Sun Life Financial reported net income of $207 million for the fourth quarter, down 71 per cent from $728 million for Q4 2017. For the year 2017, net income stood at $2.15 billion, compared to $2.49 billion in 2016.
Sun Life posted a return on equity of 4.1 per cent for Q4 2017, compared to 14.8 per cent for the same period a year earlier. For the year 2017, ROE stood at 10.7 per cent, down from 13.0 per cent for 2016.
U.S. tax reform
The company’s reported net income for the fourth quarter was hit by a net charge of $251 million ($444 million pre-tax) related to U.S. tax reform. Sun Life’s reported net income also includes a restructuring charge of $44 million ($60 million pre-tax), related to actions to enhance business processes and organizational structures and capabilities.
SLF Canada’s results
SLF Canada's reported net income was $172 million for Q4 2017, down 57 per cent compared to the same period in 2016. Sun Life says this decline largely reflects “unfavourable market impacts driven predominantly by a decline in interest rates, as well as impacts from adverse assumption changes and management actions.”
Insurance sales decrease by 26 per cent
Insurance sales dropped by 26 per cent. This is “mainly due to a decrease in individual insurance sales compared to strong sales in the fourth quarter in 2016 in anticipation of the Canadian life insurance tax legislation changes that came into effect on January 1,” says the company.
Group Benefits sales were in line with Q4 2016, reaching $10 billion of business in-force. Wealth sales declined by 32 per cent compared to Q4 2016, mainly due to a large-case sale in Group Retirement Services in 2016, while individual wealth sales were in line with the prior year, says the company.