TORONTO – Sun Life Financial Inc. (TSX:SLF) reported a profit of $513 million for its latest quarter as it worked to lower risk and expand its geographic footprint in Asia amid stagnant interest rates.
The profit which amounted to 85 cents per share was down from $686 million or $1.15 per share a year ago, but still ahead of analyst expectations.
Sun Life said its operating earnings for the quarter were 94 cents per share, well ahead of the 66 cents that had been expected by analysts.
Total revenue was $3.8 billion, compared with $3.2 billion a year ago.
Sun Life, which reported its earnings after its annual meeting Wednesday, said its results were helped by its growth strategy and by higher equity markets for the quarter.
Chief executive Dean Connor said the company’s insurance sales were up five per cent and wealth sales were up 16 per cent.
“Sun Life is off to a strong start in 2013,” Connor said in a statement.
“Our results reflect strong execution against our four pillar strategy, including product and distribution enhancements over the past year, and more favourable market conditions”
In December, Sun Life signed a deal to sell its U.S. variable annuity life insurance unit for US$1.35 billion to Delaware Life Holdings.
Excluding that business the company said it earned an operating profit of from continuing operations of $448 million compared with $437 million a year ago.
Connor told the company’s annual meeting that relations between Ottawa and Asian governments are crucial to the success of Canadian insurance companies.
He called on Canada to work with Asian governments to create a level playing field where Canadian insurers will be able to compete with local companies.
To help reduce risk, Sun Life stopped selling individual life insurance and annuities in the U.S. in January of last year.
In Canada, the insurance company, which is the third largest in the country, adjusted prices, changed its product mix and de-risked products.
“These changes … mean we can support our 2013 sales with one-half the capital that we needed in 2011,” Connor said.
In January, the company teamed with Khazanah Nasional Berhad to purchase 98 per cent of a Malaysian life insurance company from its two current owners, which include British insurance group Aviva PLC.
During the annual general meeting Sun Life was questioned about compensation for executives, after information filed in March showed Connor earned nearly $8 million in total compensation last year.
Chairman James Sutcliffe said Sun Life’s compensation practices have been deemed appropriate by the Canadian Coalition for Good Governance.
“The way we believe it’s best done is the directors retain responsibility for executive compensation and executive renumeration,” said Sutcliffe.
“We’ve implemented the best practice to engage with shareholders and obtain direct feedback, because we are very interested in what people think. And certainly if there’s a specific point that the questioner wants to raise, we’d be delighted to hear it.”