Cutting Costs

At least one analyst is rethinking his third-quarter outlook for Canadian insurers after Sun Life announced it would book a half a billion dollar loss.

John Aiken of Barclays Capital says he’s revising estimates for the industry’s third quarter earnings.

Sun Life reported Monday that it will lose $621 million in the quarter ended Sept. 30—about $572 million of that from operations alone.

Aiken says the announcement highlights the difficulty that investors face in trying to determine potential earnings of Canadian insurers.

That’s because insurers are very sensitive to interest rate and stock market volatility, and have taken hits in recent quarters as economic uncertainty lingers.

Aiken is also revising his outlook for other Canadian insurers, including Manulife, which is the most sensitive to volatile markets among its peers.

He also lowered estimates for Great West Life by 6%.

Originally published on