By Nivedita Balu and Pritam Biswas
TORONTO (Reuters) -Shares of Manulife hit a record high on Thursday after the Canadian insurer unveiled a new strategy to invest in Asia, capture market share in major economies and diversify at a time of global economic uncertainty.
Manulife has freed up capital through reinsurance deals since 2023 that allowed the company to transfer risk and make room for share buybacks and investments. It now plans to capture share in India’s insurance market through a joint venture with Mahindra and Mahindra. In September, Manulife also reached a deal to buy UK asset manager Schroders’ business in Indonesia.
The plan is also one of the first moves by CEO Phil Witherington, who took charge in May and headed the Asia segment for nearly four years in his prior role.
INDIA ‘STANDS OUT AMONG MEGA ECONOMIES’
“When we look at the mega economies of the world, US, China and India are the three that really stand out. And we’ve got presence in the US. We’ve got presence in China, and now we’re going to have presence in life insurance and asset management in India,” CFO Colin Simpson said in an interview.
“We definitely are not taking a position on what countries are a relative winner or a loser… It’s just when we look back at the situation globally, it’s important to be diversified, and that adds to stability.”
Witherington on a conference call noted that the regulatory environment in India has moved favorably while there has been an increase in wealth across the India population, creating insurance needs.
RBC Securities analyst Darko Mihelic said the investments in India and Indonesia “seem to make sense on the surface.”
Manulife also beat analysts’ quarterly profit estimates, boosted by strong business in Asia and Canada.
SHARES HIT RECORD HIGH
Manulife’s shares rose as much as 3.3% to hit a record high of C$49.82 in Toronto. They have risen 9.2% so far this year while those of peer Sun Life have fallen about 3% as it faces challenges in its dental business in the United States.
Sun Life is also looking to build scale through bolt-on acquisitions. The company has already signed bancassurance deals in Indonesia, Hong Kong and Vietnam.
“We are looking at deployment of capital in M&A … and that’s going to be primarily focused on bolt-on type acquisitions in Asia and in asset management, because those are the places that we see the most opportunity today.” CEO Kevin Strain said in an interview earlier this month.
(Reporting by Nivedita Balu in Toronto; Editing by Conor Humphries)
