Manulife Financial Corp. today reported a drop in first-quarter profit as a result of declines in global stock markets.

The insurer said net income for the three months ended March fell 11.9% to $869 million, or 57¢ a share.

That compares with profit of $986 million, or 63¢ a share, in the same 2007 period.

Manulife also announced that president and CEO Dominic D’Alessandro will step down in May 2009.

The company said it expects to announce his successor by the end of this year.

Manulife said the sharp declines in global equity markets, particularly in the U.S. and Asia, reduced reported earnings in the quarter by $265 million, or 18¢ per share.

Return on common shareholders’ equity was 15.1% in the first quarter of 2008, compared to 16.1% in 2007.

“Except for the decline in equity markets, our quarter was highly satisfactory”, stated D’Alessandro, in a release. “Strong sales levels, particularly in our insurance segments, contributed to an impressive increase in new business embedded value. This reflects positively on the current performance of our insurance and wealth management businesses, and positions us well for future earnings growth.”

Premiums and deposits amounted to $17.8 billion in the first quarter of 2008. On a constant currency basis, and excluding the large case premium booked in 2007, premiums and deposits grew 12% over the first quarter of 2007, driven by robust sales and growth in recurring premiums and deposits.

Manulife said new business embedded value in the first quarter of 2008 was $590 million, up 35% compared to a year ago, with both insurance and variable annuity businesses contributing to thestrong result.

Total funds under management as at March 31, 2008 were $400.1 billion, an increase of 2% over last year on a constant currency basis. Growth in funds under management was also affected by exceptionally poor equity markets in the first quarter of 2008, where U.S. markets declined 10% and Asian markets were down 18%.