Sun Life Financial Inc. President and CEO Dean Connor attends the company’s annual general meeting in Toronto on Wednesday, May 6, 2015. Amid the grim backdrop of COVID-19 fatalities, Canadian insurers have also found an increased interest in life and health insurance. THE CANADIAN PRESS/Chris Young

Sun Life Financial Inc. President and CEO Dean Connor attends the company’s annual general meeting in Toronto on Wednesday, May 6, 2015. Amid the grim backdrop of COVID-19 fatalities, Canadian insurers have also found an increased interest in life and health insurance. THE CANADIAN PRESS/Chris Young

Insurers see profit gains despite ‘tough year’ of COVID-19 fatalities

Chief executive of Manulife Canada said the pandemic may have increased the appetite for insurance in Canada

Amid the grim backdrop of COVID-19 fatalities, Canadian insurers have also found some consumers have an increased interest in life and health insurance.

Sun Life chief executive Dean Connor said it was a “tough year” as the insurer paid out $200 million to the families of clients who succumbed to COVID-19. But Sun Life also said it saw lower benefits usage brought about by the pandemic as it extended grace periods for premium payments.

The comments were part of conference calls with analysts about the insurers’ fourth-quarter financial results. Both Manulife and Sun Life grew profits during the last three months of 2020 and beat average analyst expectations from financial data firm Refinitiv.

When announcing the results, Manulife chief executive Roy Gori said the “events of the past year have reinforced the value of insurance, well-being, retirement and wealth management programs.” Manulife chief actuary Steven Finch said the company had “shored up” in anticipation during the pandemic and was prepared for the COVID19-related claims.

Manulife said there were mortality losses from excess deaths in its U.S. life insurance business, alongside claim terminations in the long-term care insurance business due to the impact of COVID-19. In addition to life insurance, the company offers policies that cover the cost of long-term services and support.

Michael Doughty, the chief executive of Manulife Canada, said that the COVID-19 pandemic may have also increased the appetite for insurance in Canada.

“We do know that, you know, coming out of the SARS crisis, we did see an increase in interest in life insurance. And I think that is one trend that we’ll see around the globe, frankly, as as we move forward.

“We certainly see it already,” said Doughty, who added that sales of individual health and dental insurance were up in Canada, as well as mortgage creditor business.

During early stages of the COVID-19 lockdowns last year, Doughty said that traditional individual life insurance sales initially suffered in Canada as people weren’t able to get paramedical testing. But between the third and fourth quarters last year, sales bounced back, rising 17 per cent, Doughty said

“There certainly is more frequency of short-term disability claims caused by COVID-19,” said Daniel Fishbein, president of Sun Life Financial U.S. “The other aspect of this is sales. Sales have remained strong for us. They were up year-over-year, and strong in all of our businesses.”

The two Toronto-based insurers have been vying for growth internationally as they try to hedge their businesses against various risks and diversify their portfolios. Asia has become a key market for both brands, both in established financial centres like Hong Kong and emerging markets.

ALSO READ: Cineplex CEO says cinemas ‘could help in a big way’ as potential vaccination sites

Manulife’s Gori called Asia the “Crown jewel” of the business, rising from 35 per cent of earnings in 2016 to 41 per cent in 2020. By 2025, Asia could represent about half of the company’s earnings base, Gori said. Sun Life executives called Asia a market with “huge potential” where they are focused on building scale.

Both Manulife and Sun Life also pointed to their digital initiatives. Sun Life said it had tripled the number of workers using its digital Maxwell Health tools between 2019 and 2020.Manulife subsidiary John Hancock launched a collaboration with Amazon in the U.S., where gave free wearable health trackers to life insurance customers.

“From a Canadian perspective, we certainly have also taken advantage of the pandemic to digitize a lot of our processes,” Manulife’s Doughty said. “I think that will help with the ability to process sales and make it easier for both customers and advisors going forward.”

Sun Life’s Connor also noted the company’s focus on improving climate-change related disclosures and getting better diversity within in the company. Connor said Sun Life plans to have gender parity at the executive level by 2025, and have 25 per cent of executive roles staffed by underrepresented ethnicities in North America, including goals for Black and Indigenous people of color.

Gabriel Dechaine of National Bank of Canada Equity Research wrote that despite the spectre of setting aside reserves to deal with mortalities, Manulife ended the year on a strong note.

Although we are generally averse to corporate buzzwords, (Sun Life’s fourth quarter) was emblematic of the company’s ‘resilient business mix.’ That is, despite weaker than normal investment performance … the company delivered a solid earnings beat,” wrote Dechaine in a client note.

Anita Balakrishnan, The Canadian Press


Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

Coronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Ron Sivorot, business director at Kennametal’s Langford site, the Greater Victoria facility that made a component being used on NASA’s Perseverance rover on Mars. (Jake Romphf, Black Press Media)
NASA’s Perseverance Mars rover using piece made at Kennametal’s Langford site

The Greater Victoria plant’s tooth blank is helping the rover’s drill collect rock cores

A provincially appointed consultant has recommended a change to the funding formula for the VicPD that will save Esquimalt a significant amount of money. (Black Press Media file photo)
Esquimalt to save a bundle on policing costs under new formula

Provincial consultant studied funding model, resource deployment for VicPD

A rockfall closed Finlayson Arm Road and West Shore Parkway on Friday (March 5) afternoon. (Twitter/BC Transportation)
UPDATED: Malahat reopens following rockfall

Section of Trans-Canada Highway was scheduled for intermittent closures today for rock scaling work

A Victoria resident was scammed out of $1,700 after a fraudster impersonated a police officer and convinced the victim to pay a non-existent fine in Bitcoin. (Unsplash)
Fraudster impersonates Victoria police officer, steals $1,700 in Bitcoin

Phone call showed up as VicPD’s non-emergency line

The Tsartlip First Nation was outraged after Green MLA Adam Olsen revealed on social media that the community had been experiencing a COVID-19 outbreak – a fact the First Nation had chosen to keep private to avoid racist backlash as experienced by the Cowichan Tribes when an outbreak was declared there in January. (Black Press Media file photo)
Tsartlip First Nation ‘outraged’ after Green MLA revealed COVID-19 outbreak

Chief shares concerns about racist backlash, MLA Adam Olsen apologizes

Provincial health officer Dr. Bonnie Henry updates B.C. on the COVID-19 situation. (B.C. government)
Dr. Bonnie Henry predicts a ‘post-pandemic world’ for B.C. this summer

‘Extending this second dose provides very high real-world protection to more people, sooner’

Malawian police guard AstraZeneca COVID-19 vaccines after the shipment arrived in Lilongwe, Malawi, Friday March 5, 2021. Canada is expecting its first shipments of AstraZeneca vaccine next week. (Associated Press/Thoko Chikondi)
B.C.’s daily COVID-19 cases climb to 634 Friday, four more deaths

Currently 255 people in hospital, 66 in intensive care

A crashed helicopter is seen near Mt. Gardner on Bowen Island on Friday March 5, 2021. Two people were taken to hospital in serious but stable condition after the crash. (Irene Paulus/contributed)
2 people in serious condition after helicopter goes down on Bowen Island

Unclear how many passengers aboard and unclear where the helicopter was going

Surrey Pretrial in Newton. (Photo: Tom Zytaruk)
B.C. transgender inmate to get human rights hearing after being held in mostly male jail

B.C. Human Rights Tribunal member Amber Prince on March 3 dismissed the pretrial’s application to have Makayla Sandve’s complaint dismissed

Supporters rally outside court as Pastor James Coates of GraceLife Church is in court to appeal bail conditions, after he was arrested for holding day services in violation of COVID-19 rules, in Edmonton, Alta., on Thursday March 4, 2021. THE CANADIAN PRESS/Jason Franson
‘Law remains valid:’ Pastor accused of violating health orders to remain in jail

The Justice Centre for Constitutional Freedoms is representing the pastor

The Netflix logo on an iPhone. B.C. delayed imposing sales tax on digital services and sweetened carbonated beverages as part of its response to COVID-19. Those taxes take effect April 1, 2021. THE CANADIAN PRESS/AP, Matt Rourke
B.C. applies 7% sales tax on streaming, vaping, sweet drinks April 1

Measures from 2020 budget were delayed due to COVID-19

A lawyer wears a face mask and gloves to curb the spread of COVID-19 while waiting to enter B.C. Supreme Court, in Vancouver, B.C., Friday, Aug. 28, 2020. British Columbia’s highest court has sided with the land owner in a dispute over public access to public land. THE CANADIAN PRESS/Darryl Dyck
B.C. high court finds in favour of large landowner in fight over access to pair of lakes

The Nicola Valley Fish and Game Club launched legal action after the cattle company blocked road and trail access

Prime Minister Justin Trudeau holds a press conference in Ottawa Friday, March 5, 2021. THE CANADIAN PRESS/Sean Kilpatrick
Trudeau holds firm on premiers’ health-care funding demands, COVID-19 aid comes first

Premiers argue that the current amount doesn’t keep pace with yearly cost increases of about five per cent

Free Reformed Church is seen as people attend service, in Chilliwack, B.C., on Sunday, Feb. 21, 2021. Lawyers for the British Columbia government and the Justice Centre for Constitutional Freedoms are back in B.C. Supreme Court today, squaring off over the legality of COVID-19 rules that prohibit in-person religious services. THE CANADIAN PRESS/Darryl Dyck
B.C. top doctor has power to restrict access to a place during health hazard: lawyer

Under B.C.’s Public Health Act, Jacqueline Hughes says, Henry can restrict or prevent entry to a place

Most Read