Canada’s second-largest insurer missed analysts’ expectations after its first-quarter earnings were hit by higher morbidity claims, the sale of its U.K. business and the end of the public-health emergency in the United States.reported “underlying” net income of $875-million, or $1.50 a share, for the first three months of the year, down from $895-million, or $1.52 a share, in the same period last year. Underlying net income strips out investment losses and makes other accounting adjustments.
“That’s a 14-month process by regulation,” Mr. Fishbein said during an earnings call. “So, there likely are some additional membership declines still in progress and still ahead of us. The primary result that’s affecting our results is not just the membership itself, but the fact that those who were no longer eligible for coverage were utilizing care at a meaningfully lower rate than those who remained in the programs.
Outside the U.S., the insurer also saw a drop in net income from individual insurance sales, down about $13-million overall for the quarter. The decline was driven by lower earnings after the sale of Sun Life UK in 2023, but offset by stronger sales in Asia, which were up $38-million for the quarter.
Sun life’s results are in contrast with those of Canada’s largest insurer, Manulife Financial Corp., which on Wednesday reported a jump in its first quarter “core earnings” of $1.75-billion, or 94 cents a share, compared with $1.53-billion or 79 cents a share in the first quarter of 2023.