Mixed Quarter for Sun Life as Improving Underwriting Is Largely Offset by Asset Management Softness

Sun Life had a mixed second quarter with just 1% underlying net income growth. Insurance results were generally decent while the asset management unit saw a 16% underlying constant currency profit decline amid equity market declines and lackluster flows. We will maintain our fair value estimate of $52 on the no-moat firm. We are adjusting our Morningstar Uncertainty Rating to Medium from High as we believe that more accurately reflects the risk in Sun Life’s shares.