Sun Life CEO Dean Connor’s efforts to reposition the life insurer continue, as it appears he is contemplating a sale of the company’s U.K. business.
Such a move would not be as dramatic as his decision, just weeks after he stepped into the top job in December, to stop selling individual life insurance and variable-rate annuities in the United States. For one thing, the U.K. business is already in run-off; it has not sold any new policies since December of 2010 and its staff are there simply to help out those customers it already sold insurance to.
But a sale of the business would still mark another significant step towards Mr. Connor’s goal of streamlining the company based on its core geographic locations and product lines. Notably, those geographies are Canada, the U.S. and Asia. Not Europe.
Talk of a sale was reported by the British media outlet Sky News, which reported that the insurer has hired Morgan Stanley to auction the business.
In a note to clients, RBC Capital Markets analyst Andre-Philippe Hardy said that if the deal happens it would likely help the company’s capital ratios but hurt its profits.
Sun Life U.K. earned $153-million in 2011 and $177-million the year before. Using $160-million as a reference point, Mr. Hardy said the hit to the company’s earnings per share could be about 27 cents (his current EPS estimate for this year is $2.74).
Sky News reported that the unit could go for £1-billion.