A top executive at Sun Life Financial Inc. says the insurer, which beat first quarter earnings estimates last week, is delivering on its growth strategy, particularly in the company’s main international markets in the U.S. and Asia.
“We were very pleased with our first quarter results, in fact we had record underlying net income for the quarter and that was contributed across all of our geographies and business segments,” Tim Deacon, Sun Life’s chief financial officer, told BNN Bloomberg in a Thursday interview.
“We also had record earning in Asia and strong growth in Canada and the U.S.”
Deacon noted that Toronto-based Sun Life’s income was boosted by strength in its growing asset management business, which includes both private and public assets.
The company reported underlying earnings of $1.82 per share on Friday, better than the $1.71 predicted by analysts in a Bloomberg survey. Sun Life also raised its dividend to 88 cents from 84 cents.
In Asia, Sun Life operates across eight different markets, Deacon said, split into two different development categories.
“The developed ones would be Hong Kong, Singapore, the Philippines and India, and the scaling businesses would be more areas like China, Vietnam, Indonesia and Malaysia,” he explained.
“We had record earnings in the first quarter in Asia… we expect that to continue to be a strong area of growth for us, we’ve been investing heavily in the region and have been quite proud of the results that we’ve been seeing.”
In the U.S., Sun Life is a major player in the health insurance space, an industry that may be significantly impacted if consumer drug prices fall due to U.S. President Donald Trump’s recent executive order urging drug companies to electively lower the cost of prescription medication.
But Deacon said lower drug prices could be a positive for Sun Life, since it would allow the company to lower its own insurance prices, which could give more U.S. consumers access to its services.
“In general, having lower drug prices I think is good for consumers and obviously the population who need to use these drugs. As a benefits provider that helps us because that allows us to lower premiums because it reduces the costs of providing insurance and coverage,” he said.
“We don’t participate directly in the medical business, we have a large employee benefits business, it’s top 10 in the market, and we have a medical stop-loss business, so that’s probably where we would see the benefits of lower drug prices more pronounced.”
When it comes to Sun Life’s objectives moving forward, Deacon said the company’s first priority is to reinvest into growth areas like digital and artificial intelligence, and the second is to maintain a dividend payout ratio between 40 per cent to 50 per cent of underlying net income.
“And then the third would be inorganic deployments,” he said, “whether that’s M&A (mergers and acquisitions) or share buybacks.”
With files from Bloomberg News and The Associated Press
