Sun Life shares sink after profit disappoints, warns of US challenges

Sun Life Financial

13/02/2025 17:02

TORONTO, Feb 13 (Reuters) - Sun Life Financial's
 SLF.TO  shares fell 9% on Thursday after the Canadian insurer
reported quarterly profit below analysts' estimates and warned
its U.S. business would face challenges in 2025.
    The company said its U.S. business faced industry-related
difficulties, resulting in higher claims related to cancer
treatment or other severe conditions in its medical stop-loss
business. 
    Medical stop-loss insurance protects employers from large
claims that may exceed a set limit.
    The U.S. business, which contributes one-fifth of Sun Life's
earnings, recorded a 39% decline in underlying net income in the
fourth quarter. 
    Executives told analysts on a call on Thursday that the
company saw a "change in the severity of stop-loss claims" in
the fourth quarter and could raise prices this year to lessen
the impact. 
    "One quarter certainly does not make a trend, but weaker
results out of the U.S. in particular will feed into concerns,"
Scotiabank analyst Meny Grauman said in a note.
    The earnings miss is the second for Sun Life in fiscal 2024,
which was marked by a challenging time for its dental business
that it built through the acquisition of DentaQuest for $2.5
billion in 2022.

    

 (Reporting by Nivedita Balu in Toronto and Prakhar Srivastava
in Bengaluru; Editing by Rod Nickel)
 ((Nivedita.Balu@thomsonreuters.com; X: @niveditabalu;))