TORONTO, (Reuters) – Senior executives from Canada’s largest life insurers stated on Thursday that more COVID-19 uncertainties were likely in Asia’s fastest-growing market. The resurgence and lockdowns in Asia have weighed on the company’s quarterly earnings.
Manulife Financial Corp (NYSE:) Inc and Sun Life Financial Inc (NYSE:) Inc both have targeted expansion in this region. It has been their growth motor in past quarters. Waves of COVID-19, which have affected different countries at various times, and multiple lockdowns have led to increased claims that have negatively impacted business growth.
On Thursday, Anil Wadhwani (chief executive of Manulife Asia’s Asian business) stated that “what we have seen in Asia is the resurgence COVID” and that containment measures have had an effect on volume. “We do not believe the recovery will happen immediately.”
Manulife’s Asia core profit fell nearly 5% because of pandemic-related problems in Indonesia, Vietnam and the Philippines. But, asset management improvements and Canada earnings drove a 4.5% increase to companywide profits.
Sun Life, a smaller rival, paid almost C$87million ($70 million), in total COVID-19 claims this quarter. This brings the total payments related to COVID-19 since the pandemic to around C$700 million. Sun Life Chief Executive Kevin Strain stated to Reuters.
Sun Life saw a decrease of 12% in earnings in Asia due to death claims from COVID-19 related deaths in India, Indonesia and the Philippines in the third quarter compared to the previous year.
Strain explained that U.S. businesses also suffered from pandemic pressures. Three months to September saw the highest death claims from COVID-19 in the working-age population.
Due to strong asset management, overall underwriting profit rose 7%. Additionally, the company increased its medium-term rate of return on equity to more than 16%. This is an increase from its current 12-14%.
Strain stated in an interview that it was difficult to predict if there will be new strains of the virus. “In Asia, you see higher vaccination rates. While this should improve claims, I do not believe we have yet escaped COVID.
Sun Life shares declined 0.8% at C$70.80 on Toronto morning trading. Manulife shares declined 2.6%, to C$24.36. Toronto Stock Benchmark increased 0.5%
($1 = 1.2431 Canadian dollars)
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