TORONTO, May 12 (Reuters) - Manulife Financial Corp
shares fell to their lowest level since January 2021 after the
company's first-quarter core earnings declined due to lower
sales and new business disruptions in Asia as COVID-19
infections rose in some parts of the region.
Both Manulife, and rival Sun Life, which also
reported a drop in underlying profit driven by higher U.S.
claims from the pandemic as well as lower sales in Hong Kong,
said they expect the impacts of COVID-19 to linger.
Manulife missed analysts' estimates, while Sun Life beat
Manulife shares dropped 9.4% to C$22.06, their lowest
intraday level since December 2020. Sun Life shares fell 2.4% to
C$61.20. The broader Toronto stocks benchmark lost 0.8%.
The resurgence seen in the first quarter, most notably in
Hong Kong, was "temporary in nature... but it's not necessarily
true that we'll see an immediate bounce back in one quarter,"
Roy Gori, Chief Executive of Manulife, Canada's biggest life
insurer, said on an analyst call.
Gori said the company still believes the "Asia opportunity
is undeniable," and reiterated the company's goal of achieving
half of core earnings from the region by 2025.
CIBC analysts said in a note that persistent growth
challenges in Asia mean the company could miss analysts'
expectations for the fiscal year.
Sun Life, Canada's second-biggest life insurer, is seeing
"significant" improvement in U.S. death claims, Daniel Fishbein,
president of its U.S. insurance business, said on its analyst
call. But "we don't think that COVID is going away completely,
and we do think there will be elevated mortality for a
significant period of time."
The insurers also noted challenges from market volatility
and the impact of inflation on expenses, but said the benefits
from higher interest rates would help offset some of this.
(Reporting By Nichola Saminather; Editing by Nick Macfie and