Canada’s Sun Life Financial (NYSE:SLF) reported a better-than-expected quarterly profit on Monday, helped by growth in its wealth and asset management unit and higher fees.
However, the insurer reported a decline in underlying earnings, hurt by weakness in the United States and lower sales of personal health insurance.
Sunlife has been diversifying its business around the world and expanded its US presence with the $2.5 billion acquisition of DentaQuest last year.
Sales of dental insurance in the US fell 75% in the reported quarter, hurt by the impact of Medicaid renewals following the end of the public health emergency and investments in the Advantage Dental+ business, Sun Life said.
“The dental business reported middling results this quarter… short-term volatility is part of this business, from a long-term perspective the investment should be positive,” said Morningstar analyst Suryansh Sharma.
The company said it had expanded its Teledentistry.com partnership to include DentaQuest in the US, and expects to provide access to oral and dental care for around 3.5 million people across 20 states.
The results follow those of larger rival Manulife, which also beat earnings estimates, boosted by insurance sales in Asia and higher investment income amid rising interest rates.
Sun Life said underlying earnings from its US segment fell 19%. Underlying net income from wealth and asset management rose 9% to C$457 million.
The insurer posted underlying net income of C$930 million ($673.72 million), or C$1.59 per share, for the three months ended 30 September, compared with C$949 million, or C$1.62 per share, a year earlier.
Analysts were expecting C$1.57 per share, according to LSEG estimates.
