Canada’s Sun Life beats profit estimates, helped by new business

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TORONTO (Reuters) -Sun Life Financial, Canada’s second-biggest life insurer, on Wednesday comfortably beat analysts’ estimates for second-quarter core profit, which rose slightly from a year earlier as higher earnings in Canada helped offset a decline in profits from its wealth management unit.

Underlying profit was C$892 million ($694.65 million), or C$1.52 a share, in the three months ended June 30, from C$883 million, or C$1.50, a year earlier. Analysts had expected profit of C$1.39 a share.

Analysts have flagged a more muted quarter for Canadian life insurers, in large part due to their substantial wealth and asset management units that were expected to be hit by the recent declines in global equity markets. With a large presence in Asia for Sun Life and larger rival Manulife, lingering COVID restrictions were also expected to weigh on them.

Sun Life’s reported net income dropped to C$1.34 a share from C$1.53 a year earlier, which the company attributed to market-related impacts and costs related to its acquisition of U.S. benefits firm DentaQuest, which closed June 1.

Core earnings in Canada rose 19%, helped by business growth and greater insurance sales. That helped offset declines in other units, particularly wealth management, where underlying profit decreased 13% as global stock market woes weighed on its equities-focused MFS Investment Management business.

Earnings in Asia fell 3% from a year earlier, driven in part by lower sales from COVID-related restrictions.

Sun Life said contributions from DentaQuest helped earnings in the country but U.S. underlying profit still dropped 7%, partially due to higher long-term disability claims.

($1 = 1.2841 Canadian dollars)