Sun Life Assets Under Management Drive Q3 Earnings Growth - Analyst Blog

Sun Life Financial Inc. (SLF) reported third-quarter operating net income from continuing operations of $429.2 million (C$467 million), up 10.7% year over year. 

 

Results reflect higher income contribution from Canada, MFS and Asia, with growth in assets under management. 

 

Net premium revenue at Sun Life was $2.5 billion (C$2.7 billion), up 11.9% year over year.

 

Adjusted revenues (adjusted for premiums and deposits for the impact of constant currency adjustment, and reinsurance in SLF Canada's GB operations adjustment) came in at $5.6 billion (C$6.1 billion), up 8% year over year. The increase was led by higher net premium revenue in SLF Canada and fee income in MFS, partially offset by lower net premium revenue in SLF U.S. and SLF U.K. 

 

Total company wealth sales were $23.3 billion (C$25.7 billion) in the reported quarter, down 14.3% year over year.

 

Sun Life's life and health sales were $387.9 million (C$422 million), up 9.3% year over year.

 

Segment Results

 

During the quarter, SLF Canada reported operating income of $219.7 million (C$239 million), up 11% year over year, primarily led by higher contribution from group retirement services. 

 

SLF U.S. Operating net loss was $3 million in the third quarter of 2014 compared to operating net income of $101 million in the third quarter of 2013.

 

MFS Investment Management reported operating net income of $154.4 million (C$168 million) in the third quarter, up 40% year over year.

 

SLF Asia reported operating income of $46.9 million (C$51.0 million), up more than 2.5 times year over year.    

 

Assets under management were up 18% year over year to $625.6 billion (C$698 billion) due to favorable markets, stronger sales and the positive impact of currency movements. 

 

Sun Life Assurance's MCCSR ratio was 218% as of Sep 30, 2014 compared with 219% as of Dec 31, 2013. 

 

Sun Life Financial recorded operating return on equity (ROE) of 11.9% in the quarter under review compared to operating ROE of 12.6%.

 

Sun Life Financial presently carries a Zacks Rank #3 (Hold). 

 

Performance of Other Insurance Stocks 

 

Other life insurance players like Protective Life Corp. (PL), MetLife Inc. (MET) and  Lincoln National Corporation (LNC) reported favorable third-quarter earnings, with a respective increase of 36%, 19.4.% and 16.4% year over year.