Canadian insurers Manulife Financial (NYSE:MFC) and Sun Life Financial (NYSE:SLF) beat quarterly profit expectations in the fourth quarter.

Strong Asset Management Growth

Results were boosted by strong growth in their asset management units. 

The wealth and asset management business of Manulife and Sun Life has surged during the pandemic, helping to offset the impact of claims related to the COVID-19 pandemic. However, Sun Life warned that the spread of the Omicron variant will have an impact on the next quarter earnings.

Manulife Earnings

Manulife’s 27% increase in earnings in the global wealth and asset management business helped offset lower earnings in Asia, Canada and the United States.

Core earnings for the three months ended December were C$0.84  per share, up 13.5% from a year earlier and better than analysts’ forecast of C$0.82 per share, according to Refinitiv.

Manulife, Canada’s largest life insurer, also reported new business growth in all markets.

Manulife President & Chief Executive Officer Roy Gori said: “Our ability to adapt and serve clients across the globe who are navigating a very uncertain environment continues to drive our operating results with record net income of $7.1 billion and core earnings of $6.5 billion in 2021 driven by our insurance businesses delivering double-digit growth in APE sales and NBV and Global WAM delivering strong net inflows of $27.9 billion.”

Sun Life Earnings

Sun Life, a smaller rival, reported underlying profit broadly in line with estimates, thanks to a 15% growth in its asset management unit to C$382 million. This growth, combined with increased earnings in Canada and Asia, helped offset a 51% decline in US business and pushed overall earnings up 4%.

Sun Life’s President and CEO Kevin Strain said: “Sun Life delivered strong performance in 2021 as we continued to navigate uncertainties of the ongoing pandemic across our markets. We ended the year with a solid fourth quarter driven by growth in wealth and asset management. Our assets under management grew to $1.4 trillion, up 15% from prior year. Insurance sales were strong, increasing 13% from prior year, contributing to 16% growth in value of new business. I am proud of how our Sun Life employees and advisors continued to drive positive financial and health impacts for our Clients, especially now, when they need us most.”

The growth in Asia was partially offset by COVID-19 related deaths of C$12 million, mostly in the Philippines.

Sun Life’s underlying quarterly profit rose 4.2% to C$898 million from a year earlier, or C$1.53 per share, compared to analysts’ forecast of C$1.52 per share.

Manulife and Sun Life are raising premiums to offset rising costs this year due to inflation hitting record highs.