(Reuters) – Canada’s Manolive Financial Inc reported better-than-expected quarterly profit on Wednesday, helped by a 40 percent rise in earnings from Asia, a region the insurer is betting on for growth.
The Asia business, which includes operations in 12 markets and more than 100 banking partnerships, is among the insurer’s biggest sources of revenue. It competes there with Canadian peer Sun Life.
Manolive held its investor conference in Hong Kong and Jakarta in June to reassure investors about its focus on Asia, a market it has been operating in since 1987.
At a June conference, the company postponed its goal of generating half of its profits in the sector to 2027 from 2025 due to the pandemic.
As part of its shift toward a higher-return, lower-risk business, Manolive said it expects to achieve a higher return on equity than previously reported by 2027 and expects to generate more than C$22 billion in cash in the same time period.
“The move towards lower risk and higher returns partly means things like reassuring more of our business,” Chief Financial Officer Colin Simpson said in an interview. “On top of that we’ve had growth in our asset management business, which is a fantastic high-return business.”
The company boosted sales in Japan and Hong Kong. In Canada, group insurance for large customers drove sales growth.
“That’s the benefit of having a diversified Asian portfolio… This quarter, it was Japan that really stole the show,” Simpson said, noting that equivalent annuity sales in Japan were up 93%.
APE sales rose 17% in the quarter, helped by a 61% jump in Manulife’s Canadian business and a 7% increase in its Asia unit. APE is a key sales metric used by life insurers.
Underlying earnings rose to C$1.74 billion ($1.26 billion), or 91 Canadian cents per share, in the three months ended June 30, from C$1.64 billion, or 83 Canadian cents per share, a year earlier.
Analysts had expected 88 Canadian cents per share, according to LSEG data.
Manolif shares are up 13.4% so far this year, compared with a 5.8% decline for Sun Life, which is due to report results next week. The Toronto Stock Exchange’s main index is up 4.9%.
($1 = 1.3758 Canadian Dollar)