(May 1- 09:40 ET) – Manulife Financial Corp. is reporting improved first quarter earnings, thanks to strong growth in its insurance operations and favourable claims experience.

The firm saw first quarter net income reach $270 million, up 19% over 2000. Earnings per share rose to 56¢ from 47¢ in 2000. Return on shareholders’ equity for the quarter was 15.0%, up from 14.3% in 2000.

Premiums and deposits for the quarter totaled $6.4 billion, down a little from the year ago level of $6.5 billion. The company blames slowed sales in the North American wealth management businesses and its own reduction in single premium sales in Japan. Funds under management increased to $124.2 billion at March 31, 2001, from $118.9 billion at March 31, 2000. Fees and other revenue increased by 19% over the corresponding period in 2000.

“I’m pleased to report that the strong performance of 2000 continued into the first quarter of this year,” said Dominic D’Alessandro, president and CEO of Manulife. “The improved results are particularly gratifying given the generally difficult market conditions that prevailed during the period. The outlook for the remainder of the year remains positive.”

“We are committed to meeting the 15% targets for return on equity and growth in earnings per share,” added D’Alessandro. “We expect that the three acquisitions that closed on April 2, 2001 will contribute to the achievement of our financial goals.”

The firm says that tough markets made for a challenging sales environment. Manulife demonstrated the value of geographical diversity, offsetting a decline in its Canadian sales with strong results in the United States and Asia. In wealth management, the pension businesses in both the U.S. and Canada experienced increased sales, while volatile equity markets resulted in offsetting declines in variable annuity sales in the U.S. and in individual wealth management products in Canada.

In Canada, Group Pensions’ sales were up 25%. Individual Wealth Management new business volumes were down 31%. The Canadian division’s net income increased by 23% to $73 million, compared to $59 million in the first quarter of 2000. The increased earnings were driven by higher margins on Individual Wealth Management products; particularly the redesigned and repriced segregated fund product and strong growth in the Group Benefits inforce block.

Better claims experience and improved new business margins in Individual Insurance contributed to the increase in net income. First quarter premiums and deposits were down 6% to $1.4 billion. Funds under management decreased marginally to $31 billion from $31.3 billion.

Manulife’s board has approved a quarterly shareholders’ dividend of 12¢ a share, payable on or after June 19 to shareholders of record at the close of business on May 15.