By Selena Li
HONG KONG – Manulife Financial’s Asia unit is on track to account for half of the Canadian insurer’s core earnings by 2025 despite economic slowdowns and impact of COVID-19 to its key markets, the newly appointed regional chief executive told Reuters.
Manulife set the earnings target for Asia, which last year brought in 35% of the group’s global earnings, in September last year and challenges to the sector have gathered pace this year as China’s economy slows and the COVID cases resurge in many regions.
Asia, where Manulife operates in 13 markets with about 13 million customers, dragged down the firm’s earnings in 2021 and weakened its performance in the first quarter.
“I think we’re broadly on track, our strategy is broadly on track,” said Asia CEO Damien Green, who was appointed to lead Manulife Asia in May, four years after he joined the Canadian insurance company and was most recently its Hong Kong chief.
“We’ve all been disrupted and distracted for the last two years … but the secular trends in Asia are the same as it goes to life insurance, in particular, a rising middle class and a rising need for health and retirement protection, and China.”
Asia is an important area for global and regional insurers, with international companies attracted by the region’s rapidly growing middle-class looking for life and healthcare insurance as well as investment options and low coverage ratios.
Manulife missed analysts’ estimates in first quarter on sluggish sales in Hong Kong, one of its largest Asian markets that saw a rise in COVID cases in the first few months of 2022 with weeks-long curbs stifling the economy.
Green said the industry hopes the border control between Hong Kong and the mainland would ease in the fourth quarter, allowing southbound travellers to purchase insurance products in the financial hub – a key source of business for insurers.
Despite the downturn, Manulife grew its Hong Kong agents’ headcount by 10% last year and added another 7% in the first quarter betting on a business revival.
The insurer also plans to expand its agency staff at a double-digit rate in Vietnam and Indonesia, he added.
(Reporting by Selena Li; Editing by Sumeet Chatterjee and Louise Heavens)