Sun Life Financial started 2022 with a setback.
The insurer reported net income of $858 million ($M) in the first quarter of 2022, down from $937 million in Q1 2021.
This decline of 8.4 per cent or $79 million was “driven by less favourable market-related impacts,” says Sun Life. It was “partially offset by a Q1'21 restructuring charge and lower fair value changes on MFS' share-based payment awards.”
Three of Sun Life’s five segments declined, including Canada.
Canada
Canada’s national net income was $263 million in the first quarter of 2022, versus $405 million in Q1 2021. The decline of 35.1 per cent or $142 million partially reflects “changes in interest rates and lower equity markets, partially offset by an increase in the value of real estate investments and an increase in underlying net income of $13 million,” Sun Life says, adding that “Underlying net income of $298 million increased 5 per cent, driven by business growth and new business gains.”
Around the world
Compared with Q1 2021, Sun Life’s net income fell in Q1 2022 by:
- 19.9 per cent or $42 million in the U.S., to $169 million
- 18.7 per cent or $37 million in Asia, to $161 million
In contrast, Sun Life reported:
- Net income of $308 million for its Asset Management segment, for an increase of 33.9 per cent or $78 million
- A net loss of $43 million in Q1 2022 for its Corporate segment, compared with a net loss of $107 million in Q1 2021. Although still in negative territory, the result points to a $64 million improvement.
Insurance sales
Sun Life’s total insurance sales were $799 million in the first quarter of 2022, versus $730 million in Q1 2021. This represents an increase of 9.4 per cent or $69 million.
In Canada, insurance sales soared to $332 million in Q1 2022, compared with $233 million in Q1 2021. This increase of 42.5 per cent or $99 million was “driven by large case group benefits sales in Sun Life Health.”
Insurance sales sagged in the other two segments:
- In Asia, they were $319 million, down 7 per cent or $24 million, “reflecting new business strain in Hong Kong largely driven by lower sales as a result of COVID-19 restrictions, partially offset by sales growth in India and Singapore”
- In the United States, sales totalled $148 million, down 3.9 per cent or $6 million “reflecting a large employee benefits case sale in the prior year, largely offset by a 56 per cent increase in medical stop-loss sales.”
Wealth management sales
Wealth sales and asset management gross flows in Sun Life Asset Management were $57.9 billion in the first quarter of 2022, compared with $66 billion in Q1 2021. This amounts to a decrease of 12.2 per cent or $8.1 billion.
One out of the three sectors declined: Asset Management. It reported flows of $49.4 billion in the first quarter of 2022. The downturn of 15.1 per cent or $8.8 billion reflects “lower retail gross flows in MFS and institutional gross flows in SLC Management.”
In contrast:
- In Canada, sales of wealth management products were $4.9 billion in the first quarter of 2022, up from $4.4 billion in Q1 2021. This 11.4 per cent or $504 million increase was “driven by defined contribution sales in Group Retirement Services ("GRS"), partially offset by individual wealth sales.”
- In Asia, wealth sales were $3.5 billion in the first quarter of 2022. The growth of 6.8 per cent or $225 million was “driven by higher sales in the Philippines and India, partially offset by lower sales in Hong Kong from COVID-19-related impacts.”
