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Sun Life Financial (SLF) Q1 Earnings Decrease Year Over Year

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·4-min read
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Sun Life Financial Inc. SLF delivered first-quarter 2022 net income of $858 million, which decreased 8.4% year over year.

The underlying net income of $665.4 million (C$843 million) was down 0.8% year over year. The downside was due to unfavorable mortality and disability, which included impacts from COVID-19 and lower available-for-sale (AFS) gains. It was offset by broad-based business growth, higher investment gains and lower corporate expenses.

Insurance sales increased 9.4% year over year to $630.7 million (C$799 million), attributable to increased sales in Canada, driven by large case group benefits sales in Sun Life Health.

Wealth sales and asset management gross flow decreased 12.1% year over year to $45.7 billion (C$57.9 billion) in the quarter under review due to lower sales in asset management. It was offset by higher sales in Asia and Canada.

The value of new business declined 7.2% to $203.6 million (C$258 million).

Sun Life Financial Inc. Price, Consensus and EPS Surprise

Sun Life Financial Inc. Price, Consensus and EPS Surprise
Sun Life Financial Inc. Price, Consensus and EPS Surprise

Sun Life Financial Inc. price-consensus-eps-surprise-chart | Sun Life Financial Inc. Quote

Segment Results

SLF Canada’s underlying net income increased 4.5% year over year to $235.2 million (C$298 million), driven by business growth and new business gains.

SLF U.S.’ underlying net income was $93.1 million (C$118 million), down 31% from the prior-year quarter due to mortality and morbidity. It was partially offset by business growth.

SLF Asset Management’s underlying net income of $257.3 million (C$326 million) increased 12% year over year, driven by higher results in MFS and SLC Management.

SLF Asia reported an underlying net income of $120 million (C$152 million), which decreased 4.4% year over year due to a new business strain in Hong Kong, largely due to lower sales as a result of COVID-19 restrictions. It was partially offset by experience-related items.

Financial Update

Global assets under management were $1083.2 billion (C$1,352 billion), up 4.7% year over year.

Sun Life Assurance’s Minimum Continuing Capital and Surplus Requirements (LICAT) ratio was 123% as of Mar 31, 2022, down 100 basis points year over year.

The LICAT ratio for Sun Life (including cash and other liquid assets) was 143%, up 200 basis points (bps) year over year.

Sun Life’s return on equity was 14.3% in the first quarter, contracting 260 bps year over year. Underlying ROE of 14% contracted 130 basis points year over year.

The leverage ratio of 25.9% deteriorated 320 bps year over year.

Dividend Update

On May 11, Sun Life’s board of directors approved a 4.5% increase in the quarterly dividend to 69 cents per share.

Zacks Rank

Sun Life currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Life Insurers

Voya Financial, Inc. VOYA reported first-quarter 2022 adjusted operating earnings of $1.47 per share, which surpassed the Zacks Consensus Estimate by 8.1%. The bottom line increased 42.7% year over year. Total revenues amounted to $1.5 billion against ($2 billion) in the year-ago quarter.

Voya Financial's net investment income declined 11.7% year over year to $630 million. Meanwhile, fee income of $433 million decreased 5.4% year over year. Premiums totaled $613 million versus ($5 billion) in the year-ago quarter. Total expenses were $1.4 billion versus a benefit of $3 million in the year-ago quarter.

Lincoln National Corporation LNC reported first-quarter 2022 adjusted earnings of $1.66 per share, which missed the Zacks Consensus Estimate of $1.97. Also, the bottom line declined from the prior-year figure of $1.82 per share.

Lincoln National's adjusted operating revenues decreased to $4,718 million in the first quarter from $4,762 million a year ago. Also, it missed the consensus mark of $4,768 million.

Reinsurance Group of America, Incorporated RGA reported first-quarter 2022 adjusted operating earnings of 47 cents per share against the Zacks Consensus Estimate of a loss of 61 cents. In the year-ago quarter, RGA had reported a loss of $1.24 per share. Net premiums of $3.1 billion rose 8.3% year over year.

Investment income, net of related expenses, decreased 0.2% from the prior-year quarter to $810 million. The average investment yield was down 38 basis points to 5.29%. Total benefits and expenses at Reinsurance Group increased 1.4% year over year to $3.9 billion.


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