TORONTO (Reuters) - Two of Canada’s biggest insurance companies on Wednesday reported second-quarter earnings which beat market expectations, benefiting in part from strong growth in Asia.
Canadian insurance companies are expanding rapidly in the region, selling products to its growing middle class, and the strategy is helping them drive growth and diversify from domestic markets where competition is intense.
In an interview, Sun Life’s Chief Executive Officer Dean Connor said the company’s performances in Hong Kong, the Philippines, India and Malaysia had been particularly strong.
Connor said the company plans to grow its Asian business to account for more than a quarter of its earnings compared with around 18 percent currently.
“The demographics are helpful,” he said. “You’re seeing more people wanting to buy insurance and, in China and India in particular, people in their 30s and 40s are having a more positive view of life insurance than their parents did.”
Sun Life reported net income, excluding one-off items, of C$729 million, or C$1.20 share, compared with C$689 million, or C$1.12 Canadian cents per share, the year before. Net income at its Asian business rose to C$145 million from C$123 million a year ago.
Analysts had on average forecast earnings, excluding one-off items, of C$1.15, according to Thomson Reuters I/B/E/S data.
Rival Manulife Financial Corp reported core earnings of C$1.43 billion ($1.10 billion), or 70 Canadian cents per share, for the second quarter, compared with C$1.17 billion, or 57 cents per share, the year before.
Manulife said that core earnings at its Asian business rose to C$406 million during the quarter from C$350 million a year ago. Analysts had on average expected earnings of 65 Canadian cents per share, according to Thomson Reuters I/B/E/S data.
Reporting by Matt Scuffham; Editing by James Dalgleish