February 16, 2017 / 6:48 PM / 8 months ago

Canada's Sun Life sees benefits from Trump's pro-growth agenda

(Corrects CEO name in paragraph 5 to Dean Connor, not Dean Cooper)

The logo of Sun Life Financial is seen in Toronto May 6, 2015. REUTERS/Fred Thornhill/File Photo

TORONTO (Reuters) - Sun Life Financial (SLF.TO), expects to benefit from a more favorable interest rate and economic environment under new U.S. President Donald Trump, the chief executive of Canada’s third-biggest insurer said.

Shares in Sun Life have risen by 12 percent since Trump’s election win Nov. 8 and a subsequent rise in interest rates.

The stock has benefited from market expectations that pro-growth policies pursued by the new administration, such as a $1 trillion infrastructure spending program, will lead to higher employment and consumer spending and a return to a more inflationary environment following years of lackluster growth.

Higher interest rates are beneficial to insurance companies, which invest premiums they collect from customers in fixed income assets such as government bonds.

“Clearly, higher interest rates will benefit our business,” CEO Dean Connor said in an interview on Thursday after Sun Life reported quarterly results.

“More generally, assuming the economic climate continues to be positive in the States to the extent that it grows the employment base and payrolls, those are two drivers of growth in our group benefits business. The number of people we cover and the salaries that they’re covered for life insurance and disability grow and that would be a positive for us,” he said.

Reporting by Matt Scuffham; Editing by Alan Crosby

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