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Louie Palu/The Globe and Mail

Thursday's stock market plunge provided Manulife chief executive Donald Guloien, who has now been on the job for a year, with a bit of an I-told-you-so moment.

"That's one of the benefits of fortress capital, when you see a move like that you don't have to worry so much about the impact on our company," he said in an interview after the afternoon market meltdown. "That's why the extra dose of conservatism comes in handy."

Manulife has been plagued by the jumbo exposure it has to equity markets as a result of its variable annuity and segregated funds business.

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In order to mitigate the problem, Mr. Guloien made the controversial decisions to chop the company's dividend and go to the market for more than $2.5-billion in common equity last year.

As a result, regulators' fears about the insurer's capital cushion and risks have diminished.

And, thanks to a hedging program, Manulife's sensitivity to stock markets is down significantly, notes chief financial officer Michael Bell. About 51 per cent of the portfolio backing the variable annuity business is now reinsured or hedged, up from 23 per cent a year ago.

Mr. Guloien says he doesn't think he'll raise the dividend again before the end of this year.

A 10 per cent move in stock markets still has about a $1-billion impact on Manulife's earnings these days. By contrast, a 10 per cent increase would boost Sun Life's earnings by about $75-million to $125-million, according to RBC Capital Markets analyst Andre-Philippe Hardy.

Sun Life CEO Don Stewart says the stock market volatility is a reminder that the recovery is fragile.

"Considerable volatility intraday is a very clear manifestation of market nervousness," he said. "In the last several months and particular weeks we've seen a lot of evidence that things are more robust, but we've also seen the potential for any number of things to make that apparent robustness very fragile."

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