Insurer Sun Life tops estimates on higher sales in asset management

[TORONTO] Sun Life Financial, which has an office in Singapore, rode the stock-market rebound to a 5 per cent earnings increase for the third quarter, helping the Canadian insurer beat analysts' estimates.

A 25 per cent increase in sales at Sun Life's asset-management unit helped propel the company to adjusted earnings of C$842 million (S$869.7 million), or C$1.44 per share. Analysts were expecting C$1.27. The division, which includes MFS Investment Management, earned slightly more than its core Canadian division.

MFS saw net inflows from retail investors for the seventh straight quarter, with the US and Europe driving the gains, chief executive officer Dean Connor said. The move to index funds and other passive investment vehicles is "slowing down", he said. "There's been a move to passive, but it was never meant to be that 100 per cent of assets would move to passive."

MFS ended the quarter with US$548 billion in assets under management, up 11 per cent from a year earlier.

Toronto-based Sun Life has been trying to build a larger and more diverse asset-management business through acquisitions of firms in credit, real estate, infrastructure and private assets. The company agreed last month to buy 51 per cent of Los Angeles-based Crescent Capital Group, one of the largest investors in alternative credit, for as much as US$338 million.

Sun Life isn't likely to do more deals in its alternatives business in the near future, Mr Connor said. "We're going to pause. We think we've assembled all the right building blocks," he said.

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There are still acquisition opportunities in Asia, Mr Connor added. The insurer posted adjusted earnings of C$164 million, up 19 per cent from a year earlier, in the region.

Sun Life said in August that it had opened an office in Singapore to target affluent clients in the city-state and said it would look for deals to expand its reach in the region.

The company has benefited from having no US long-term care or variable annuity policies, two products that have weighed on rivals' results. The company's shares are down 7.2 per cent this year. That's the best performance among Canada's four largest life insurers.

BLOOMBERG