Sun Life Financial Reports Third Quarter 2013 Results
TORONTO, Nov. 6, 2013 /CNW/ - Sun Life Financial Inc.(5) reported operating net income from Continuing Operations of $422 million in the third quarter of 2013, compared to $459 million in the third quarter of 2012. Our operating EPS from Continuing Operations was $0.69 in the third quarter of 2013, compared to $0.77 in the third quarter of 2012. Reported net income from Continuing Operations was $324 million or $0.53 per share in the third quarter of 2013, compared to reported net income from Continuing Operations of $441 million or $0.74 per share in the same period last year.
Third Quarter 2013 Financial Highlights
• Operating net income(1) from Continuing Operations(2) of $422 million, compared to $459 million in the third quarter of 2012. Reported net income from Continuing Operations of $324 million, compared to $441 million in the same period last year. Results reflect continued business growth and favourable interest rate and equity market experience
• Operating earnings per share(1) ("EPS") from Continuing Operations of $0.69, compared to $0.77 in the third quarter of 2012. Reported EPS from Continuing Operations of $0.53, compared to $0.74 in the same period last year
• We completed the sale of our U.S. Annuity Business(2) during the quarter
• Operating return on equity(1) ("ROE") (Combined Operations)(2)(3) of 12.6%, compared to 11.8% in the third quarter of 2012. Reported ROE (Combined Operations)(3) of (14.2)% (reflecting the loss on the sale of our U.S. Annuity Business), compared to 11.3% in the same period last year
• Quarterly dividend of $0.36 per share
• MCCSR ratio for Sun Life Assurance(4) of 216%
Operating net income excluding the net impact of market factors from Continuing Operations was $337 million in the third quarter of 2013 compared to $492 million in the third quarter of 2012. Non-capital market related assumption changes and management actions in the third quarter of 2013 were unfavourable by $111 million, and favourable in the same period in 2012 by $164 million. Removing these amounts from both years, operating net income excluding the net impact of market factors from Continuing Operations would have been $448 million in the third quarter of 2013, as compared to $328 million in the third quarter of 2012.
"Sun Life's results were driven by strong underlying performance across our four strategic growth pillars," Dean Connor, President and CEO, said. "We generated another strong quarter of sales growth, with wealth sales up 25%, insurance sales up 6% and continued growth in Value of New Business. We also benefited from favourable market conditions. During the quarter, we also completed the sale of our U.S. Annuity Business to Delaware Life Holdings, LLC, a milestone that has significantly improved Sun Life's risk profile."
The Board of Directors of Sun Life Financial Inc. today declared a quarterly shareholder dividend of $0.36 per common share, maintaining the current quarterly dividend.
"Sun Life's overall premiums and deposits grew 26% to $33 billion. This growth was driven by US$8.6 billion net sales in MFS," Connor said. "MFS had a very strong quarter, finishing the period with record assets under management of US$386 billion, driven by continued strong sales and investment performance."
"In Canada, we delivered double-digit growth in sales of both individual life and health insurance and wealth products compared to the same period last year," Connor said. "Sales momentum continued in SLGI with mutual fund retail sales increasing 78%."
"We continue to see positive results from the execution of our U.S. strategy, with sales in our Employee Benefits Group rising 25% compared to the same period last year, driven by a 47% increase in voluntary benefit sales and a 44% increase in stop loss sales. We are taking concrete steps to improve distribution and operating effectiveness and enhance the customer experience," Connor said. "Our Life and Investment Products' international business continues to grow, with new offices opening internationally and sales increasing 35% over the same quarter last year."
"We are pleased with the continued growth in Asia as insurance sales rose 5% due to higher sales in the Philippines, Hong Kong and Indonesia, and wealth sales increased 56%, primarily due to increased mutual fund sales in the Philippines and MPF sales in Hong Kong," Connor said. "We introduced new products in Malaysia and Vietnam during the quarter, expanding our presence in both markets."
Our strategy is focused on four key pillars of growth. We detail our continued progress against these pillars below.
Becoming the best performing life insurer in Canada
Sun Life Financial Canada continues to progress towards achieving its goal of becoming the best performing life insurer in Canada with strong third quarter results.
Individual Insurance sales of $75 million in the third quarter grew 17% compared to the same period last year, with wholesale insurance sales achieving record quarterly results. Individual Wealth sales exceeded the same quarter in the prior year by 30%, driven by strong payout annuity and mutual fund sales. Sun Life retained its first place position in payout annuities with 44% market share (as measured by LIMRA).
The Career Sales Force ("CSF") continued to grow during the quarter reaching 3,700 advisors and managers across the country.
Sun Life Global Investments (Canada) Inc. ("SLGI") retail sales increased by 78% over the same period last year, as a result of accelerated sales momentum.
Seven SLGI long-term funds (Series A) have passed their three-year anniversary and were above the median in their respective categories based on fund performance, with four funds in the first quartile. Sun Life MFS Global Value, Sun Life MFS International Value and Sun Life MFS Global Total Return were rated five stars by Morningstar and delivered top ten performance in each of their respective categories.
Group Retirement Services ("GRS") assets under administration reached a record high of $61 billion, driven by favourable market growth and strong sales, including higher rollover retention rates.
Group Benefits ("GB") recorded a solid quarter, with strong results in the long-term disability line resulting in an increase in year-to-date operating earnings of 7% compared to the same period last year.
Becoming a leader in group insurance and voluntary benefits in the United States
Sun Life Financial U.S. continues to transform and grow its group insurance and voluntary benefits businesses.
Total Employee Benefits Group ("EBG") sales in the third quarter of 2013 increased 25% compared to the same period last year. Voluntary benefits sales increased 47% compared to the prior year.
EBG continues to expand its product suite and released two new group voluntary accident insurance plans that provide protection for customers who are injured in a variety of covered accidents. EBG also launched an innovative stop-loss cancer offering that provides an enhanced benefit to self-insured employers that offer Sun Life's cancer products to their employees.
Growing our asset management businesses globally
Global assets under management ("AUM") ended the quarter at $590 billion compared to $591 billion in the prior quarter. AUM decreased $30 billion due to the sale of our U.S. Annuity Business, offset by a net positive impact of $29 billion from net sales, market appreciation and foreign exchange movements.
MFS continues its record-setting performance ending the quarter with AUM of US$386 billion, an all-time high. Gross sales of US$25.4 billion in the third quarter of 2013 were 20% higher than the same period last year. Net sales were US$8.6 billion in the quarter, US$2.7 billion higher than the second quarter of 2013.
Retail fund performance at MFS remained strong with 94% of fund assets ranked in the top half of their respective Lipper categories based on three-year performance at September 30, 2013.
MFS was named Equity Manager of the Year for the second year in a row by Financial News in the U.K.
Strengthening our competitive position in Asia
Sales momentum, expanded distribution channels and the addition of our newest ventures in Vietnam and Malaysia, continue to strengthen our competitive position in Asia.
In the Philippines, we continued to grow in the third quarter despite market volatility, as insurance sales increased 21% and mutual fund sales at Sun Life Asset Management Company increased 58% over the same period last year. We also exceeded our 5,000 agent milestone during the quarter, two years ahead of schedule.
In Hong Kong, we recorded strong growth in pension and individual sales. Individual sales grew 43% with strong performance from the broker channel. In September, we reinforced our brand and commitment to Hong Kong with the installation of new signage atop the World Trade Centre overlooking the Hong Kong harbour.
In Indonesia, we continued to increase our agency sales force, surpassing 6,700 advisors in the quarter. With over 80% of agents licensed to sell Shariah products, our sales of Shariah products were up 61% over the same quarter last year. Agency sales more than doubled over the same period last year.
In India, Birla Sun Life Asset Management Company's MNC Fund-Growth and Birla Sun Life 95-Dividend were awarded the 2012 Lipper Fund Awards for Best Equity Fund (5 years) and the Best Mixed Asset INR Balanced Fund (10 years), respectively.
In Malaysia, we launched several new products through CIMB Bank and our operations have contributed income in Sun Life Financial Asia since acquisition in April 2013. In Vietnam, our new Universal Life product received regulatory approval during the quarter and was launched in October.