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Canada’s largest life insurers are pulling through the pandemic with profits intact thanks to expanding Asian operations as the continent passes the one-year anniversary of the onset of COVID-19.

Manulife Financial Corp. and Sun Life Financial Inc. , which both reported fourth-quarter earnings on Wednesday evening, said they have seen strong momentum in their Asian markets over the past several years.

Manulife reported core profit of $571-million for its business in Asia, up 16 per cent from the year prior. Chief executive officer Roy Gori told The Globe and Mail that the company’s Asian operations have played a big role in Manulife’s ability to weather the pandemic, as globally diverse operations allowed the company to offset headwinds during various lockdowns in a number of jurisdictions.

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“We really benefited in 2020 from the global diversity of our franchise – and not just across the three broad geographies of Canada, the U.S. and Asia – but even within Asia,” Mr. Gori said. “The geographic diversification that we have across the different markets there meant that when we saw some markets entering more restrictive conditions and environments, we saw others that were loosening or relaxing.”

Manulife operates in 13 Asian regions that account for more than 41 per cent of the company’s earnings – up from 35 per cent in 2016. Mr. Gori said that proportion will hit 50 per cent by 2025.

Similarly, Sun Life continues to boost its insurance and wealth management businesses in Asia, where it operates in eight regions. While the Asia business had a decline in profit for the quarter – a 19-per-cent drop year-over-year largely because of losses from a real estate fund managed by its joint venture in India – the company had an 11-per-cent increase in insurance sales in Asia, and a 61-per-cent increase in wealth sales.

Sun Life CEO Dean Connor said despite the slight dip in earnings for the region, the insurer is still on track for Asia to “eventually account for 25 per cent of the company.”

Sun Life employees in several Asian countries have successfully returned to their offices, a move Mr. Connor is closely watching as Canada continues to have a majority of employees working from home.

In North America, Sun Life continues to look at its office space and has reduced its “corporate footprint” in various financial centres by about 15 per cent. As a result, the company reported a $20-million after-tax restructuring charge related to “simplifying organizational structure and driving efficiencies.”

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Sun Life chief financial officer Kevin Strain told analysts on Thursday that he expects the savings from these initiatives to be roughly $25-million before taxes.

“We continue to focus on expense discipline across our businesses while benefiting from lower discretionary spending such as travel and conferences related costs due to COVID 19,” said Mr. Strain, who will be taking over as CEO in August. “We have also been deploying a strategy for our work force and redefining the role of the office in a post-COVID environment.”

Mr. Strain said the company expects to take a further charge of $40-million to $60-million after-tax in the first quarter to “reflect vacating and reconfiguration of existing workplaces,” which will generate additional savings of about $20-million.

Both Manulife and Sun Life surpassed analyst expectations, with the two Toronto-based insurers seeing overall profits increase for the three months ended Dec. 31.

Sun Life Financial reported fourth-quarter profit of $744-million or $1.27 a share, up from $719-million or $1.22 in 2019′s fourth quarter. Manulife Financial reported fourth-quarter profit of $1.7-billion or 89 cents a share, compared with $1.2-billion or 61 cents.

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