By Nichola Saminather
TORONTO (Reuters) – Sun Life Financial Inc
Underlying net income, excluding adjustments and market impacts, was C$1.26 a share in the three months ended June 30, compared with C$1.24 a year earlier, despite higher death claims and credit charges, Canada’s second-biggest life insurer said in a statement. Analysts had expected C$1.13 a share.
Sun Life is the third Canadian life insurer this week to report results that comfortably beat analyst estimates, with Manulife Financial Corp
“The industry globally has been experiencing mortality claims for COVID-19 that are less than expected,” Sun Life Chief Executive Dean Connor said in an interview. “The impact of credit, reserving and charges, has also been somewhat less than people expected, partly because of government support.”
Connor acknowledged uncertainties in the broader environment that could have an impact in future quarters.
“Beyond interest rates, which will stay low for a long time, it’s difficult to speculate on what will happen with all the other moving parts,” he said.
Core net income growth was capped in part by increased reserves due to lower ratings on some public and private fixed-income investments, the company said.
The COVID-19 pandemic hit insurance sales in Canada, which fell 22%, even as the U.S. and Asian businesses remained resilient. A 62% jump in wealth sales was driven by asset management subsidiaries MFS and SLC Management and Asia.
Sun Life’s reported profit fell to C$519 million ($390.08 million), or 88 Canadian cents a share, from C$595 million, or C$1 a share, a year earlier, due to lower interest rates and narrower credit spreads.
(Reporting by Nichola Saminather in Toronto; Editing by Richard Pullin)
