“Over the previous decade we’ve remodeled the US enterprise from a principally retail particular person life and annuities enterprise to a high-performing market main advantages enterprise,” stated Dan Fishbein, president, Sun Life Financial US. “The DentaQuest acquisition continues this evolution, altering the footprint of our enterprise within the US into a bigger, extra healthcare-focused group, now with greater than 70% of our advantages income coming from healthcare.
“These adjustments have transitioned Sun Life US from a capital-intensive to a capital-light enterprise with sturdy money circulation technology; from companies with long-term danger profiles to principally short-term danger and fee-based companies; from slow-growth markets to increased progress markets; and from return on fairness (ROE) within the single digits to a return on tangible fairness within the excessive teenagers.”
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Headquartered in Boston and based in 2001, DentaQuest introduced greater than 33 million members in 36 states and greater than 2,400 staff throughout to Sun Life US. At the time of acquisition, it was the most important supplier of US Medicaid dental advantages, with rising Medicare Advantage, business, and US Affordable Care Act (ACA) change companies.
The management staff for the mixed dental advantages enterprise below Sun Life US consists of a mix of DentaQuest and Sun Life leaders, all of whom are targeted on progress methods, income synergies, and optimizing efficiency, in keeping with Fishbein.
“We’re approaching integration with nice care and our aim is to understand the complete potential of the transaction for all our stakeholders, together with offering enhanced choices for shoppers, delivering our accretion and value financial savings targets for shareholders, creating new alternatives for our staff, and delivering a optimistic integration expertise for all,” he defined.
“We have a powerful observe file of efficiently integrating group advantages companies, whereas minimizing disruption for our shoppers. Many of the leaders who managed the Assurant integration are concerned within the DentaQuest integration. We are targeted on integration actions that may help our run fee price financial savings goal of $60 million by 2024. We’re off to a powerful begin with a completely built-in management staff, engaged staff, and an in depth plan for the remaining steps.”
Sun Life US introduced its second quarter 2022 monetary outcomes on August 3, during which it reported insurance coverage gross sales of $213 million, up 12% year-over-year, pushed by increased dental and medical stop-loss gross sales. The enterprise reported internet revenue of $213 million, up by 36%, or $56 million, from the prior yr interval, however partially offset by prices associated to the DentaQuest acquisition.
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When Sun Life first introduced the DentaQuest deal, it gave an accretion projection of an extra 42 foundation factors to underlying ROE in 2022 on an annualized foundation. In 2024, upon realization of expense synergies, Sun Life expects the acquisition so as to add roughly 50 foundation factors to underlying ROE.
“The underlying earnings for DentaQuest within the one month [June 2022] was $10 million,” stated Fishbein. “We’re nonetheless assured within the accretion projections that we made once we introduced the transaction, and definitely, the leads to June would help that. We did see increased margins in June than maybe we anticipated, and just a little decrease revenues, however the increased margins greater than made up for the small variance in revenues. Overall […] this primary month provides us confidence in our prior projections.”
Fishbein stated he’s excited in regards to the future at Sun Life US, including: “We now have 4 sturdy companies with market main positions in dental and stop-loss, and a prime 10 worker advantages enterprise. Although latest outcomes have been considerably masked by COVID impacts, as soon as this subsides, we stay assured in reaching our medium-term targets for the US, together with 10% or extra earnings progress for our advantages companies.”