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Canada’s largest insurer Manulife Financial Corp MFC-T on Wednesday reported better-than-expected earnings for the third-quarter, boosted by insurance sales in Asia and higher returns on investment amid rising interest rates.

Core earnings rose 28 per cent to $1.74-billion, or 92 cents per share. Analysts were expecting 82 cents per share, according to LSEG estimates.

Manulife said its business in Asia was driven by demand from mainland Chinese visitors following the reopening of the Hong Kong border this year.

The company said higher interest rates boosted its earnings from investments and surplus assets, as well as improved insurance sales in Canada.

Life insurance companies generally buy long term bonds to support their products that cover long periods of time. The rise in interest rates have benefited life insurers as they can roll over their maturing bonds at higher interest rates.

Morningstar analyst Suryansh Sharma noted that high interest rates would continue to benefit insurers.

“Your incremental interest income is increasing because of higher interest rates,” Sharma said, noting Manulife’s core return on equity for the quarter was 16.8 per cent, higher than the company’s long-term target of 15 per cent.

Manulife said higher rates would continue to boost its businesses.

“We are in a position of strength to weather macroeconomic uncertainties,” CEO Roy Gori said in a statement.

Annual premium equivalent (APE) sales, an annualized sales metric, at Manulife’s Asia unit rose 20 per cent to C$835-million and in Canada rose 51 per cent. Overall, APE sales rose 21 per cent.

Asia is the biggest sales contributor, given Manulife’s presence in 12 markets that includes over 100,000 agents and over 100 bank partnerships.

Core earnings in Asia rose 33 per cent, while they rose 4 per cent in Canada.

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