Manulife Financial Corporation MFC delivered second-quarter 2024 core earnings of 66 cents per share, which beat the Zacks Consensus Estimate by 3.1%. The bottom line improved 6.4% year over year.
Manulife Financial Corp Price, Consensus and EPS Surprise
Manulife Financial Corp price-consensus-eps-surprise-chart | Manulife Financial Corp Quote
Core earnings of $1.3 billion (C$1.7 billion) increased 8.3% year over year. The improvement was driven by continued business growth momentum and updates to actuarial methods and assumptions in the second half of 2023, higher fee income from favorable market impacts and positive net flows, a favorable tax true-up, strong growth in Group Insurance and favorable net insurance experience.
New business value (NBV) in the reported quarter was $528 million (C$723 million), up 21.4% year over year.
New business contractual service margin of $459 million (C$628 million) rose 4.1% year over year.
Annualized premium equivalent (APE) sales increased 16.7% year over year to $1.4 billion (C$1.9 billion), attributable to higher sales in Asia and Canada.
The expense efficiency ratio increased 30 basis points (bps) to 45.4%. The increase reflects a rise of 6% and 7% in pre-tax core earnings and core expenses, respectively.
Wealth and asset management assets under management and administration were $682 billion (C$933.1 billion), up 10.3% year over year.
Retail net outflows of $0.1 billion remained unchanged year over year, as increased demand for investment products amid equity market recovery and improved investor sentiment was offset by higher redemptions.
Core return on equity, measuring the company's profitability, expanded 20 bps year over year to 15.7%. The financial leverage ratio deteriorated 120 basis points to 24.6% at the end of the quarter.
Life Insurance Capital Adequacy Test ratio was 139% as of Jun 30, 2024, up from 136% reported in the year-ago quarter.
Adjusted book value per common share was $33.96, up 15% year over year.
Segmental Performance
Global Wealth and Asset Management division's core earnings came in at $291.6 million (C$399 million), up 22.5% year over year.
Asia division's core earnings totaled $472 million, up 40% year over year. NBV, APE sales and new business CSM increased 19%, 7% and 10%, respectively, year over year, reflecting higher sales volumes in Japan and Hong Kong.
Manulife Financial's Canada division's core earnings of $294 million (C$402 million) were up 6.1% year over year. APE sales and NBV increased 61% and 50%, respectively, driven by higher sales volumes in all business units, led by a large-case Group Insurance sale. New business CSM grew 33%, driven by margin expansion in Individual Insurance and higher sales volumes in segregated fund products.
The U.S. division reported core earnings of $303 million, down 11% year over year. APE sales decreased 4% year over year with a shift in product mix, while NBV grew 3%. New business CSM decreased 30% due to a change in product mix and the impact of higher interest rates.
Zacks Rank
Manulife Financial currently carries a Zacks Rank #4 (Sell).
Performance of Other Life Insurers
Voya Financial, Inc. VOYA reported second-quarter 2024 adjusted operating earnings of $2.27 per share, which beat the Zacks Consensus Estimate by 3.6%. The bottom line, however, decreased 1.7% year over year. Adjusted operating revenues amounted to $324 million, down 6.6% year over year. The top line missed the Zacks Consensus Estimate by 0.4%.
Net investment income declined 5% year over year to $518 million. Premiums totaled $790 million, up 16.7% from the year-ago quarter. As of Jun 30, 2024, VOYA's assets under management, assets under administration and advisement totaled $861.3 billion.
Lincoln National Corporation's LNC second-quarter 2024 adjusted earnings of $1.84 per share beat the Zacks Consensus Estimate by 3.4%. However, the bottom line declined 8.9% year over year. Adjusted operating revenues of $4.5 billion dropped 4.3% year over year in the quarter under review. The top line lagged the consensus mark by 2.7%.
Fee income declined 1.9% year over year to $1.3 billion, which missed the Zacks Consensus Estimate by 2.1%. Insurance premiums of $1.6 billion rose 0.8% year over year. The metric beat the consensus mark by 0.7%. Net investment income of $1.3 billion dipped 11.7% year over year and missed the consensus mark by 1.7%. Meanwhile, other revenues fell 5.9% year over year.
Reinsurance Group of America, Incorporated RGA reported second-quarter 2024 adjusted operating earnings of $5.48 per share, which beat the Zacks Consensus Estimate by 10.9%. The bottom line increased 24.5% from the year-ago quarter. Net foreign currency fluctuations had a favorable effect of 6 cents per share on adjusted operating income compared with the prior year. RGA's operating revenues of $5.1 billion improved 20.3% year over year, driven by higher net premiums, investment income, net of related expenses and other revenues. It beat the consensus estimate by 4.7%.
Net premiums of $3.9 billion jumped 17.5% year over year. Investment income and net of related expenses increased 26.3% from the prior-year quarter to $1.1 billion. The average investment yield increased 23 basis points to 4.65%, primarily due to higher new money rates. Total benefits and expenses at Reinsurance Group climbed 18.5% year over year to $4.6 billion.
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