Manulife Financial Corporation (NYSE:MFC) Q4 2022 Earnings Call Transcript

Roy Gori: I might just add a couple of points. ’22 was a challenging year for Asia, specifically as it relates to COVID with the restrictions that Damien referenced and referred to. And we saw in North America, Canada and the U.S., actually more of a normalization, a return to normal from a sales perspective as it relates to COVID. There are clearly still some lingering impacts. But we had really strong growth from a sales perspective in North America with 25% and 18% NBV growth, respectively. But dial back to ’21, it was almost the opposite. In ’21, we saw North America — really significantly negatively impacted by COVID restrictions. And Asia actually did quite well there. So we did see the balance of our portfolio actually whether those environments quite well, and that was the strength of our diversity.

And again, as we look to ’23, we’re actually quite optimistic, notwithstanding the comments that Damien mentioned around will take some time for that Zero COVID policy to really transition and unfold. But we’re feeling quite optimistic about ’23 being a year where we will see more of a return to normalization specifically as it relates to COVID restrictions and the impact on sentiment and therefore, on sales.

Nigel D’Souza : Okay. That’s a very helpful answer. And my second question was on your LICAT sensitivity. When I look at your interest rate sensitivity disclosure, the dollar amount from a 50-basis-point increase is the same, but the percentage-point impact went down to 2 percentage points. I assume that’s rounding. But I wanted to get a sense of the complexity of that portfolio. Is there a level of rates where the percentage point impact could fall to 1%? And does any of the interest rate sensitivity change under IFRS 17?

Steven Finch: Yes. Thanks, Nigel. It’s Steve. And you got that right, that what we’ve seen is some complexity here. As rates have risen, we’ve seen less sensitivity in the LICAT ratio under IFRS 4. And that same phenomenon will be there under IFRS 17. But as Phil pointed out earlier, overall, the LICAT ratio under IFRS 17 will be less sensitive to interest rates, which we view as a positive. It increases the stability. So we’ll see that sensitivity drop further under IFRS 17. Thanks.

Operator: There are no further questions registered at this time. I’d like to turn the call back over to you, Mr. Ko.

Hung Ko : Thank you, operator. We’ll be available after the call if there are any follow-up questions. Have a good day, everyone.

Operator: Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.