“Over the past decade, we have transformed the US business from a primarily personal life insurance and annuity business into a powerful, market-leading profits business,” said Dan Fishbein, President of Sun Life Financial US. “The acquisition of Dentaquest continues that growth and transforms our US business presence into a larger, more healthcare-focused organization, with more than 70% of our profits now coming from healthcare.
“These changes have transformed Sun Life US from a capital-intensive company to a capital-poor company with strong cash flow generation; from long-term risky trades to mostly short-term risky and fee-based trades; to slow-growing markets. to high growth markets; and from single digit return on equity (ROE) to tangible return on equity in the high teens.
Continue reading: Sun Life Q2. reported mixed financial results in
Headquartered in Boston, DentaQuest was founded in 2001 and has brought more than 33 million members and more than 2,400 employees to Sun Life US in 36 states. At the time of the acquisition, it was the largest provider of US Medicaid dental benefits with growing Medicare Advantage, Commercial and US Affordable Care Act (ACA) exchange businesses.
According to Fishbein, the leadership team for the combined dental benefits business under Sun Life US is a mix of executives from Dentaquest and Sun Life, all focused on optimizing growth strategies, revenue synergies and performance.
“We are moving toward the integration with great care and aim to realize the full potential of the transaction for all of our stakeholders, including delivering enhanced offerings to customers, our growth and cost savings goals to shareholders. This includes creating new opportunities for our employees and providing a positive inclusion experience for all,” he explained.
“We have a strong track record of successfully integrating businesses for group benefits while minimizing disruption to our customers. Many of the executives who manage the Assurant integration are involved with the DentaQuest integration. We are focused on integration activities that will support our ongoing cost savings goal of $60 million by 2024. We are off to a strong start with a fully integrated leadership team, committed people and a detailed plan for the remaining phases. ,
Sun Life US reported second-quarter 2022 financial results on Aug. 3, which reported insurance sales of $213 million, up 12% year-over-year, reflecting higher stop losses in dental and medical field. sales driven. The company reported net income of $213 million, up 36% from the prior-year period or $56 million, but was partially offset by costs related to the DentaQuest acquisition.
Continue reading: Met Life is meeting analysts’ expectations for strong premiums and fees
When Sun Life first announced the DentaQuest deal, it was forecasting growth of an additional 42 basis points to underlying ROE in 2022 on an annualized basis. In 2024, after receiving cost synergies, Sun Life expects the acquisition to add approximately 50 basis points to underlying ROE.
“DentaQuest’s underlying earnings in one month [June 2022] was $10 million,” Fishbein said. “We remain confident in the growth projections we made when announcing the transaction and the June results will clearly support that. In June we saw higher margins than we expected and slightly lower earnings, but a more than high margin for a small difference in. Overall […] This first month gives us confidence in our previous estimates. ,
Fishbein said he is excited about the future of Sun Life US, adding, “We now have four strong businesses with market leading positions in dental and stop loss and a top 10 employee profit business. While our results have been somewhat impacted by the impact of COVID, we remain confident of achieving our mid-term US targets, including earnings growth of 10% or more for our for-profit companies once they slow. included.”
source
