Canada’s Manulife Says Japan Exposure ‘Less than $153 Million’

March 16, 2011

Manulife Financial said Monday the impact of the earthquake and tsunami in Japan should be less than C$150 million (US$152.93 million), after investors sold the shares off by 3.5 percent on concerns about the insurer’s exposure to the disaster.

Manulife, which is Canada’s biggest life insurer, said in a statement that the earnings hit would be due to property and casualty reinsurance claims.

The Toronto-based company has a substantial Asian insurance and wealth management presence. It had insurance sales of $563 million in Japan in 2010, according to financial statements.

It also said it had confirmed the safety of all of its employees and agents in the country.

The company’s stock fell 3.5 percent to C$16.74 [US$17.066) during the session, making it the weakest financial issue on the Toronto Stock Exchange. It fell just over 1 percent Friday.

CIBC World Markets analyst Robert Sedran said in an email the situation in Japan was having an impact on the stock, as Manulife is the only Canadian insurer with direct exposure to the country.

Sedran also said that the insurer was facing pressure from weaker share prices and bond yields, which lower actuarial projections on Manulife’s portfolio of investments and force the company to hold more funds in reserve for future obligations.

The Toronto Stock Exchange’s S&P/TSX composite index ended the session down 0.4 percent, recovering late from a steeper drop, on the back of worries about the impact of the situation in Japan.

The Canadian ten-year bond also eased Monday

Sun Life Financial spokesman Frank Switzer said the company, Canada’s No. 3 insurer, had no exposure to the crisis. Sun Life slid 0.5 percent to C$30.16 [US$30.75]

(Reporting by Cameron French; editing by Rob Wilson)

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