11:36 AM EDT, 07/31/2024 (MT Newswires) -- Canadian life insurers begin reporting second quarter results on Tuesday, August 6th.

National Bank analyst Gabriel Dechaine notes that lifecos are out/underperforming the market by 3% since the end of the first quarter reporting season. In general, he is forecasting a fairly noisy quarter, with a wider spread (~20%) anticipated between Reported and Core EPS, reflecting the positive impact from equity markets partially offsetting losses in real estate investments.

Core EPS should benefit from strong equity markets during the quarter, considering 30%+ of average lifeco earnings are linked to Wealth businesses. Beyond the quarter, Dechaine is still positive on the group overall, reflecting: 1) improving momentum in business lines that had been lagging, such as Asia for MFC & SLF; 2) strong capital positions across the group, with a relatively "lighter touch" regulatory backdrop compared to the Big-6 banks; 3) high teens ROEs; and 4) potential catalysts such as MFC's ongoing Legacy Disposition strategy.

Top picks in the space are IAG and MFC.

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