The Canadian Press

Manulife Financial Corp. (TSX:MFC) slid to a loss in the third quarter as lower corporate bond rates pulled down profits and it logged charges related to its actuarial assumptions.

The Toronto-based insurance giant said Thursday it booked a loss of $172 million, or 12¢ per share, down from year-earlier profits of $510 million or 33¢ per share.

The results were affected by a $1.1-billion pretax charge, worth $783 million after taxes, on changes in actuarial assumptions used to value its policy liabilities.

Manulife was expected to earn 27¢ per share excluding the one-time items, according to analyst estimates from Thomson Reuters.

Adjusted earnings from operations were $803 million in the quarter, which was in line with a forward-looking estimate the company issued in August.

In morning trading, Manulife shares lost 4%, or 87¢, to $19.72 on the Toronto Stock Exchange. The company’s stock has a 52-week high of $27.06 and low of $9.02.

“Continued declines in corporate bond rates required a further strengthening of actuarial reserves this quarter,” chief financial officer Michael Bell said in a release.

“We also increased reserves for changes in actuarial assumptions including those related to policyholder behaviour for variable annuity products. As a result of the decline in interest rates and changes in lapse assumptions, our interest rate sensitivity has increased.”

Total revenue climbed to $13.8 billion from $5.8 billion a year earlier.

In the quarter, Manulife “took actions to improve margins, increased our sales of products other than variable annuities, further improved our equity risk profile and continued to build toward fortress capital levels,” said chief executive Donald Guloien.

“We remain highly disciplined and will continue to build upon Manulife’s scale and key strengths including our superior asset quality, well recognized brands, leading products and distribution, excellence in investment management, and strong positioning in key growth markets.”

In Thursday trading on the TSX, Manulife shares fell 91¢, or 4.4%, to $19.68 on a volume of 4.6 million shares on the TSX.