“Over the past decade, we have transformed the US business from a predominantly retail individual life and annuity business to an efficient, market-leading benefits business,” said Dan Fishbein, president of Sun Life Financial US. “The acquisition of DentaQuest continues this evolution by transforming our business footprint in the US into a larger, more healthcare-focused organization with more than 70% of our revenue coming from healthcare.”
“These changes have transformed Sun Life US from a capital-intensive business to a low-capital, high-cash-flow business; from long-term ventures to mostly short-term ventures and fee-based ventures; from slow growth markets to faster growing markets; and from single-digit return on equity (ROE) to teenage ROE.
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Headquartered in Boston and founded in 2001, DentaQuest has attracted more than 33 million members in 36 states and more than 2,400 employees to Sun Life US. At the time of the acquisition, it was the largest US Medicaid dental provider with a growing Medicare Advantage, commercial and US Affordable Care Act (ACA) exchange business.
According to Fishbein, Sun Life US’ combined dental care business leadership team includes leaders from DentaQuest and Sun Life, all focused on growth strategies, revenue synergies and operational optimization.
“We are approaching the integration very cautiously and our goal is to realize the full potential of the transaction for all of our stakeholders, including delivering enhanced offerings to customers, meeting shareholder growth and cost savings goals, creating new opportunities for our employees, and providing a positive integration experience for all,” he explained. he.
“We have a strong track record of successfully integrating the group’s benefit businesses while minimizing disruption to our customers.” Many of Assurant’s integration management leaders are involved in the DentaQuest integration. We are focused on integration activities that will help us through 2024. to save 60 million USD target. We’re off to a strong start with a fully integrated leadership team, engaged employees and a detailed plan for the rest of the steps.
Sun Life US August 3 announced its second 2022 financial results of the quarter, in which insurance sales reached 213 million USD, up 12% year-over-year, driven by higher sales in dentistry and medicine. The company reported net income of $213 million. USD, ie 36%, or 56 million. USD, up from last year, but partially offset by costs related to the DentaQuest acquisition.
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When Sun Life first announced the DentaQuest deal, it was forecast to be in 2022. annual ROE will increase by another 42 basis points. Sun Life expects the acquisition to be accretive to underlying ROE by approximately 50 basis points in 2024 after realizing cost synergies.
“Main earnings of DentaQuest in one month [June 2022] was $10 million,” Fishbein said. “We remain confident in the growth forecasts we made when we announced the deal, and of course the June results will confirm that.” In June, we saw higher margins than we might have expected and slightly lower revenues, but the higher margins more than made up for the slight difference in revenues. Overall […] this first month gives us confidence in our previous predictions.
Fishbein said he is excited about the future of Sun Life US, adding, “We now have four strong companies with leading positions in dental and stop-loss and a top 10 employee benefits business. While recent results are somewhat obscured by the impact of COVID, once it subsides, we remain confident of achieving our medium-term targets in the US, including 10% or more profit growth for our benefit companies.