Sun Life Financial Inc. SLF reported second-quarter 2015 operating net income of $591 million (C$731 million), up 50% year over year.
The life insurer witnessed solid performance in its Canadian, U.S. and Asian business. Its asset management business continues to perform strongly.
Net premium and deposits were $30.5 billion (C$37.7 billion), up 12.4% 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) came in at $4.7 billion (C$6.01billion), up 2.4% year over year.
Total company wealth sales were $5.3 billion (C$6.6 billion), up 58% year over year.
Total company life and health sales were $346 million (C$427 million), up 8.1% year over year.
Segment Results
SLF Canada reported operating net income of $268 million (C$331 million), up 68% year over year. The improvement was driven by the better performing Group Benefits.
SLF U.S. operating net income was $108 million, up 17.4% year over year.
MFS Investment Management reported operating net income of $141 million, up 6% year over year.
SLF Asia reported operating income of $75.2 million (C$93 million), more than double year over year on weaker Canadian dollar. This was the ninth successive quarter of growth.
Financial Update
Assets under management were up 10% year over year to $654 billion (C$808.1 billion) as of Jun 30, 2015, on currency, market movements and continued business growth.
Sun Life Assurance's MCCSR ratio was 223% as of Jun 30, 2015 compared with 216% as of Mar 31, 2015.
Sun Life Financial operating return on equity improved to 16.5% from 12.6% in the year-ago quarter. Underlying ROE of 13.9% improved from 12.9% in the year-ago quarter.
Cash flow from operations was $461 million (CS570 million) in the quarter, down 23% year over year.
Net cash, cash equivalents and short-term securities at Jun 30 were $5.9 billion (C$7.3 billion), up 27% year over year.
Dividend Update
The board of directors of Sun Life Financial announced a quarterly dividend of 38 cents per share.
Business Update
During the quarter, Life Financial agreed to acquire Bentall Kennedy and Prime Advisors besides closing Ryan Labs acquisition. These initiatives were directed to diversify the Sun Life Investment Management capabilities, adding to its proficiency in asset-liability management as well as fixed income and alternative asset classes. These acquisitions are expected to inflate third-party assets under management to about $50 billion.
Performance of Other Life Insurers
While earnings at StanCorp Financial Group Inc. SFG surpassed the Zacks Consensus Estimate, Reinsurance Group of America Inc. RGA and Torchmark Corp. TMK missed the same in the second quarter.
Zacks Rank
Sun Life carries a Zacks Rank #5 (Strong Sell).
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