TORONTO — Stung by volatile capital markets in the past, Manulife Financial Corp. (TSX:MFC) says strong stock markets helped push it toward a record profit of $1.79 billion in the most recent period even as it ramped up a program to distance itself from investment risks.
“We’re seeing solid progress on all fronts,” CEO Donald Guloien said on a conference call Thursday to discuss Manulife’s fourth- quarter results, adding that the company is ahead of schedule in its plan to reduce exposure to market volatility.
“We took advantage of rising equity markets and interest rates to increase our hedging of both equity and interest rate risks,” he said. “Through hedging of all types, we have now hedged 50 per cent of our equity sensitivity, up from 25 per cent at the end of the third quarter 2010.”
Canada’s largest insurer plans to have 60 per cent of its earnings sensitivity to equity market movements hedged by the end of 2012 and about 75 per cent by the end of 2014.
The company has come under fire from shareholders to turn around its finances since the recession pummelled stock markets.