Sun Life Financial Reports Second Quarter 2017 Results
Sun Life Financial Inc. announced its results for the second quarter ended June 30, 2017. Second quarter reported net income was $574 million and underlying net income(1) was $689 million.
"Our second quarter reflected strong earnings in all of our four business pillars, with underlying net income of $689 million, up 24% over the same quarter last year," said Dean Connor, President & CEO, Sun Life Financial. "The quarter reflects strong execution across our businesses with particular strength in Canada, and good progress in asset management and in integrating our U.S. Group business. Total wealth sales grew 12%, while total insurance sales had more paced growth over the prior year following a strong first quarter. We are also pleased to announce the Board of Directors' approval of a share buyback program, reflecting our strong capital position."
"During the quarter our people across the globe rallied around the launch of our new company Purpose - Helping our Clients achieve lifetime financial security and live healthier lives - which is about putting our Clients at the centre of everything we do," Connor added. "Building on this commitment, for example, this quarter we improved access to mental health care by launching a virtual cognitive behavioural therapy program to Canadian Group Clients. This innovative new online therapy option will lead to faster and easier access to treatment for Canadians living with a mental illness."
"During the quarter, we also moved our head office to the Sun Life Financial Tower at One York Street, bringing our downtown Toronto operations together in a collaborative and energetic new environment."
Our strategy is focused on four key pillars of growth, where we aim to be a leader in the markets in which we operate. We detail our continued progress in these pillars below.
A Leader in Insurance and Wealth Solutions in our Canadian home market
Individual insurance sales, including our updated products launched in 2017, were consistent with the second quarter last year at $100 million. Individual wealth sales of $1.4 billion were 17% above the same quarter of the prior year driven by continued growth in our wealth manufactured(1) products, including SLGI(2) mutual funds and Sun GIF(3) segregated funds.
Sales in Group Benefits of $130 million increased 14% compared to second quarter 2016 driven by a few new large Client wins. Group Retirement Services sales of $2.4 billion were 53% ahead of the second quarter of 2016, due in part to a large case annuity sale in our Defined Benefit Solutions business.
During the quarter, our my Sun Life mobile app, the highest rated life insurance mobile app in Canada, reached a milestone of one million healthcare provider ratings. The app enables Clients to search and contact 65,000 peer-rated, paramedical healthcare providers across Canada, click to call for appointment bookings, and facilitate finding providers with direct billing. It also allows Clients to submit health claims, check investment balances, and quickly click to connect with their financial advisor.
A Leader in global Asset Management
SLF Asset Management ended the second quarter with $655 billion in assets under management consisting of $599 billion (US$462 billion) from MFS Investment Management ("MFS") and $56 billion from Sun Life Investment Management ("SLIM"). Net outflows of US$4.0 billion at MFS were primarily driven by institutional Client portfolio re-balancing. SLIM had net inflows of $0.9 billion.
MFS long-term retail fund performance remained strong with 82%, 84% and 92% of MFS's U.S. retail mutual fund assets ranked in the top half of their Lipper categories based on three-, five- and ten-year performance, respectively, as of June 30, 2017.
For the sixth consecutive year, the Global Real Estate Sustainability Benchmark ranked Bentall Kennedy among the top firms globally for its commitment to sustainable investing.
A Leader in U.S. Group Benefits and International high net worth solutions
Sales in SLF U.S., including Group Benefits and International, were consistent with the second quarter of 2016. We continue to make strides in the integration of our U.S. employee benefits business acquired in 2016. To date, we have achieved over half of our expected expense synergies, and continue to expect to achieve the full $100 million pre-tax run-rate synergies by the end of 2019. We are rolling out our newly combined portfolio of employee benefits products and services, representing our best offerings, under the Sun Life brand.
A Leader in Asia through Distribution Excellence in Higher Growth Markets
SLF Asia individual insurance sales were consistent with the second quarter of the prior year, driven by organic growth and increases in ownership of our Indonesia and Vietnam businesses, partially offset by sales in Hong Kong reflecting a moderated level following a strong 2016.
Continuing strong Asia wealth sales of $2.9 billion, up 66% over prior year, were led by growth in our joint venture mutual fund company in India, Aditya Birla Sun Life AMC Limited, which now manages over $44 billion in AUM and is the fourth largest mutual fund operation in the country(4).
During the quarter, Sun Life Malaysia announced a partnership with U Mobile, one of Malaysia's fastest growing telecommunications companies, to offer life insurance via a telco service. For the first time, Malaysians will be able to apply, subscribe and manage their coverage entirely on their mobile device. The products are targeted for launch later this year.