Manulife takes loss, Great-West profit jumps

Thu Feb 9, 2012 5:18pm EST
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By Cameron French

TORONTO (Reuters) - Weaker insurance sales and a big writedown at its U.S. operation dropped Manulife Financial (MFC.TO: Quote) to a loss, and rival Great-West Lifeco (GWO.TO: Quote) posted a sharp jump in profit as Canadian insurers began reporting quarterly financial results on Thursday.

Manulife, Canada's top insurer, also said its 2015 C$4 billion profit objective was at risk, and announced that its chief financial officer, Michael Bell, would step down once it could find his replacement.

The company lost C$69 million ($69 million), or 5 Canadian cents a share in the fourth quarter ended December 31, compared with a year-earlier profit of C$1.8 billion, or C$1.00.

Analysts had expected a loss of 11 Canadian cents a share.

Peter Routledge, an analyst at National Bank Financial, called it an "in line" result, but said core insurance earnings were actually a bit on the low side.

"They had some investment-related gains related to non-fixed income investments and oil and gas properties, so that bolstered earnings," he said.

The company took a C$665 million noncash writedown on its U.S.-based John Hancock insurance unit to reflect the current and expected low interest rate environment.

Insurance sales fell to C$640 million from C$702 million, reflecting a sharp drop in sales of products the company is winding down. Sales of wealth products fell to C$8.2 billion from C$9.2 billion.   Continued...