Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q3 2024 Earnings Presentation
40 slides from Sun Life Financial's earnings presentation, November 2024
Slide 1: Q3'24 Delivering sustainable shareholder value
Q3’24 Delivering sustainable shareholder value
Slide 2: Agenda
• Business overview • Strategic overview • Business group results & highlights • Capital management • Asset portfolio Sun Life – Q3 2024 2
Slide 3: A leading global financial services organization
A leading global financial services organization Balanced & diversified $1.51T business model2 85M+ 58,200 91,700 Offices in Assets Under $45.2B Year-to-date at September 30, 2024 Clients3,4 Employees3,5 Advisors3,6 28 markets3 Management market cap7 (AUM)1,7 Group - Health & Protection 29% Wealth &
Slide 4: The Sun Life story
The Sun Life story • A diversified business model, with four well-positioned business groups, focused on creating value and positively impacting our Clients, employees and shareholders • Portfolio of businesses that have strong growth prospects and capital generation in attractive global markets • S
Slide 5: Leveraging global trends
Leveraging global trends • Individual and employer attention on physical and mental health • Demographic shifts in developed markets • Increased economic, market and geopolitical volatility • Gig economy and shift in nature of work • Digital acceleration • Adoption of digital health technologies • G
Slide 6: Agenda
• Business overview • Strategic overview • Business group results & highlights • Capital management • Asset portfolio Sun Life – Q3 2024 6
Slide 7: Executing on our ambition to be one of the best asset management and insurance companies
Executing on our ambition to be one of the best asset management and insurance companies in the world Our Purpose: Help Clients achieve lifetime financial security and live healthier lives Our Values: Caring, Authentic, Bold, Inspiring, Impactful Four Pillars Client Impact Strategic Imperatives A gl
Slide 8: Consistently delivering value to shareholders
Consistently delivering value to shareholders 5-year annualized total shareholder return2 Performance against medium-term financial objectives At September 30, 2024 Medium-term financial objective3,4 Q3’24 2-Year3,5 Sun Life 10.2% Underlying EPS growth1 11% 11% 8-10% Canadian Lifecos 15.8% Underlyin
Slide 9: Our Sustainability Plan brings our Purpose to life
Our Sustainability Plan brings our Purpose to life Aligned to our Purpose, we’re focused on the areas where we can have the greatest impact: Increasing Fostering Advancing financial security healthier lives sustainable investing • We aspire to increase the • We aspire to improve health and • We mana
Slide 10: Sustainability highlights show progress against our plan
Sustainability highlights show progress against our plan • 2.4 million lives covered through affordable insurance policies issued in Asia1 Increasing financial • Drove $2.4 billion in insurance coverage and $706 million in wealth deposits in Canada through proactive and personalized security nudges
Slide 11: Digital leadership
Digital leadership Q3 2024 highlights We are operating like a digital company focused on: Enhanced claims connectivity in the U.S. • Enhanced claims connectivity across our disability, supplemental health, stop-loss and dental products in the third quarter Digital Experiences • When a member has mor
Slide 12: Distribution excellence
Distribution excellence Distribution across the four pillars AM • MFS partners with leading retail intermediary firms and global institutional consultants Omni-channel approach • SLC Management distributes products through affiliates Crescent Capital, to serving Clients, including BentallGreenOak, I
Slide 13: Agenda
• Business and strategic overview • Strategic overview • Business group results & highlights • Capital management • Asset portfolio Sun Life – Q3 2024 13
Slide 14: Q3 2024 results
Q3 2024 results Profitability Q3’24 Q3’23 Change Results Highlights Underlying net income1 ($ millions) 1,016 930 +9% Strong financial performance, reflecting strength of diversified business: Reported net income ($ millions) 1,348 871 +55% • Wealth & asset management: up 4% y/y on higher fee income
Slide 15: Q3 2024 results
Q3 2024 results Underlying net income1 ($ millions) Reported net income ($ millions) Impact of currency translation increased underlying net income by $11M2 Impact of currency translation increased reported net income by $22M2 AM CAN U.S. ASIA CORP AM CAN U.S. ASIA CORP 375 644 344 330 338 219 185 1
Slide 16: Asset Management: A global leader in public and alternative asset classes
Asset Management: A global leader in both public and alternative asset classes through MFS and SLC Management Business Group Results (C$) Q3 2024 strategic highlights Profitability Q3’24 Q3’23 Change MFS Underlying net income1 ($ millions) 344 330 +4% • MFS continues to experience solid fixed income
Slide 17: MFS overview
Wealth & asset management RETAIL INSTITUTIONAL TOTAL MFS US$443B AUM1 US$202B AUM1 US$645B AUM1 Distributed through financial advisors Partner with leading consultants to manage MFS is a strong strategic and financial affiliated with brokerage houses, financial assets for public and corporate pensio
Slide 18: SLC Management overview
Wealth & asset management Real Estate IG Credit Alternative Credit Infrastructure Distribution $88B AUM1,2 $66B AUM1,2 $56B AUM1,2 $17B AUM1,2 $3B AUM1,2,3 Top global ranking in the Invests across spectrum Seeks investments in high- 230+ infrastructure One of the largest ⬤ ⬤ ⬤ of investment grade qu
Slide 19: Canada: A leader in health, wealth, and insurance
Canada: A leader in health, wealth, and insurance Business Group Results Q3 2024 strategic highlights Profitability Q3’24 Q3’23 Change • Launched MyRetirement Income, an innovative first for Canadians that Wealth & asset management ($ millions) 101 116 (13)% aims to provide retirees with a reliable
Slide 20: Canada business overview
Wealth & asset Individual - Group - Health management Protection & Protection Group Retirement Services (GRS) Individual Wealth Individual Insurance Sun Life Health $152B AUM1,3,4 $33B AUM1,3,4 $5.9B Net premiums1,5 $6.4B Net premiums1,5 Canada ~1M Canadians2,3 ~0.7M Canadians2,3 ~2M Canadians2,3 ~1
Slide 21: U.S.: A leader in health and benefits
U.S.: A leader in health and benefits Business Group Results (US$) Q3 2024 strategic highlights Profitability Q3’24 Q3’23 Change • We recently reached a milestone as the largest dental benefits Group - Health & Protection ($ millions) 127 112 +13% provider in the U.S.4 with approximately 35 million
Slide 22: U.S. business overview
Group - Health Individual - & Protection Protection Dental Health Group Individual US$3.2B Revenues1,3 US$2.6B Revenues1,3 US$2.3B Revenues1,3 US$16.3B AUM1,7 ~35M Members ~8M Members ~9M Members ~0.2M Members Largest Dental benefits Largest independent Stop- Top ten U.S. Group Life Closed blocks of
Slide 23: Asia: A regional leader focused on fast-growing markets
Asia: A regional leader focused on fast-growing markets Business Group Results Q3 2024 strategic highlights Profitability Q3’24 Q3’23 Change CC1 • Launched a new product4 for high-net-worth Clients, which Individual - Protection ($ millions) 158 175 (10)% (11)% addresses a market need for long-term
Slide 24: Asia business overview
Philippines Hong Kong Vietnam Indonesia $269M ins. sales1,2 $740M ins. sales1,2 $115M ins. sales1,2 $62M ins. sales1,2 • 1st in total premiums1,3 for • 3rd in MPF net inflows and • 9th in insurance sales and 5th Asia 13 consecutive years 3rd based on AUM1,6 in bancassurance sales1,8 • 14th in insura
Slide 25: Agenda
• Business overview • Strategic overview • Business group results & highlights • Capital management • Asset portfolio Sun Life – Q3 2024 25
Slide 26: Capital model provides financial flexibility
Capital model provides financial flexibility SLF Inc. LICAT1 152% SLF Inc. - External Capital Securities Subord inated Debt Coupon Pr inc ipal. SM Par Call Dat e SLF Series2007- 1 5.40% $400 29-May-37 SLF Series2020-1 2.58% $1,000 10-May-27 SLF Series2020-2 2.06% $750 1-0ct-30 SLF5eries2021-1 2.46%
Slide 27: Capital strength & flexibility
Capital strength & flexibility • Target minimum cash and other liquid assets at the holding company of $500 million1,2,3 Q3’24 Capital Q3’24 Capital metrics SLF Inc. ($ millions) Deployment opportunities LICAT4 152% Subordinated debt5 6,177 • Organic investments Financial leverage ratio1 20.4% Innov
Slide 28: M&A activity reflects strategic priorities
M&A activity reflects strategic priorities • Activity over last ten years promotes growth in Asia and Asset Management and builds out group benefits/dental capabilities in the U.S. Asset Management Canada U.S. Asia 2023 – Divestiture 2016 – Acquisition of 2016 – Expanded 2016 – Expanded 2018 – of th
Slide 29: Agenda
• Business overview • Strategic overview • Business group results & highlights • Capital management • Asset portfolio Sun Life – Q3 2024 29
Slide 30: High quality, well-diversified investment portfolio
High quality, well-diversified investment portfolio Investment profile Debt securities by credit rating • 75% of the portfolio is fixed As of September 30, 2024 As of September 30, 2024 income; 97% of fixed income BB and lower rated investment grade1 BBB- 1% Equity BBB 2% AAA Investment securities 1
Slide 31: Mortgages and investment property exposures
Mortgages and investment property exposures Mortgages by type and geography1 Mortgages by type and rating1,3 As of September 30, 2024 As of September 30, 2024 Multi-family % of Multi-family ($millions) Office Industrial Retail Other Total ($millions) Office Industrial Retail Other Total residential
Slide 32: Appendix
Appendix Sun Life – Q3 2024 32
Slide 33: Ratings and recognitions in Sustainability
Ratings and recognitions in Sustainability For the 15th consecutive year, Sun Life has earned a spot on the Corporate Knights’ 2024 Global 100 Most Sustainable Corporations in the World. Awarded a Platinum level Parity CertificationTM by Women in Governance. This certification recognizes organizatio
Slide 34: Market sensitivities
Market sensitivities Change in Private and Public Equity Markets1,2,3 Change in Credit Spreads3,8 As at September 30, 2024 25% 10% 10% 25% As at September 30, 2024 As at December 31, 2023 ($millions, unless otherwise noted) decrease decrease increase increase ($millions, unless otherwise noted) 50 b
Slide 35: Forward-Looking Statements
In this document, Sun Life Financial Inc. (“SLF” or “SLF Inc.”), its subsidiaries and, where applicable, its joint ventures and associates are collectively referred to as “we”, “us”, “our”, “Sun Life” and the “Company”. Reported net income (loss) refers to Common shareholders' net income (loss) dete
Slide 36: Use of Non-IFRS Financial Measures
Use of Non-IFRS Financial Measures We report certain financial information using non-IFRS financial measures, as we believe that these measures provide information that is useful to investors in understanding our performance and facilitate a comparison of our quarterly and full year results from per
Slide 37: Footnotes
Footnotes From slide 3 2 Business Mix based on underlying net income, excluding Corporate expenses and other. Wealth & asset management includes MFS Investment Management, SLC Management, Canada Individual Wealth, Group Retirement Services, Asia Wealth & asset management. Group – Health & Protection
Slide 38: Footnotes continued
Footnotes continued From slide 16 2 MFS pre-tax gross operating margin was 36.5% in Q3 2024 and 36.4% in Q3 2023. 3 Based on a trailing 12-month basis. 4 Does not include the General Account. SLC total AUM including the General Account was $387 billion at September 30, 2024. From slide 17 2 As at De
Slide 39: Footnotes continued
Footnotes continued From slide 24 2 FY2023 Individual – Protection sales. These include the sales in the company’s joint ventures and associates with local partners in Asia based on our proportionate equity interest. 3 Insurance Commission of the Philippines, based on Q2 2024 year-to-date total prem
Slide 40: Sun Life Investor Relations
Sun Life Investor Relations David Garg Senior Vice-President, Capital Management and Investor Relations 416-408-8649 david.garg@sunlife.com Paul Poon Assistant Vice President, Investor Relations 416-305-3389 paul.poon@sunlife.com Sun Life – Q3 2024 40