RBC advances wealth management, but insurance declines

RBC Financial Group Insurance has not declined since the fourth quarter of 2020.

Financial institutions have reported net income of $ 4.1 billion (B $) for all activities in the first quarter of 2022 from November 1, 2021 to January 31, 2022. The result is 6.4%, or $ 248 million (M $) from the $ 3.8 billion net income reported in the first quarter of 2021.

“Our results reflect the earnings growth rates of individual and commercial banks and wealth management, but were partially offset by sluggish capital markets, investor and financial services and insurance performance.” RBC says.

Wealth management

Therefore, the Wealth Management Division’s RBC reports net income of $ 795 million in the first quarter of 2022, compared to $ 641 million in the first quarter of 2021. This increased by 24% or $ 154 million, primarily due to an increase in average fees. “Base client assets,” said RBC.

“Partial reversal of legal reserves set for the sector Wealth Management-United States (include City National) The increase in net interest income from the previous quarter and average volume growth contributed more than offsetting the narrowing of spreads.

“These factors were partially offset by higher variable compensation and higher labor costs. »»

guarantee

For the insurance business, RBC reports net income of $ 197 million in the first quarter of 2022, compared to $ 201 million in the first quarter of 2021. Decrease in new longevity risk reinsurance contracts. “

“These factors have been mitigated by expanding our business and improving our investment-related experience. »»

Insurance income

RBC insurance revenue was $ 1.4 billion in the first quarter of 2022, compared to $ 1.8 billion in the first quarter of 2021. This decreased by 22.7% or $ 410 million, primarily due to changes in the fair value of investments that support debt. Under insurance contracts, compensation, claims and acquisition costs associated with insurance contracts are largely offset, “RBC said.

“This factor was partially offset by increased group pension sales and increased activity,” said financial institutions.

Specifically, in Canada, insurance revenues in the first quarter of 2022 reached $ 963 million, compared to $ 1.2 billion in the first quarter of 2021. That’s a 40.1% decrease, or $ 464 million.

Internationally, insurance revenues reached $ 706 million in the first quarter of 2022, compared to $ 652 million in the first quarter of 2021. They increased by 8.3% or $ 54 million.

Compensation, billing and costs

Insurance contract coverage, claims and acquisition costs decreased by 29.1% or $ 409 million from $ 1.4 billion in the first quarter of 2021 to $ 997 million in the first quarter of 2022.

This is primarily due to “variations in the fair value of the investment that underpin the obligations of the insurance policy, which significantly offsets the return,” RBC said. “The increase in favorable investment-related loss experiences also emphasized this decrease,” financial institutions added.

“These factors are partially offset primarily by the impact of increased group annuity sales in our life insurance products, business expansion, overall claim experience, and the longevity risk of new reinsurance. »» »

Insurance premiums and deposits

RBC premiums and deposits were $ 1.8 billion in the first quarter of 2022, compared to $ 1.4 billion in the first quarter of 2021. That’s an increase of 25.6%, or $ 370 million.

Specifically, in Canada, premiums and deposits reached $ 1.2 billion in the first quarter of 2022, compared to $ 816 million in the first quarter of 2021. These increased by 42.8% or $ 349 million.

Internationally, premiums and deposits reached $ 649 million in the first quarter of 2022, compared to $ 628 million in the first quarter of 2021. Increased by 3.3% or $ 21 million.