As the Canadian financial institutions work hard to expand their global footprint, I would like to draw your attention to Sunlife Financial (NYSE:SLF), a firm moving at a fast pace to create deep inroads in the North American and Asian markets.
Sunlife Financial recently came up with their third-quarter figures recording an impressive growth in revenue from both insurance and wealth products. While the wealth segment recorded a year-over-year growth of 25%, insurance too recorded a modest 6% growth from prior year figures.
Moving forward, Sunlife Financial successfully concluded the sale of its U.S. annuity business, a move that will allow the company to significantly reduce its risk exposure and, at the same time, focus its energy and capital on the four pillars of growth.
Moreover, in a bid to further push margins and expand the top line, the company has undertaken rapid transformational changes ranging from an improved customer and broker support model to moving sales representatives closer to the broker it serves.
A clear and focused approach showcased by the company in getting rid of unproductive assets, maintaining a strong capital base and streamlining its businesses in line with its long-term four-prong strategy has clearly sent the right signals to the market, evidenced by the upward revision of the company's stock price target by major financial institutions like CIBC and Barclays.
Manulife Financial (NYSE:MFC) is a market leader in the life insurance segment in Canada and a significant competitor to Sunlife Financial. The most recent quarter saw the company deliver strong growth in core earnings to the tune of $677 million, a year-over-year growth of 18%, approximately. The company's top line recorded a 4% growth in the insurance segment and 34% growth in the wealth management segment owing to a strong performance in the Asian markets.
Moving ahead, in line with its long-term strategy to expand its asset management business, the company has setup Manulife Asset Management Private Markets, with a view to offer solutions to customers in the private asset class.
With the global economy still in the recovery phase, Manulife has streamlined its exposure to equity markets and reduced its exposure to interest rate risks. The company has also revised its product offering to focus on business areas that are relatively less capital-intensive.
Another insurance firm high on my list of preferred stocks in the insurance sector is Kemper Corporation (NYSE:KMPR).
A strong growth in the bottom line driven by rising interest income and better-than-expected performance in the property and casualty insurance segment gave a significant boost to the bottom line as the company reported a non-GAAP EPS of $0.69 for the third quarter, a growth of 64% from a year earlier.
Moving ahead, with over $50 million contributed to shareholders' kitty via dividends and stock buybacks, the company has been extremely generous to shareholders.
Lastly, the sustained efforts of the company to run down on its insurance, interest, and other expenses, and improved performance on the back of lower policyholders' benefits, also contributed heavily to the overall performance of the company in the most recent quarter.
Moving forward, I believe the company looks set to be a steady performer and poised for the long haul.
A sustained and strong growth in key operational segments, rapid penetration in the vast Asian markets, and with a safety net evidenced by regulatory capital percentages well beyond the stated regulatory minimum capital established by the statute all point toward a well-rounded business.
Considering the above factors, I rate the following companies very high on my list of choices and consider them worthy additions to an investor's portfolio.