Strong fee income helped power a couple of the large life insurers — Great-West Lifeco Inc. and Manulife Financial Corp. — to better-than-expected second-quarter results, Moody’s Investors Service reports.

The rating agency said Great-West exceeded expectations in the quarter with $1 billion in net earnings attributable to shareholders, which was double the $498 million it posted in the same quarter a year earlier.  

“Overall, the credit-positive results reflect strong business fundamentals in the U.S. and Canada, and exceeded our expectations, with [Great-West] well-positioned to weather a weakening global macroeconomic environment,” Moody’s said. 

“The increase in net earnings mainly was due to improved market experience from interest rate movements and improved investment returns on non-fixed-income assets,” it said. Lower restructuring expenses also bolstered earnings.

Moody’s noted that Manulife also reported net income of $1.04 billion for the second quarter, which was in line with the same quarter in 2023.

Core earnings were up 6% year over year, it said, “primarily driven by higher fee income in global wealth and asset management as well as an improved net insurance experience in Canada and Asia.”

“Overall, these credit positive results were higher than our expectations, and reflect the strength of [Manulife’s] diversified business, with continued earnings momentum in Asia,” it said.

Moody’s noted that the Asia region generated 44% of Manulife’s earnings in the first half, which, it said, has the company on track to reach its goal of 50% by 2027.

In the wealth and asset management division, core earnings were up 25% in the quarter, Moody’s said, driven by stronger fee income from higher average assets under management and administration.