LTCI sales rise at John Hancock

If the unit had not subtracted $519 million from the subtotal for other forms of revenue, it could have reported $667 million in net income for the quarter.

But company representatives say that, in the real world, that, if the interest shifts that drove the mark-to-market loss did not exist, and the $519 million negative figure disappeared from the financial statements, the mark-to-market value of insurance liability reserves would increase.

In that scenario, an increase in total expenses would likely offset much of the increase in revenue, and net income would be comparable to the figure that was just reported, company representatives say.

Although the paper value of LTC unit assets fell, the paper value of the insurance obligations fell more, and portfolio performance was such that the unit’s ability to meet obligations improved, company representatives say.

Clarification: An earlier version of this story gave an incomplete description of the mark-to-market investment experience item in the LTC unit’s financial statement. The item has an inverse relationship with an expense item that usually offsets most or all of its impact on earnings.

See also:

• Genworth taps ex-Hancock exec to lead life unit
• Manulife plays the LTCI rate game
• Michael Doughty to lead John Hancock LTCI unit