corporation LNC missed third-quarter Zacks Consensus Estimate for earnings by 15.6%, 57.8% and 27%, respectively.

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METLIFE INC (MET): Free Stock Analysis Report

LINCOLN NATL-IN (LNC): Free Stock Analysis Report

MANULIFE FINL (MFC): Free Stock Analysis Report

REINSURANCE GRP (RGA): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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