TORONTO: Canada’s biggest life insurers Manulife Financial Corp and Sun Life Financial on Thursday flagged short-term challenges in Asia as a resurgence in coronavirus cases leads to a resumption of lockdowns and regional travel restrictions.
“We’re seeing a strong surge in the Delta variant, especially in Southeast Asia… and so all the governments are responding with various lockdown measures,” Sun Life Asia President Leo Grepin said on an analyst call on Thursday. “That obviously creates some uncertainty for us heading into Q3.”
Manulife Asia CEO Anil Wadhwani said earlier on an analyst teleconference that the resurgence of COVID-19, particularly in Southeast Asian markets where it has a presence, was presenting “momentum challenges.”
Both companies, however, said they remain confident in the region, where they have been expanding more rapidly than in other geographies. Manulife said it remains optimistic about medium-to-longer-term growth opportunities, while Sun Life’s Grepin expressed confidence about the company’s positioning due to investments in distribution and technology.
The resurgence in cases and the spread of the Delta variant has been concentrated mostly in developing countries with large unvaccinated populations, so areas of the business outside of Asia are less affected, said incoming Sun Life CEO Kevin Strain, who takes over from Dean Connor when he retires on Friday.
Despite the change of guard, Strain said he will continue the focus on advancing a digital strategy, sustainability and diversity.
“It’s a matter of intensifying versus changing” focus, he said in an interview on Thursday.
Both Manulife and Sun Life beat estimates for second-quarter core profit on Wednesday, helped by their asset management units and new business and insurance sales, particularly in Asia.
Manulife shares rose 1.8% to close at C$24.56 on Thursday in Toronto, while Sun Life shares fell 0.5% to C$64.72 in a broader market up up 0.2%.
CIBC Capital Markets analyst Paul Holden wrote in a note that both insurers reported “solid” results, although the bulk of the earnings per share upside at Sun Life came from lower taxes and technical factors, including “experience gains” which is the difference between the actual profit and the one based on actuarial profit estimates.
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