Sun Life Financial reported net income of $937 million for the first quarter of 2021. For the same period in 2020, it posted net income of $391 million. This result is an increase of 139.6 per cent or $546 million. It is the highest result Sun Life has reported in any quarter since at least 2016.
A boost from the markets
Sun Life attributes this increase to favourable equity markets and interest rate changes, “partially offset by unfavourable credit spread.”
This result was partially offset by two factors:
- Higher fair value adjustments on MFS’s share-based payment awards granted
- Higher restructuring costs. Sun Life is reporting a $57 million after-tax restructuring charge related to “our strategy for our workplace and redefining the role of the office.” For more than a year now, many employees around the world have been teleworking due to the restrictions surrounding the COVID-19 pandemic.
Same observation in Canada
By passing the $400 million mark, Sun Life also set a record for its Canadian business.
For its Canadian operations, it reported net income of $405 million in the first quarter of 2021, compared with a net loss of $42 million in the same period of 2020. The corresponding increase of $447 million is due to "favourable market-related impacts, predominantly from equity markets.”
Asia and the United States also advanced
The other four sectors had mixed results for the first quarter of 2021, compared with Q1 2020. Two did better, and two did worse:
- Asia: Net income of $198 million, up 98 per cent or $98 million
- United States: Net income of $211 million, up 28.7 per cent or $47 million
- Asset Management: Net income of $230 million, down 3.8 per cent or $9 million
- Corporate: Net income of $107 million, a gain of $37 million due to restructuring costs.
Canada: Insurance sales decline
Sun Life's total insurance sales were $730 million for the first quarter of 2021. This is a decrease of 5.9 per cent or $46 million compared with the first quarter of 2020.
The steepest drop was seen in Canada, where insurance sales have been in steady decline since Q1 2020.
These sales reached $233 million in the first quarter of 2021, compared with $295 million in the same period last year.
This decline of 21 per cent or $62 million reflects “lower sales in Group Benefits.”
However, this decline was “partially offset by higher individual insurance sales.”
Insurance sales decreased by 5.5 per cent or $9 million in the U.S. to $154 million, “as increases in employee benefit sales were offset by lower medical stop-loss sales.”
In contrast, they increased by 7.9 per cent or $25 million in Asia, reaching $343 million, “driven by growth from our bancassurance partnerships and agency sales in Vietnam and from all channels in India.”
Wealth management sales decline as well
Total sales of Sun Life's wealth management products were $66 billion in the first quarter of 2021. This is an increase of 10.1 per cent or $6.1 billion over the first quarter of 2020.
Two sectors have increased, while one has decreased: Canada.
Domestic wealth management sales were $4.4 billion, up from $5.6 billion in Q1 2020.
This decline of 21.2 per cent or $1.2 billion reflects “higher retained sales in the large case market in the prior year in Group Retirement Services.” However, this was “partially offset by increased mutual fund sales and higher Sun GIF product sales.”
Sales of wealth management products rose by 42 per cent or $975 million in Asia to $3.3 billion, “driven by mutual fund sales in India, the pension business in Hong Kong and money market sales in the Philippines.”
Asset Management sales climbed 12.1 per cent or $6.3 billion to $58.2 billion.
Empire Life, The Co-operators and Northbridge also released their financial results for the first quarter of 2021.
