Sun Life Financial Inc. (PSE: SLF) (TSX: SLF) (NYSE: SLF) had operating net income of $453 million in the fourth quarter of 2012, compared to an operating loss of $221 million in the fourth quarter of 2011. Operating EPS was $0.76 in the fourth quarter of 2012, compared to an operating loss per share of $0.38
in the fourth quarter of 2011.
Reported net income was $395 million or $0.65 per share in the fourth quarter of 2012, compared to a reported loss of $525 million or a reported loss per share of $0.90 in the fourth quarter of 2011.
Sun Life’s financial results in the fourth quarter reflect continued execution against its growth strategy, as well as positive impact from investment activity. Market factors had no material impact in the quarter, as the positive impact of improved equity markets was largely offset by declines in the fixed income reinvestment rates in the company’s insurance contract liabilities, which were driven by the continued low interest rate environment, and unfavorable impact from credit spread and swap spread movements. Operating net income excluding the net impact of market factors was $420 million.
The Board of Directors of Sun Life Financial Inc. has also declared a quarterly shareholder dividend of $0.36 per common share, maintaining the current quarterly dividend.
“Sun Life’s fourth quarter results reflect overall solid earnings performance,” Dean Connor, President and CEO, says. “It was a transformational year for Sun Life as we significantly reduced our risk profile and made important strides in implementing our four pillar growth strategy. Operating earnings in 2012 at SLF Canada were up more than 25% from 2011, with strong growth across all business units, reflecting asset growth, greater distribution strength and a more profitable business mix. We remain number one in our group benefits and pension businesses and improved our position in individual insurance sales.”
“Our asset management businesses had an outstanding year, capped by a strong fourth quarter,” Connor says. “MFS recorded the strongest net inflows in the firm’s history, ending the year with assets under management of nearly US$325 billion, an all-time high. In Canada, sales of mutual funds increased more than 40% compared to the fourth quarter of 2011, including strong sales of Sun Life Global Investments mutual funds.”
“The sale of our domestic U.S. annuity business, announced in the fourth quarter, was a major milestone in our strategy of reducing our risk profile,” Connor adds. “Our U.S. insurance operations are now focused primarily on growing our employee benefits and voluntary benefits businesses, which recorded significant sales growth on both a quarterly and annual basis, and hit all milestones for expanding distribution and introducing new products. Our Asia operations concluded the year with a strong fourth quarter. We made good progress in 2012 by expanding distribution and our overall Asian footprint. Subsequent to the quarter, we announced our entry into the fast-growing Malaysian market and received regulatory approval to commence operations in Vietnam.”
Strengthening the competitive position in Asia
Sun Life of Canada (Philippines), Inc. capped a strong year with fourth quarter sales that were more than 60% higher than the same period in 2011. The integration of Sun Life Grepa Financial Inc., the bancassurance joint venture in the Philippines, is on track for completion in mid-2013.
In Indonesia, PT Sun Life Financial Indonesia added more than 750 advisors to its agency force in the fourth quarter, surpassing 5,000 advisors. Shariah sales continued to grow, accounting for 37% of agency sales and 30% of total Sun Life sales in Indonesia.
Sun Life Hong Kong Limited achieved strong fourth quarter sales in its pension business, reflecting continued contribution from its MPF business. MPF sales in the quarter benefited from the Employee Choice Arrangement legislation enacted in November, which provides employees more flexibility in their choice of MPF provider.
Birla Sun Life Insurance Company Limited retained its ranking as the fifth largest private insurance company in India. Birla Sun Life Asset Management Company Limited is ranked fourth amongst all asset managers in India.
In 2013, Corporate Knights ranked Sun Life Financial among the Global 100 Most Sustainable Corporations in the World, for the seventh time in nine years, in recognition of Sun Life’s sustainability performance.