TORONTO (Reuters) - Manulife Financial Corp (MFC.TO: Quote, Profile, Research) profit fell 12 percent in the first quarter due to declines in global stock markets, the insurance company said on Thursday.

It also announced that President and Chief Executive Dominic D'Alessandro will step down next year, at which time he will be 62 and will have led North America's second-largest life insurer for 15 years.

Shares of Manulife were down 4.9 percent at C$36.98 on the Toronto Stock Exchange late Thursday afternoon as the results fell short of analyst expectations.

"The quarter was disappointing, highlighted by greater sensitivity to equity markets than we expected," RBC Capital Markets analyst Andre-Philippe Hardy said in a note to clients.

At the company's annual meeting in Toronto, D'Alessandro said that part of the C$265 million noncash charge that was taken in the quarter because of tumbling global equity markets could be reversed as stock markets improve.

"Should markets recover, the reserve adjustment will be reversed," he told shareholders.

"All other aspects of our business remain highly satisfactory."

Manulife earned C$869 million ($855 million), or 57 Canadian cents a share, in the three months ended March 31.

That compares with a profit of C$986 million, or 63 Canadian cents a share, in the same 2007 period.