Insurers are reporting a significant drop in first-quarter profits as a result of the pandemic and market volatility.
On Wednesday, Great-West Lifeco Inc. based in Winnipeg, announced net income attributable to common shareholders of $342 million for the first quarter of 2020, representing net earnings per share of $0.37.
The result represents a decline of 48% compared to the same quarter last year, when earnings were $657 million, or $0.67 per share.
The decline was primarily due to market impact of approximately $300 million and unfavorable underlying changes, the company said in its quarterly report report to shareholders.
The company’s basic earnings for the quarter, excluding market impacts and other items, were $543 million, or $0.59 per share, compared with $569 million, or $0.58 per share, a year ago, when the company had more shares in trade.
Analysts on average expected adjusted earnings per share of $0.59 for the quarter, according to financial markets data firm Refinitiv.
For Great-West Lifeco’s Canada business, sales increased 14% in the quarter year-over-year to $3.6 billion. The increase resulted mainly from higher sales of separated funds, investment funds of external entities and sales of individual insurance, the insurer said.
Quebec City-based IA Financial Group on Thursday reportednet income attributable to common shareholders was $39.1 million compared to $151.1 million in the first quarter of 2019.
Diluted earnings per share were $0.36 in the first quarter compared to $1.40 in the same quarter in 2019, a 74% year-over-year decline.
As of March 31, 2020, the insurer had $175.7 billion in assets under management, up from $189.5 billion in the prior quarter. According to the company, the 7% decline was mainly due to the decline in stock markets.
Despite the declines, the insurer reported strong sales, reporting a 19% year-over-year increase in premiums and deposits, or more than $3.5 billion.
