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

Wildlife advocate Gary Schroyen captured this picture of a one-year-old cougar in the Sooke Hills using a homemade trip camera. Vancouver Island is home to approximately 800 cougars, which makes up about a quarter of the total population in B.C. (Gary Schroyen photo)
Wildlife advocate Gary Schroyen captured this picture of a one-year-old cougar in the Sooke Hill using a homemade trip camera. Schroyen presents Animal Signs: The Essence of Animal Communication on Nov. 30. (Gary Schroyen photo)
Declining Vancouver Island cougar populations linked to wolves

Large carnivore specialist says human development still plays biggest role on cougar numbers

A cat died in this house fire in Sidney afternoon. The fire started on the house’s deck and spread from that point. Sidney Volunteer Fire Department Chief Brett Mikkelsen said the permanent presence of crews at the Community Safety Building prevented worse damage. (Photo courtesy of Clayton Firth)
Sidney house fire kills cat, causes extensive damage

Official says fire started on deck and damage to the house could have been worse

SD62 has announced a COVID-19 exposure at David Cameron Elementary in Colwood. (Black Press Media file photo)
SD 62 (Sooke) has announced a COVID-19 exposure at David Cameron Elementary in Colwood. Potential exposure dates are Monday, Feb. 22; Tuesday, Feb. 23; and Wednesday, Feb. 24. (Black Press Media File).
COVID-19 exposure at Colwood’s David Cameron Elementary

Potential exposure dates are Feb. 22-24

Millstream Village is welcoming a new Marshalls location March 9. (Photo courtesy GWL Realty Advisors)
New Marshalls store in Langford brings boost to women in need

Retailer will hold opening ceremony in Millstream Village March 9

A health worker holds a vial of AstraZeneca vaccine to be administered to members of the police at a COVID-19 vaccination center in Mainz, Germany, Thursday, Feb. 25, 2021. The federal state of Rhineland-Palatinate, start with the vaccination of police officers in internal police vaccination centers. (Andreas Arnold/dpa via AP)
B.C. officials to unveil new details of COVID vaccination plan Monday

Seniors and health-care workers who haven’t gotten their shot are next on the list

A cross-country skier glides along the banks of the Ottawa River in Ottawa on Thursday, Feb. 25, 2021. Canadians across the country can look forward to a mild spring peppered with the odd winter flashback throughout the first part of the season, according to predictions from one prominent national forecaster. THE CANADIAN PRESS/Sean Kilpatrick
Mild spring with some wintry blasts predicted for most of Canada: Weather Network

Weather Network is forecasting a slower than average start to spring in British Columbia

AstraZeneca’s vaccines are ready for use at the vaccination center in Apolda, Germany, Sunday, Feb.28, 2021. (Michael Reichel/dpa via AP)
Feds hoping for AstraZeneca shots this week as Pfizer-BioNTech prepare next delivery

The first of those doses could start to arrive in Canada as early as Wednesday

A boat caught fire in Ladysmith Harbour on Saturday morning. (Photo submitted)
Search underway for missing woman after boat catches fire in Ladysmith harbour

A large boat caught fire on the morning of Saturday, Feb. 27

Lone orca from a pod that made its way north from Georgia Strait and into Discovery Passage on Saturday, Feb. 27, 2021. Photo by Ella Smiley/<a href="https://www.facebook.com/Comoxvalleywildlifesightings/?ref=page_internal" target="_blank">Comox Valley Wildlife Sightings </a>
Island wildlife viewers thrilled by close view of passing Orca pod

Group gives wildlife photographers a classic opportunity to view them off Campbell River shoreline

An investigation is underway after a man was shot and killed by Tofino RCMP in Opitsaht. (Black Press Media file photo)
Man shot and killed by RCMP near Tofino, police watchdog investigating

Investigation underway by Independent Investigations Office of British Columbia.

B.C. Supreme Court in Vancouver on Tuesday December 11, 2018. THE CANADIAN PRESS/Darryl Dyck
B.C.’s compromise on in-person worship at three churches called ‘absolutely unacceptable’

Would allow outdoor services of 25 or less by Langley, Abbotsford and Chilliwack churches

Baldy Mountain Resort was shut down on Saturday after a fatal workplace accident. (Baldy Mountain picture)

Most Read