Sun Life Financial has reported underlying net income of C$1.045 billion for the first quarter ended March 31, 2025, a 19% increase from C$875 million in Q1 2024.
The increase was supported by higher earnings in asset management and wealth, group benefits, and individual protection lines.
The asset management and wealth segment posted a C$79 million increase, attributed to higher fee-related earnings, catch-up fees, and improved net seed investment income within SLC Management.
In group health and protection, earnings rose by C$50 million, reflecting business growth and favorable morbidity and mortality experience in Canada, as well as stronger US dental results. The individual protection line added C$55 million, with contributions from Asia joint ventures and improved protection experience in Canada.
Corporate expenses and other accounted for a C$14 million increase in net loss due to lower investment income from surplus assets.
Comparatively, reported net income for Q4 was C$237 million, down C$512 million or 68% from the previous year. Full-year reported net income was C$3.05 billion, a decline of C$37 million or 1% from 2023. The reported ROE was 4.0% for the quarter and 13.6% for the year.
Reported net income for the first quarter was C$928 million, up C$110 million, or 13%, from the prior-year period. This increase was driven by the rise in underlying net income and positive market-related impacts, including improved real estate performance and favorable interest rate movements, partially offset by equity market declines.
Additional fair value changes in MFS shares and the absence of prior-year gains from the partial sale of ABSLAMC and the early termination of a distribution agreement in asset management also influenced the result.
Sun Life reported an underlying return on equity (ROE) of 17.7%, compared to 16.0% in Q1 2024. Reported ROE was 15.7%, up from 15.0%. The company ended the quarter with a LICAT ratio of 149%.
Sun Life president and CEO Kevin Strain (pictured above) said the quarter showed growth across the company’s core businesses, adding that the firm continues to focus on its client impact strategy and strategic initiatives.
"This quarter, we achieved strong top and bottom-line growth across all of our businesses, reflecting the trust and confidence our clients continue to place in Sun Life for their health and financial needs," Strain said.
Sun Life’s Canadian operations recorded underlying net income of C$376 million, up C$66 million, or 21%, from the previous year. The result reflected higher fee income from increased assets under management, along with favorable morbidity and mortality outcomes in group health and protection. The individual protection line also saw improved performance due to lower claims severity.
Reported net income for Canada rose by C$61 million to C$351 million, with market-related impacts broadly in line with the prior year. Improved real estate experience and favorable interest rates were offset by weaker equity market performance.
US underlying net income reached C$151 million ($218 million), an increase of C$29 million or 15%, supported by improved results in group health and protection and individual protection. In the group segment, higher dental outcomes were driven by Medicaid repricing and prior-year comparisons following the end of the Public Health Emergency.
In medical stop-loss, results were affected by less favorable morbidity experience. Individual protection gains came from stronger investment performance.
Reported net income for the US rose to C$186 million ($129 million), up C$89 million or 92%. Market-related gains, especially in real estate and interest rates, contributed to the result, while equity market declines were a partial offset.
Foreign exchange translation contributed C$13 million to underlying net income and C$11 million to reported net income. US group sales totaled C$176 million ($123 million), down 8% from Q1 2024, reflecting lower Medicaid-related dental sales and reduced employee benefits sales.
In Asia, underlying net income was C$197 million, an increase of C$20 million or 11%. Asset management and wealth contributed C$7 million from higher fee income driven by increased assets under management. Individual protection added C$13 million, driven by new sales, in-force business growth, and joint venture performance, partially offset by lower surplus earnings and unfavorable international mortality experience.
Reported net income in Asia was C$166 million, down C$69 million or 29%, reflecting the impact of a prior-year gain on the partial sale of ABSLAMC. Market-related performance was in line with the previous year, with real estate gains offset by unfavorable interest rate and equity market movements. Foreign exchange translation added C$10 million to underlying net income and C$8 million to reported net income.
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