Insurers are reporting significant drops in first-quarter earnings as a result of the pandemic and market volatility.
On Wednesday, Winnipeg-based Great-West Lifeco Inc. reported net earnings attributable to common shareholders of $342 million for the first quarter of 2020, or $0.37 earnings per share.
The result represents a 48% decrease from the same quarter last year, when earnings were $657 million, or $0.67 earnings per share.
The drop was primarily due to about $300 million of market-related impacts and unfavourable basis changes, the firm said in its quarterly report to shareholders.
The company’s base earnings for the quarter, which excluded market-related impacts and other items, totalled $543 million or $0.59 per share, down from $569 million or $0.58 per share a year ago when it had more shares outstanding.
Analysts on average had expected an adjusted profit of $0.59 per share for the quarter, according to financial markets data firm Refinitiv.
Within Great-West Lifeco’s Canada segment of operations, sales were up 14% in the quarter year over year, to $3.6 billion. The increase was due mostly to higher sales in segregated funds, third-party mutual funds and individual insurance sales, the insurer said.
On Thursday, Quebec City–based IA Financial Group reported net earnings attributable to common shareholders of $39.1 million, compared with $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 of 2019 — a decrease of 74% year over year.
The insurer had assets under administration of $175.7 billion at March 31, 2020, compared with $189.5 billion in the previous quarter. The 7% decrease was primarily due to the drop in equities markets, the firm said.
Despite the declines, the insurer had strong sales, with a 19% increase in premiums and deposits year over year, or more than $3.5 billion.