Sun Life’s (SLF) Recent Buyout Aids Stop-Loss & Health Business

Sun Life Financial Inc. SLF has acquired Pinnacle Care International (PinnacleCare). The insurer had agreed to buy this leading U.S. health-care navigation and medical intelligence provider in April 2021 for $85 million. The addition of Pinnacle Care will consolidate Sun Life’s U.S. Stop-Loss & Health business.

Founded in 2001, Maryland based PinnacleCare is a leading U.S. provider of medical intelligence and healthcare navigation services for people with serious medical conditions. The company supports more than two million lives.

Sun Life’s U.S. Stop-Loss & Health business boasts being the largest independent stop-loss provider in the country. Thus, PinnacleCare’s services will help the acquirer improve health outcomes, and cost management, while lowering stop-loss claims of its clients. Infact, Sun Life intends to extend PinnacleCare’s services to its other U.S. benefits plans.

PinnacleCare, meanwhile, stands to benefit from Sun Life’s extensive distribution network to reach out to more customers.

Sun Life considers acquisitions a prudent approach to ramp up its growth profile. Strategic buyouts have positioned it as the second-largest dental network in the United States, consolidated its footprint in Vietnam, Indonesia and India, and expanded its wealth business in Hong Kong. The acquisition of majority stake in BentallGreenOak, which added to its real-estate capabilities; buyout of the majority stake in InfraRed that boosted the investment solutions of Sun Life’s alternatives asset management business; and the acquisition of a majority stake in Crescent Capital Group, marking its investment in the private credit domain and ensuring a greater yield, are its other strategic endeavors.

Shares of the Zacks Rank #3 (Hold) third largest insurer in Canada have rallied 16.5% year to date, outperforming the industry’s increase of 4.7%. Focus on expansion of its Asia business and global asset management business, favorable business mix, strategic acquisitions and solid capital position should help the stock sustain momentum.

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There have been a host of acquisitions in the insurance space of late, given significant capital availability. Recently, Arthur J. Gallagher & Co. AJG acquired the remaining shares of Edelweiss Gallagher Insurance Brokers Limited while First American Financial Corporation FAF acquired Georgetown Title. Brown & Brown, Inc. BRO acquired substantially all Piper Jordan assets.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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