RBC Capital believes the fourth quarter will be a mostly positive end to a decent year for the Canadian life insurance industry.
Analyst Darko Mihelic is making small tweaks across its lifeco models. Core EPS estimates increase 0.5% on average, reflecting an average ~3% QoQ decline but ~8% YoY increase for the group. RBC's tracked funds suggest that average retail AUM growth will be mixed across the group. For retail flows, Mihelic is expecting Manulife and Sun Life to have net outflows while IAG will have small net inflows.
"We think macro was on balance helpful for lifecos and so reported figures might look better than our estimates as it is difficult to capture all of the moving pieces," notes analyst Darko Mihelic.
The Canadian lifecos begin reporting fourth-quarter results on Feb 5.
Great West Life is rated Sector Perform, with a $51 target.
iA Financial is rated Sector Perform, with a $137 target.
Manulife is rated Outperform, with a $49 target.
Sun Life Financial is rated Outperform, with am $82 target.
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