Sun Life Financial reported net income to common shareholders of $749 million (MS) for the fourth quarter of 2023. For the full year, net income stood at $3.1 billion.
This compares to the fourth quarter of 2022, when net income was $1.2 billion. This figure was adjusted for the new IFRS 9 and IFRS 17 standards.
Sun Life's President and CEO, Kevin Strain, emphasized the "exceptional" level of individual protection sales and "the good momentum in our health and group protection business."
During a discussion with analysts on Feb. 8, Strain highlighted the Canada Dental Care Plan launched by the federal government. Sun Life signed an agreement in the last quarter of 2023 to act as administrator of the federal program.
Sun Life reported underlying net income of $983 million in the fourth quarter of 2023, compared with $892 million for the same period of 2022. Underlying profit is used to present the statement of operating results that exclude exceptional events, such as the sale or purchase of portfolios or other businesses.
For fiscal 2023 as a whole, underlying profit was $3.7 billion, up $359 million or 11% compared to fiscal 2022.
In Canada
In Canada, the insurer reported fourth-quarter net income to common shareholders of $348 million, compared with $453 million in the same quarter of 2022 on an adjusted basis.
For the full year 2023, net income in Canada totaled $1.3 billion, up $11 million compared to 2022 on an adjusted basis.
The company points out that this result reflects the market impact mainly of interest rates and results related to real estate experience, as well as the impact of the change in the Canadian Tax Rate change in the third quarter. These results were partially offset by the impact of changes in management assumptions and measures, and the increase in underlying net income.
Sales
Sun Life's total insurance sales reached $2.2 billion in the fourth quarter of 2023, compared with $1.8 billion for the same period of 2022.
For the full year 2023, sales reached $5.4 billion, compared with $4.3 billion in 2022. This represents an increase of 26%.
Both in the last quarter of 2023 and for the full year, insurance sales increased in Canada, the United States and Asia. In 2023, sales rose by 17% in Canada and the United States, and by 46% in Asia.
Asset Management
Wealth management product sales and gross asset management flows reached $45.7 billion in the fourth quarter of 2023, compared with $43.3 billion for the same quarter of 2022.
For the full year 2023, sales of wealth management products and gross asset management flows were $173.8 billion in 2023, compared with $198.6 billion in 2022.
As at Dec. 30, 2023, assets under management totaled $793 billion for MFS and $223 billion for SLC Management.
Real estate portfolio
During the discussion with analysts, Chief Investment Officer Randy Brown explained that the decline in the value of the real estate portfolio was due to office properties, mainly in the U.S. market, but also to a lesser extent in Canada.
Brown says that he believes that the worst is over and that the market is recovering in this respect. Brown adds that the insurer is a patient investor in this market, and generally holds buildings in its portfolio between 10 and 20 years. Existing tenants may have reduced floor space, but the natural growth of the economy means that new companies need these offices, he explains.
In addition, Kevin Strain thanked his VP Finance, Manjit Singh, who has been appointed Head of the Asia Division, for his work in connection with changes to IFRS accounting standards. His successor will be named shortly, as Singh completes his finance mandate in mid-March.
