WRAPUP 1-Manulife, Great-West profits meet expectations, shares up

Thu May 2, 2013 1:53pm EDT
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* Manulife profit drops 56 pct, hit by markets

* Great-West profit up 15 pct, shifts management

By Cameron French

TORONTO, May 2 (Reuters) - Canada's top life insurer, Manulife Financial Corp, reported a 56 percent drop in profit in the first quarter, while earnings at rival Great-West Lifeco Inc rose 15 percent as both companies met expectations in a tough market.

Shares of the two insurers were higher in midday trade on Thursday as investors took the results in stride, accustomed to wild swings in Canadian insurers' results over the past five years as volatile stock and bond markets have roiled asset values.

Toronto-based Manulife cited weaker life insurance sales and less favorable market conditions for the big drop in its quarterly earnings.

Net income fell to C$540 million ($535.63 million), or 28 Canadian cents a share, from C$1.22 billion, or 63 Canadian cents a share, a year earlier.

Manulife's insurance sales dropped 23 percent due to tax changes and the impact of higher prices, but the main weight on its earnings came from continued low interest rates and volatile equity markets.

Manulife said market movements stripped C$208 million from its bottom line. In the year-earlier period, stronger markets added C$75 million to its profit.   Continued...