(Reuters) - Canadian insurer Sun Life Financial Inc missed estimates for quarterly earnings on Wednesday, as weaker wealth sales hurt its performance in the domestic market.
Wealth sales, which include mutual and managed funds, fell 26 percent in Canada in the quarter compared with a year ago, while overall sales in the category fell about 10 percent to C$35.99 billion.
Underlying net income in the country fell 20 percent to C$237 million.
Insurers in Canada have increasingly looked to Asia for growth, selling to the region’s burgeoning middle class, and to diversify from domestic markets where competition is intense.
Kevin Strain, Sun Life’s global chief financial officer, told Reuters that a higher-than-expected mortality rate in Sun Life International and the exposure of U.S. utility company PG&E Corp, which filed for bankruptcy, were among the factors that weighed down on the earnings of International.
He said a shift in consumer preference away from universal insurance products because of rising interest rates also affected sales to HNI clients in the big markets of Hong Kong and Singapore.
“The preferences have shifted relatively quickly and we have been reacting quickly,” Strain said. The new fee-based products that the company has started to offer are more profitable over a longer period, Strain added.
Strain said Sun Life continued to look for acquisition opportunities in Asia but that any deal would need to meet the company’s return hurdles.
Net income, excluding one-off items, fell 5 percent in its Asia unit to C$122 million.
Overall net income, excluding one-time items, fell to C$717 million ($531.98 million), or C$1.20 per share, in the first quarter ended March 31 from C$770 million, or C$1.26 per share, a year reut.rs/2WDmV6B earlier.
On a per-share basis, Sun Life posted a profit of C$1.20 per share, while analysts had expected C$1.21, according to IBES data from Refinitiv.
Reporting by Denny Thomas in Toronto Bharath Manjesh in Bengaluru; Editing by Shinjini Ganguli and Peter Cooney