Sun Life shares after beating UK profits and unit sales

The Sun Life Financial logo is seen at the corporate office on One York Street in Toronto, Ontario, Canada, February 11, 2019. REUTERS/Chris Helgren/File Photo

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TORONTO, Aug 4 (Reuters) – Shares of Sun Life Financial (SLF.TO) surged on Thursday after reporting better-than-expected second-quarter profit and announcing the sale of its UK business and a partnership asset management with the buyer. , Phoenix Group Holdings (PHNX.L).

Earlier Thursday, Canada’s second-largest life insurer agreed to sell its UK private business to Phoenix for 248 million pounds ($301 million) and become its strategic asset management partner, managing around 9 billion Canadian dollars ($7 billion) from Sun Life UK General Account. Read more

Sun Life expects to get a “good chunk” of the $25 billion Phoenix plans to deploy in North American fixed income and alternative investments over the next five years, CEO Kevin Strain said Thursday. during a call to analysts. He added that this will offset some of the lost revenue and support revenue.

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Strain said Sun Life has no current plans to sell any other closed blocks, including the British business’ immediate annuities portion, which it retained, and an individual life insurance business (IFM ) in the USA.

“We like the dynamics of these closed blocks,” Strain told Reuters, adding that these companies can generate strong earnings and cash flow and good return on equity for at least 10 years.

Shares of Sun Life rose 2.8% to C$60.80 in early afternoon trading in Toronto on Thursday, on track for its highest close in nearly eight weeks. The benchmark Toronto equity index (.GSPTSE) rose 0.14%.

Late Wednesday, Sun Life reported basic earnings per share of C$1.52, beating analyst estimates of C$1.39, helped by improving U.S. operations and better than expected in Canada which offset disappointing results from its Asset Management and Asia units. Read more

Sun Life executives said U.S. benefits provider DentaQuest, whose acquisition was completed on June 1, would help it achieve its goal of 10% organic growth in its group insurance business in the United States. United States.

“DentaQuest has been a growth engine over its history,” Dan Fishbein, president of its US unit, said on the analyst call. “We believe there is a lot of potential in the DentaQuest business on several fronts to continue winning new government contracts.”

He warned that the company is “very lumpy” with small but very large contracts that could lead to sporadic profit growth.

($1 = 0.8243 pounds)

($1 = 1.2862 Canadian dollars)

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Reporting by Nichola Saminather; Editing by Josie Kao

Our standards: The Thomson Reuters Trust Principles.

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