Strong bancassurance sales in Asia offset weakness from US group dental contract termination
Record underlying net income in Asia helped Sun Life Financial Inc. deliver an 11 percent profit increase in the second quarter, even as an impairment charge from the early termination of a US group dental contract pulled down results.
The Toronto-based insurer posted net income of $716m for the quarter ended June 30, up from $646m a year earlier.
Earnings came to $1.26 per share, compared with $1.11 last year, falling short of the $1.80 per share expected by analysts, according to LSEG Data & Analytics.
Underlying earnings per share rose to $1.79 from $1.72 in the same period of 2024.
President and CEO Kevin Strain said the quarter reflected strong protection business growth, higher wealth management and investment earnings, and a 15 percent increase in bancassurance sales in markets including Hong Kong, India, and the Philippines.
He added that the company’s LICAT ratio stood at 151 percent, supporting its ability to invest and grow, and noted that nearly $400m in shares were repurchased during the quarter.
Underlying net income was $1.02bn, up 2 percent year over year.
By business segment, asset management and wealth income held steady at $455m; group health and protection income increased 7 percent to $326m; individual protection income fell 10 percent to $299m; and corporate expenses recorded a net loss of $65m, an improvement of 29 percent.
Reported return on equity was 12.4 percent, compared with 11.7 percent last year, while underlying return on equity was 17.6 percent, down from 18.1 percent.
Assets under management reached $1.54tn at the end of the quarter, a 5 percent increase from last year.
In Asia, underlying net income rose 15 percent to $206m, while reported net income fell 35 percent to $98m on market impacts. Individual protection sales in the region grew 24 percent to $727m.
In Canada, underlying net income declined 6 percent to $379m, while reported net income rose 13 percent to $330m, supported by favourable equity market and interest rate impacts.
Group health and protection sales increased 41 percent to $201m, while individual protection sales fell 19 percent to $136m.
In the US, Sun Life’s underlying net income decreased 4 percent to $195m, while reported net income dropped 19 percent to $103m, mainly due to the impairment charge. Group sales fell 6 percent to $313m.
