TORONTO (Reuters) - Two of Canada’s biggest insurance companies reported third-quarter earnings on Wednesday that beat market expectations, benefiting in part from strong growth in Asia.
Canadian insurance companies are expanding rapidly in Asia, selling products to the rapidly growing middle class. The strategy is helping the firms drive growth and diversify from domestic markets where competition is intense.
Canada’s biggest insurer, Manulife Financial Corp (MFC.TO), said on Wednesday that earnings per share, excluding one-off items, rose to C$0.53 in the third quarter ended Sept. 30 from C$0.49 in the same period the year before.
Analysts had, on average, forecast earnings per share excluding one-off items of C$0.52, according to Thomson Reuters I/B/E/S data.
Manulife reported net income, excluding one-off items, of C$1.1 billion ($864 million), up from C$996 million the year before. But it set aside C$240 million to cover the impact on its property and casualty reinsurance business from damage caused by hurricanes Harvey, Irma and Maria.
“We delivered solid core earnings and net income in the third quarter, particularly given the provision for catastrophe claims,” said Manulife Chief Executive Officer Roy Gori, who took up his role in October.
Gori said Manulife had benefited from double-digit core earnings growth and increased sales in Asia and a 31st consecutive quarter of positive net flows in its global wealth and asset management business.
Sun Life Financial (SLF.TO) reported earnings per share, excluding one-off items, of C$1.05 in the third quarter to Sept. 30, compared with C$1.04 in the same period the year before.
Analysts had, on average, forecast earnings, excluding one-off items, of C$1.01 Canadian cents per share, according to Thomson Reuters I/B/E/S data.
Sun Life reported underlying net income, excluding one-off items, of C$643 million, up from C$639 million a year ago. Underlying net income at its Asian business increased to C$90 million from C$80 million a year ago.
“Asia really is the fastest growing of our four businesses driven by strong economic and demographic growth with people moving up into the middle class seeking what our industry has to offer,” Chief Executive Dean Connor said in an interview.
“Those forces should drive strong growth, over the medium term, in Asia.”
Connor said Sun Life was considering further acquisitions in the region.
“We’re always looking,” he said. I think acquisitions will continue to be an important part of our growth strategy.”
Reporting by Matt Scuffham; Editing by Chris Reese and Peter Cooney