Manulife Financial Corp. swung to a loss for the fourth quarter ended Dec. 31, the company said Thursday.

It’s the first loss since Manulife became a public company in 1999.

The insurance giant said it lost $1.87 billion during the quarter, or $1.24 per share, compared with year-ago earnings of $1.14 billion or 75¢ a share.

The company reported an annualized negative return on equity of 28.6% in the quarter, compared with a positive return on equity of 20.5% the year before.

“Our results have been negatively impacted by the downturn in global equity markets, particularly in the fourth quarter,” said CEO Dominic D’Alessandro in a release.

The insurer issued a warning in December that it expected to report a fourth quarter loss of around $1.5 billion.

The quarterly results included $2.4 billion to bulk up the firm’s segregated fund guarantees.

There also were after-tax stock-market losses of $513 million, plus $128 million to cover credit impairments and downgrades.

Manulife said the sharp decline in global equity markets had led it to increase its balance sheet reserves to cover long-term segregated fund guarantees to $5.78 billion at the end of 2008 from $526 million at the end of 2007.

“Despite these very challenging conditions, our core businesses continue to maintain or increase market share and generated record levels of life insurance sales and new business embedded value in 2008,” D’Alessandro said.

Premiums and deposits for the quarter were $18.5 billion, up 6% from $17.4 billion a year earlier.

Manulife said its full-year earnings dropped to $517 million, down 88% from $4.3 billion in 2007.

Full-year earnings per share fell to 32¢ compared with $2.78 in 2007. Premiums and deposits edged up to $70 billion from $69.4 billion.

Funds under management stood at $404.5 billion at Dec. 31, up 2% from the close of 2007.

Manulife maintained its quarterly dividend at 26¢ a share.

IE