Manulife Financial Corp (NYSE:MFC) stock rose 4.45% (As on November 10, 10:54:10 AM UTC-4, Source: Google Finance) after the company reported a drop in third-quarter profit, as escalating worries of an economic downturn impaired earnings from its wealth and asset management unit. Canada’s largest insurer reported core earnings of C$1.32 billion ($975.83 million), in the three months ended Sept. 30, compared with C$1.52 billion, a year earlier. The company says on the insurance side, it took at $256 million charge related to Hurricane Ian, compared with $152 million for charges a year earlier related to Hurricane Ida and European floods. It says new business value dropped in Asia as it saw lower sales in Hong Kong, while Canada and the U.S. saw gains driven by higher margins. Manulife says on the investments side it benefited from fixed income reinvestment activities, but took a hit on lower returns and writedowns on real estate-related holdings, while profits were also affected by declines in the stock market. As a result, core earnings in Canada rose 13% to C$350 million.

Manulife has faced a difficult macroeconomic environment in recent quarters, with measures intended to fight Covid-19 hurting its Asia business and plunging equity markets weighing on the wealth- and asset-management unit. Annualized premium equivalent sales in Asia fell 8.2% to C$854 million, hurt by lower sales in Hong Kong, which only recently began lifting Covid-related restrictions.

MFC in the third quarter of FY 22 has reported the adjusted earnings per share of 67 cents, missing the analysts’ estimates for the adjusted earnings per share of 68 cents, according to analysts in a Bloomberg survey.

Moreover, in Asia, New business value (“NBV”) decreased 17% from 3Q21 reflecting lower sales in Hong Kong and changes in product mix in Asia Other1, partially offset by higher individual protection and other wealth sales in Japan. In Canada, NBV increased 25% from 3Q21, driven by higher margins in our insurance businesses, partially offset by lower volumes in Annuities. In the U.S., NBV increased 27% from 3Q21, driven by improved margins due to pricing actions, higher interest rates and changes in product mix. Further, net inflows in Retirement were $1.4 billion in 3Q22 compared with net inflows of $0.6 billion in 3Q21, driven by growth in member contributions and lower plan redemptions. Net inflows in Retail were $1.0 billion in 3Q22 compared with net inflows of $7.9 billion in 3Q21, reflecting lower gross flows and higher mutual fund redemption rates due to decreased investor demand amid equity market declines and higher interest rates.