Although long rumoured, Sun Life confirmed in its latest financial results that, during the fourth quarter of 2015, it had “re-focused our international business on the life insurance segment” and “at the same time, the [US] international wealth business was closed to new sales”.
Sales in the US-based international wealth business decreased by 59.6% to C$96m, down from C$161m during the fourth quarter of 2014.
Sun Life’s US operations have undergone substantial change over the past couple of years. The sale of its annuity business was completed in August 2013 and in September 2015 the company entered into an agreement to acquire Assurant’s employee benefits business. The transaction, pending regulatory approval, is expected to close during the first quarter of 2016.
Results
Sun Life’s net revenue for the fourth quarter was negatively impacted by a significant decrease (-83.5%) in net investment income to C£578m, down from C$3.5bn in Q4 2014.
However, the company recorded a net income increase of C$63m as a result of the favourable impact of the persistent weakening of the Canadian dollar.
Sales in Sun Life’s Life & Health and Wealth businesses during the fourth quarter were as follows:
On an annual basis, Sun Life reported a net investment income of C$3.6bn in 2015, down from C$11.3bn in 2014, which negatively impacted annual revenue.
A net income increase of C$200m, however, was reported as a result of the weaker exchange rate compared with 2014.
President and chief executive, Dean Connor, remains unperturbed, saying: “Our strong fourth quarter capped off a successful year of growth and momentum for Sun Life. In 2015, we achieved underlying net income of C$2.3bn, surpassing our 2015 financial objective of C$1.85bn and ended the year with assets under management of C$891bn.
“We announced six transactions, committing C$2.4bn in capital in building our asset management businesses, adding capabilities and scale in our US operations and strengthening our presence in Asia.
“Our Canadian operations executed well. We grew our wealth business with the successful launch of our new segregated fund, Sun Life Guaranteed Investment (SLGI) Funds, and grew SLGI mutual fund sales by 28%.
Connor continued: “MFS [Investment Management] ended the year with assets under management of US$413bn and maintained margins of 40% for the year. We expanded our asset management pillar by acquiring Bentall Kennedy, Prime Advisors and Ryan Labs in 2015, which together with Sun Life Investment Management, generated net sales of C$1.5bn in the year.
“SLF Asia had a strong year, finishing with underlying net income of C$252m and increased insurance and wealth sales for 2015. We also announced agreements to increase our joint venture ownership in PVI Sun Life in Vietnam and Birla Sun Life Insurance in India, in line with our Asia strategy,” he said
