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Manulife's Q2 net income halved as insurer struggles with impacts of COVID-19


TORONTO — Manulife Financial Inc.'s chief executive says COVID-19 had a "significant" impact on the company's second-quarter performance, but he's confident it will bounce back.

Roy Gori told analysts Thursday that the pandemic negatively impacted sales and investments generated lower-than-expected returns as several countries the Toronto-based insurer operates in shut down to stop the spread of the novel coronavirus.

"The coronavirus continues to disrupt economies and capital markets worldwide," Gori said in pre-taped remarks that opened the company's quarterly call.

"Our operating conditions during the quarter were understandably effected."

His remarks come a day after Manulife said COVID-19 hampered the company's second quarter to the point where its net income dropped to half of what it was during the same period last year.

The insurer said its net income attributable to shareholders for the period ended June 30 was $727 million, just under half of the $1.47 billion it earned in the second quarter of 2019.

Manulife's diluted earnings per common share reached 35 cents for the period, a fall from 73 cents a year ago but more than the eight cents per share analysts had expected.

The quarter, however, had some upsides.

Gori said he was pleased with Manulife's efforts to launch a chatbot, offer e-applications for life insurance and begin non-face-to-face processes for sales in Asia amid the pandemic.

He also shared that the company had extended premium grace periods on several insurance products, launched a credit card deferral program and mortgage payment deferrals of up to six months.

How the pandemic will continue to impact Manulife and the economy, however, is a question mark, he said.

"It is still way too early to declare what the long-term consequences of COVID are and there are still way too many unknowns," he said.

"I expect there is going to be a lot of uncertainty and volatility until we see an at-scale deployment of a vaccine and even then there are questions around how effective that vaccine will be."

Manulife's shares gains 84 cents or nearly 4.5 per cent at $19.67 in morning trading on the Toronto Stock Exchange.

This report by The Canadian Press was first published Aug. 6, 2020.

Companies in this story: (TSX:MFC)

Tara Deschamps, The Canadian Press

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