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The well-manicured lawn at the Manulife Financial headquarters at 200 Bloor St. E., Wednesday, June 21, 2012.
The well-manicured lawn at the Manulife Financial headquarters at 200 Bloor St. E., Wednesday, June 21, 2012.
(Galit Rodan/The Globe and Mail)

Optimism returns to insurance industry, but patience is required

Canada’s life insurers have had a longer road out of the recession than other businesses, but one analyst says now is the time for optimism. Now is the time, that is, so long as you’re not holding out for a dividend raise or share buybacks this year. Or next year, for that matter.

For those changes to happen, the insurers need to crank down their leverage ratios, Robert Sedran, analyst at CIBC World Market suggests in a note Friday. This measure of a company’s debt profile and ability to meet financial expectations is still at a higher level than before the financial crisis. If insurers don’t ratchet them down, they could risk ratings downgrades.