Manulife profit halved to $510-million
Globe and Mail Update
November 6, 2008 at 9:13 AM EST
Manulife Financial Corp. said Thursday that it earned $510-million in the third-quarter, compared to $1.07-billion a year ago, and it has signed a credit agreement to help boost its capital levels.
The insurance giant has been struggling with exposure to volatile equity markets, and revealed last month that it expected profits to be hit by roughly $250-million in credit losses this quarter.
On Thursday it said it has signed an agreement with Canada's big six banks for a five-year term loan of $3-billion, which will be fully drawn down by Nov. 20 and will be deployed as necessary to provide additional regulatory capital to the insurer's operating subsidiaries.
Manulife and its rivals received some relief recently from the Office of the Superintendent of Financial Institutions, which regulates the country's banks and insurers. It fast-tracked new rules giving insurers more leeway in the amount of capital they must put aside for their segregated funds business. In a move that was seen to be most beneficial to Manulife, the regulator decided that insurers should not have to sock away as much money now for payments that they have promised customers many years down the road.
Manulife has been putting aside money to compensate for a potential future shortfall in the amount of money it owes its variable annuity and segregated funds clients. But most of the payments aren't due until between seven and 30 years from now, and the firm is hoping that rebounding stock markets will erase the shortfall long before then.The company had total invested assets of $165-billion as of the end of September.
Thursday, November 6, 2008
Posted by Fillibluster at 10:51 AM