Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q2 2023 Earnings Presentation
21 slides from Sun Life Financial's earnings presentation, Aug 9, 2023
Slide 1: Q2'23 financial & operating results
Q2’23 financial & operating results For the period ended June 30, 2023 Sun Life Financial Inc. (unaudited)
Slide 2: Forward-looking statements and note to readers
In this presentation, Sun Life Financial Inc. (“SLF” or “SLF Inc.”), its subsidiaries and, where applicable, its joint ventures and associates are referred to as “we”, “us”, “our”, “Sun Life” and the “Company”. Reported net income (loss) refers to Common shareholders' net income (loss) determined in
Slide 3: Kevin Strain
Kevin Strain President and Chief Executive Officer Sun Life – Q2 2023 3
Slide 4: Q2 2023 financial highlights
Q2 2023 financial highlights Delivering on our Purpose to help Clients achieve lifetime financial security and live healthier lives Executing on our ambition to be one of the best asset management and insurance companies globally Profitability Financial Strength Diversified Business Mix4 Year-to-dat
Slide 5: Progress on our Client Impact strategy
Progress on our Client Impact strategy Our Purpose: Help Clients achieve lifetime Leveraging our digital capabilities, recent acquisitions and partnerships to improve access to care financial security and live healthier lives Announced agreement to acquire Dialogue Health Technologies Inc., a prem
Slide 6: Manjit Singh
Manjit Singh Executive Vice President & Chief Financial Officer Sun Life – Q2 2023 6
Slide 7: Q2 2023 results
Q2 2023 results Profitability ($ millions) Q2’23 Q2’22 Change Results Highlights Wealth & asset management 419 420 (0)% Group - Health & Protection 360 238 +51% Earnings reflect strong business fundamentals and diversified business mix Individual - Protection • Wealth & asset management: higher inve
Slide 8: Q2 2023 results
Q2 2023 results Underlying net income1 ($ millions) Reported net income ($ millions) Impact of currency translation increased underlying net income by $27M2 Impact of currency translation increased reported net income by $25M2 476 372 295 296 299 298 248 215 210 175 134 150 149 118 122 7 0 (38) (113
Slide 9: MFS: A global leader in public asset management
MFS: A global leader in public asset management Business Group Results (US$) Quarterly Highlights (US$) Profitability Q2’23 Q2’22 Change • Underlying net income down 5% y/y reflecting lower ANA driven by lower Underlying net income1 ($ millions) 187 197 (5)% equity markets, net outflows and the impa
Slide 10: SLC Management: Growing a premier alternatives platform
SLC Management: Growing a premier alternatives platform Business Group Results Quarterly Highlights Profitability Q2’23 Q2’22 Change • Fee-related earnings (FRE) up 19% y/y on higher AUM, reflecting strong Fee-related earnings1 ($ millions) 62 52 +19% capital raising and deployment across the platfo
Slide 11: Canada: A leader in health, wealth, and insurance
Canada: A leader in health, wealth, and insurance Business Group Results Quarterly Highlights Profitability Q2’23 Q2’22 Change • Underlying net income up 24% y/y reflecting strong results in Group & Wealth & asset management ($ millions) 110 110 0% Individual businesses and resilient Wealth & asset
Slide 12: U.S.: A leader in health & benefits
U.S.: A leader in health & benefits Business Group Results (US$) Quarterly Highlights (US$) Profitability Q2’23 Q2’22 Change • Underlying net income up 57% y/y on strong performance in Group businesses Group - Health & Protection ($ millions) 149 103 +45% • Group - Health & Protection earnings up 45
Slide 13: Asia: A regional leader focused on fast-growing markets
Asia: A regional leader focused on fast-growing markets Business Group Results Quarterly Highlights (% in constant currency1) Profitability Q2’23 Q2’22 Change CC1 • Underlying net income up 25% y/y, driven by Individual - Protection Wealth & asset management ($ millions) 13 15 (13)% (15)% Individual
Slide 14: Appendix
Appendix Sun Life – Q2 2023 14
Slide 15: Drivers of earnings
Drivers of earnings Drivers of earnings (DOE)1 Reported1 Underlying1 $ millions, pre-tax Q2’23 Q2’22 Q2’23 Q2’22 Q2’23 DOE Highlights Risk adjustment release 103 95 103 95 Contractual service margin recognized for services Total net insurance service result: 192 175 192 175 provided • Expected insur
Slide 16: DOE experience gains/(losses) – details
DOE experience gains/(losses)1 – details2 Pre-tax Post-tax $ millions Q2’23 Q2’22 Q2’23 Q2’22 Net equity market impact2 (13) (134) (13) (100) Net interest rate impact2,3 (152) 346 (99) 156 Impact of changes in the fair value of investment properties2,3 (133) 70 (108) 62 Market-related impacts2 (298)
Slide 17: Contractual service margin movement analysis
Contractual service margin movement analysis $ millions, pre-tax Q2’23 Q2’22 CSM Highlights CSM at beginning of period 11,243 9,881 • Total CSM ended Q2'23 at $11.3 billion, up 14% y/y; ~6% of the increase driven by Impact of new insurance business1 270 189 organic CSM growth reflecting strong sales
Slide 18: Earnings on surplus – Supplemental details
Earnings on surplus – Supplemental details Earnings on surplus – supplemental details $ millions, pre-tax Q2’23 Q2’22 Core investment income 150 126 Realized investment gains / (losses) 20 (3) Other1 (5) 12 Earnings on surplus 165 135 Interest on debt (83) (60) Earnings on surplus net of debt cost 8
Slide 19: 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 20: Forward-Looking Statements
Forward-Looking Statements From time to time, the Company makes written or oral forward-looking statements within the meaning of certain securities laws, including the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities l
Slide 21: Footnotes
Footnotes From slide 4 2 New business CSM represents growth from sales activity in the period, including individual protection sales (excluding joint ventures), and defined benefit solutions and segregated fund wealth sales in Canada. 3 Life Insurance Capital Adequacy Test (“LICAT”) ratio of SLF Inc