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In early 2022, Canadian insurers saw a spike in mortality claims as the Omicron variant of COVID-19 surged throughout the United States and Canada.Cole Burston/The Canadian Press

Declining mortality claims in North America, a rebound in travel insurance and the easing of pandemic restrictions in China are signs that the mortality impact of the three-year pandemic is finally tapering off, Manulife Financial Corp. MFC-T chief executive Roy Gori says.

“I don’t know if we can declare what normal looks like in the new world order but as it relates to mortality specifically, we have seen, broadly, a return to prepandemic levels,” Mr. Gori said in an interview with The Globe Thursday.

In early 2022, Canadian insurers saw a spike in mortality claims as the Omicron variant of COVID-19 surged throughout the United States and Canada. Now, as new cases of the virus continue to decline, Manulife ended 2022 with more “normalized” mortality claims, Mr. Gori said.

Manulife reported fourth-quarter “core earnings” of $1.75-billion or 88 cents a share, compared with $1.71-billion or 84 cents in the fourth quarter of 2021. (Core earnings is a metric Manulife uses that strips out investment losses and makes other accounting adjustments.) Manulife said the earnings were down 2 per cent, year over year, after accounting for the effects of currency conversions.

Manulife’s profit for the quarter was $1.8-billion, down from $2.1-billion the previous year.

Despite lower net income in the fourth quarter, the insurer reported profit of $7.2-billion for the full year in 2022, up $200-million from 2021, driven by gains through two transactions in its U.S. annuities business and a recent change in the Canadian corporate tax rate.

Manulife’s global wealth and asset management business ended the year with $3.3-billion in sales, down from the $27.9-billion in sales the company saw in 2021. Despite the major drop, the insurer managed to maintain net overall sales during a time when Mr. Gori said on average many of the company’s peers saw investors pull about $7.5-billion out of investments in a challenging market environment.

“Looking at the year ahead, volatile markets will continue to create some strain and challenge, but it’s also going to create opportunity,” Mr. Gori said.

“Investors are realizing that they need to have a balanced portfolio that is diverse. One that covers fixed income, and equities that are not just geographically located in one region, but rather global equities, and a portfolio complemented with alternatives.”

In Asia – where the insurer has 13 operations – the COVID-19 lockdown throughout 2022 continued to affect sales. The region reported core earnings of $2.13-billion for the year, down slightly from $2.18-billion in 2021.

The weaker customer sentiment in Hong Kong – because of border closures with China seen in the third quarter and continuing into the fourth quarter – led to lower sales volumes, Manulife chief financial officer Phil Witherington said during an analyst call Thursday. But the decline was partly offset by higher sales in Japan, a country that had to rebound from negative sales in the last two years after regulatory tax changes affected corporate-owned life insurance products, which are policies that pay businesses when employees die.

While those corporate-owned products contributed to a 15-per-cent decline in annualized premiums in Japan, the country saw a 28-per-cent increase in new business value as a result of an expanded product portfolio beyond COLI products.

“Japan is the third largest insurance market in the world … and delivers very high margins and good profitability,” Mr. Gori said. “We have done a lot of work in the last two years to reposition our product portfolio in Japan and pivot away from the reliance on [corporate-owned life insurance], and that is starting to come through.”

The Canadian business reported core earnings of $350-million for the fourth quarter, up from $286-million in the same quarter in the year prior. Part of that increase came from a higher demand in group insurance sales and an uptick in travel insurance, with more individuals buying insurance when they travel, and clients booking more trips as the sector rebounds from lockdowns and quarantines.

“The pandemic has really brought the importance and value of insurance to the to the forefront of everyone’s thinking,” Mr. Gori said. “People have realized that they don’t have as much coverage as they need and that they should put much more time and effort into thinking about their insurance needs.”

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