(Reuters) - Canada's Manulife Financial (NYSE:MFC) reported better than expected quarterly profit on Wednesday, powered by a 40% rise in earnings from Asia, a region the insurer is betting on for growth.
The Asia business, which includes operations in 12 markets and over a 100 bank partnerships, is among the biggest income generators for the insurer. It competes there with Canadian peer Sun Life.
Manulife held its investor conference is Hong Kong and Jakarta in June to assure investors of its focus on Asia, a market it has been operating in since 1897.
At the June conference, it pushed back its target for half of its earnings to be generated in the segment to 2027 from 2025 due to the pandemic.
As a part of its transformation toward a higher return and lower risk business, Manulife has said it expects higher return on equity than previously recorded by 2027 and expects to generate more than C$22 billion of cash in the same time period.
"The move to low risk and higher returns, in part means things like reinsuring more of our business... on top of that we've been growing in the asset management business, that's a great high return businesses," Chief Financial Officer Colin Simpson said in an interview.
The company boosted sales in Japan and Hong Kong. In Canada, sales growth was led by group insurance for large clients.
"That's the benefit of having a diversified Asian portfolio... this quarter, really it was Japan stealing the limelight," Simpson said, noting annual premium-equivalent (APE) sales in Japan rose 93%.
APE sales rose 17% in the quarter, powered by a 61% jump in Manulife's Canada business and a 7% increase in its Asia unit. APE is a key sales metric used by life insurance companies.
Core earnings rose to C$1.74 billion ($1.26 billion), or 91 Canadian cents per share, in the three months ended June 30, from C$1.64 billion, or 83 Canadian cents per share, a year earlier.
Analysts were expecting 88 Canadian cents per share, according to LSEG data.
Manulife shares have jumped 13.4% so far this year, compared with a 5.8% fall for smaller peer Sun Life, which is slated to report results next week. Toronto's main index has gained 4.9%.
($1 = 1.3758 Canadian dollars)
(This story has been corrected to rectify year to 1897 instead of 1987, in paragraph 3)