Manulife Financial Corporation (MFC) expects the impact of the property & casualty reinsurance claims associated with last week’s earthquake and tsunami in Japan to remain within C$150 million after tax ($154 million).
Manulife, the leading life insurer in Canada, has significant insurance and wealth management business platforms in Asia. Japan insurance sales for full year 2010 were $563 million, which marked a 72% growth over 2009, with fourth quarter results more than doubling the results for the same period in 2009.
Manulife announced that it has confirmed the safety of all its employees and agents in Japan. In addition, all systems, networks and operations are functioning, ensuring undisrupted customer service.
The company’s stock price plunged following the disaster on concerns of its exposure to the destruction that ensued. Besides Manulife, the other insurers who have exposure to the Japan’s disaster are Prudential Financial Inc. (PRU) and Aflac Inc. (AFL). Prices of these stocks were also impacted by concerns over their exposure to the market.
The massive 9.0 magnitude earthquake that hit the Pacific Ocean nearby Northeastern Japan caused damage with blackouts, fire and tsunami. Both the earthquake and the resultant tsunami ended up in countless casualties. The radiation leak from the nuclear-reactors remains a significant concern.
Claims such as that of death are imminent. Other medical claims would also unfold in the coming days and finally can be a drag on the profitability of the companies having significant exposure to the regions affected.
Manulife currently has a Zacks #4 Rank (short-term Sell rating) indicating the likelihood of downward pressure on the shares over the near term.