(Reuters) - Manulife Financial Corp (MFC.TO) said it has pushed out its profit goal of C$4 billion by a year to 2016, citing macro-economic conditions, although its quarterly loss narrowed as the performance of its investment portfolio improved.
The strong investment returns helped to offset a C$1 billion charge related to a shift in actuarial assumptions, Canada’s largest life insurer said.
Manulife reported a net loss of C$227 million ($228 million), or 14 Canadian cents per share, in the three months ended September 30, compared with a loss of C$1.28 billion, or 73 Canadian cents per share, a year earlier.
The company also a took a goodwill impairment charge of C$200 million as a result of low interest rates on its Canadian individual insurance business.
Manulife’s quarterly core earnings fell to C$556 million, or 29 Canadian cents per share, from C$624 million, or 34 Canadian cents per share, a year earlier.
Analysts had expected a net loss of 31 Canadian cents per share. Excluding items, the market had expected a profit of 32 Canadian cents per share, according to Thomson Reuters I/B/E/S.
Total premiums and deposits for the company’s wealth businesses rose 10 percent to exceed C$11 billion, driven by growth in most of Asia and also in the North American mutual fund and retirement businesses.
The insurer reported investment gains of C$413 million, in the quarter, of which C$50 million was included in core earnings.
Under Canadian accounting rules, insurers must regularly adjust their investment portfolios to ensure their ability to pay off future policy obligations. If the portfolios fall short, the insurers must make up the difference from reserves.
The European debt crisis has hurt equities and pushed down bond yields, putting more pressure on Manulife’s bottom line.
Manulife has responded by realigning its business lines and stepping up its hedging program.
Insurance sales fell 8 percent to $596 million.
Total insurance premiums and deposits of $5.6 billion were in line with the third quarter of 2011.
“We have now achieved our equity and interest rate hedging targets two years ahead of our 2014 goals, further reducing volatility of earnings,” said Chief Executive Donald Guloien.
Assets managed by Manulife Asset Management increased by $20.7 billion to $227.5 billion as at September 30.
Manulife said earlier that its exposure to superstorm Sandy was manageable and within its risk tolerance.
The Toronto-based company is primarily a life insurer but also provides property and casualty reinsurance.
($1 = 0.9958 Canadian dollars)
Reporting by Ashutosh Pandey in Bangalore; Editing by Supriya Kurane