The insurers all reported higher assets under management as they saw inflows of investments and market gains, with Sun Life up 11% to $1.39 trillion compared with the end of 2020, Manulife up 7% to $1.4 trillion over the same period, and Great West up 11% to $2.2 trillion.
All three also reported negative effects of the pandemic, particularly in their U.S. and Asian divisions.
Manulife said its earnings were impacted by a $152 million charge to its property and casualty reinsurance business for losses related to Hurricane Ida and European floods, and the effects of Covid-19 on policyholders in Asia and the U.S.
Anil Wadhwani, CEO of Manulife Asia, said on an earnings call Thursday that the pandemic affected the division both in sales and claims.
“We saw a significant impact on account of the resurgence of Covid in Southeast Asian market, and that had an impact on at two levels. One, we saw our sales volume get impacted; and the second, we experienced adverse policyholder experience specifically coming out of markets like Indonesia and Philippines.”
Great-West said third quarter earnings were down 31% in its capital and risk solutions division compared with last year because of major weather events and unfavourable U.S. life claims totalling $71 million from direct and indirect Covid-19 impacts.
And Sun Life said its U.S. business saw a 19% drop in underlying net income because of higher claims from Covid-19, as well as lower base earnings in its Asian division because of the effects of the pandemic especially in Indonesia and the Philippines.
Daniel Fishbein, president of Sun Life’s U.S. division, said on an earnings call Thursday that the higher claims in the U.S. came as Covid-19 hit working age people who have lower vaccine rates than those over 65.
“The third quarter was the worst quarter for mortality in the U.S. in the working age population since the pandemic began […] so in the third quarter, we saw a big shift in mortality into the working age population.”
Scotiabank analyst Meny Grauman said in a note that the key news from Sun Life was its upgraded expectations for return on equity to 16% for the medium-term, while the company’s performance in the U.S. and Asia both came in below expectations to impact results.
“We expect both of those impacts to be temporary, but they do take some of the shine off of what in our view is a constructive earnings release.”
Grauman said that Manulife core earnings per share were 4% below his expectations, but that overall the results were neutral.
“We see them as neutral thanks to a number of offsetting pluses and minuses, and most notably no major red flags.”
He said that a potential catalyst for Manulife is aggressive share buybacks if Canada’s financial services regulator lifts restrictions on them, as is expected to be announced Thursday.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
