Nichola Sainather

TORONTO, (Reuters) – Manulife Financial Corp (NYSE:) Corp views the expected rise in inflation and interest rates this year as positive and can compensate for the latter through rising premiums. Executives spoke to a post-earnings call Thursday.

Chief Executive Roy Gori said that an increase of fixed income yields by 50basis points would result in an embedded value rise of C$1.85billion.

Manulife had previously reported fourth quarter core earnings of 84 Canadiancs per share. That’s 13.5% higher than the year before and in comparison to analysts’ expectations for 82 Canadiancs.

Manulife’s rivals Sun Life Financial, (NYSE:), and Great-West Life also reported higher earnings on Wednesday.

Manulife shares surged 3.4% to C$27.81, the highest intraday trading level since 2008. Sun Life’s U.S. earnings fell 51% due to a rising in COVID-related deaths claims. Great-West shares dropped 1.3%

Main Toronto index fell 1.6%

Gori stated that there are both positives and negatives to higher inflation. He said higher expenses and costs mean higher costs. There are certain aspects in our business that higher rates could cause problems, but there is flexibility when it comes down to driving scale through price adjustments or expense increases to counter those.

Although the company may increase its rates, particularly in long-term care, it could be vulnerable to higher costs. However, a shift in care from facilities to home has helped offset some of this, said Chief Actuary Steve Finch.