Canada’s largest life insurance provider posted a C$947 million loss in the third quarter, which has been blamed on low interest rates and a C$1 billion writedown on Manulife’s U.S. insurance business.
Group retirement solutions sales were down in the third quarter. The company’s 2009 third quarter sales were boosted by strong results in the group annuity market, which accounted for 70% of the full year sales in this market, as well as the exit of a competitor from the industry. In 2010, Manulife says it has met market share targets in the group annuity market and that activity is down across the industry, a reflection of the low interest rate environment.
On the positive side, group benefits sales rose 18% from the second quarter and were in line with the prior year. Sales in the higher margin, small case segment continued the momentum gained during the second quarter and the company is “keenly focused on growth in this end of the market.”
“Despite the reported results, our underlying earnings were strong. We are successfully repositioning our business for future earnings growth, ROE expansion and to reduce capital market risk,” said Manulife CEO Donald Guloien.