Lower acquisition costs and digital offerings helped Sun Life Financial Inc. deliver a 10 per cent increase to its third-quarter net profit.
The Toronto-based insurer reported after markets closed Wednesday a net profit of $750 million or $1.28 per share for the period ended Sept. 30, up from $681 million or $1.15 per share during the third quarter of 2019.
Sun Life said the results were driven by favourable market conditions, which allowed it to scoop up a stake in U.S. credit investment company Crescent Capital Group LP for $338 million.
It also found benefits from removing the in-person element of some sales in Vietnam, offering remote and online medical exams in the Philippines and speeding up virtual transactions across all markets to accommodate a rise in people working from home to quell the spread of COVID-19.
“Well before the pandemic, we made it a priority to invest in digital data and analytics with the goal of enhancing the client experience and putting our clients at the centre of everything we do, and that has accelerated over the past year,” Sun Life chief executive officer Dean Connor told analysts on a call Thursday.
“We will use this time to continue to accelerate everything digital and continue to obsess about looking after our clients.”
His remarks came as Sun Life said underlying net income was $842 million or $1.44 per share, compared with $809 million or $1.37 per share in the prior year.
Sun Life was expected to report $1.28 per share in adjusted profits, according to the financial markets data firm Refinitiv.
The results pushed Sun Life’s stock up by almost three per cent or $1.44 to reach $56.40 by close.
The company has seen several shifts in consumer behaviour throughout the last year as the COVID-19 pandemic continues to ravage the globe.
With many people are working from home and limiting trips out, more people have been putting non-urgent or elective medical procedures on hold. Some have even skipped visits to the doctor or dentist, resulting in fewer claims for insurers to process and pay out.
Insurers have found the pandemic offers a good opportunity to highlight the protections they offer, but with many Canadians experiencing job losses and income reductions, not everyone is immediately interested in insurance.
Sun Life’s insurance sales were down $4 million to $681 million.
In Canada alone, they slid to $147 million, a decrease of 28 per cent or $57 million compared to the same quarter last year.
The quarter was also marked by the company covering more than $140 million in claims for those who succumbed to COVID-19, said Connor.
Millions were paid out to people with other pandemic-related health needs too, he added.
“Looking ahead, the course and duration of the pandemic is, of course, uncertain, but what’s not uncertain is that we are well-positioned to manage risk and grow the business.”