Focus on the Asian operation, growing asset management businesses and a strong financial position continue to drive the third-largest insurer in Canada.` Shares of Sun Life have rallied 25.1% year to date (YTD) compared with the industry’s increase of 5.5%. Suzette Huovinen, CEO of Canadian Premier stated, "This is an exciting milestone for our company as we look to serve more Canadians through our affinity groups and creditor insurance businesses.” Thus, the acquisition is a strategic fit as it expands the association, affinity and group creditor businesses of Canadian Premier. Thus, the acquisitions will enhance its core creditor insurance portfolio, exposure to the adjacent markets in the association and affinity business and, in turn, strengthen its market presence.
How Does the Acquirer Stand to Benefit?Ĭanadian Premier, a subsidiary of Securian Financial Group, Inc., has a track record of providing insurance solutions to its Canadian clients, including financial institutions, retailers, affinity groups and distribution partners for more than six decades. However, underlying earnings per share are likely to decrease 3 cents annually. Sun Life expects a one-time after-tax gain of about $65 million and a 1% increase in SLF and SLA LICAT ratios. Thus, the divestiture is in tandem with its growth strategy. Sun Life is also growing its voluntary benefits business (launched new products in this line) and targeting a place among the top five players. Being the largest group benefits provider in the country, this Zacks Rank #3 (Hold) insurer is shifting its growth focus toward products that require lower capital and offer more predictable earnings such as mutual funds and group benefits. The divestiture will help Sun Life intensify its focus on growing the core segments within the group benefits business. Per the divestiture deal, 100 plan sponsors and about 1.5 million insured clients and plan members/customers of Sun Life will go to Canadian Premier. The sponsored markets business includes association, affinity, and group creditor clients. Subject to the fulfillment of closing conditions, the transaction is expected to see the light of day in early 2023.
Sun Life Financial Inc.’s SLF wholly owned subsidiary, Sun Life Assurance Company of Canada (SLA) has agreed to divest the sponsored markets business to Canadian Premier Life Insurance Company.