Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Investor Presentation (April 2022)
12 slides from Sun Life Financial's investor presentation, Apr 19, 2022
Slide 1: Overview of earnings presentation and reporting under the new IFRS 17 accounting standard
Overview of earnings presentation and reporting under the new IFRS 17 accounting standard April 19, 2022 September 2021
Slide 2: Notice to the Reader
Notice to the Reader The information presented reflects the current interpretation of each company based on its individual facts and circumstances as of the date hereof. Such interpretation, or the underlying relevant facts and circumstances, may change and other companies may have different facts a
Slide 3: Table of Contents
Table of Contents 1. Key Messages 2. Liabilities upon Transition (illustrative) 3. IFRS 17 Income Statement (simplified view) 4. Drivers of Earnings (illustrative) 5. Non-GAAP Earnings Measure (illustrative) 6. CSM Movement Analysis 7. Notable KPI Definitions 8. Appendix A – Glossary 3
Slide 4: Key Messages
Key Messages 1. The adoption of a global accounting standard (IFRS 17, Insurance Contracts) is expected to enhance reporting of insurance business under IFRS as issued by the IASB 2. This is an accounting regime change. There are no changes to the underlying fundamentals of the business, or to the f
Slide 5: Liabilities upon Transition (illustrative)
Liabilities upon Transition (illustrative) IFRS 4 IFRS 17 Liability1 Liability1 Contractual Service Margin3 (CSM) is a new liability that CSM reflects future profits. CSM is released into earnings as Insurance PfADs2 insurance contracts are fulfilled as expected. Risk Adjustment Asset Risk PfADs2 Ri
Slide 6: IFRS 17 Income Statement (simplified view)
IFRS 17 Income Statement (simplified view) • Medium- and longer-term contracts include: IFRS 17 Income Statement • Expected claims and expenses; • Release of Risk Adjustment; and • Release of CSM Insurance revenue • Shorter-term contracts (i.e. PAA)1, include premium revenue Includes: Insurance serv
Slide 7: Drivers of Earnings, a non-GAAP measure (illustrative)
Drivers of Earnings, a non-GAAP measure (illustrative) Drivers of Earnings: Net Income Analysis Risk Adjustment Release • We (GWO, MFC, and SLF) expect to use the IFRS 17 CSM Amortization (includes amortization of assumption changes previously reported in CSM) income statement and Drivers of Earning
Slide 8: Non-GAAP Earnings Measure (illustrative)
Non-GAAP Earnings Measure (illustrative) Drivers of Earnings: Non-GAAP Earnings Measure Analysis Risk Adjustment Release CSM Amortization (includes amortization of assumption changes previously reported in CSM) • A non-GAAP earnings measure will continue to be Expected Insurance Earnings on insuranc
Slide 9: CSM Movement Analysis will be one of the key aspects of understanding the insurance results
CSM Movement Analysis will be one of the key aspects of understanding the insurance results CSM Movement Analysis (illustrative) • The CSM1 is an important metric for some insurance CSM Beginning of Period contracts, as it represents unearned profit and is expected to count as available capital for
Slide 10: Notable KPI Definitions
Notable KPI Definitions1 Metric Definition Non-GAAP Earnings Measure Please refer to Slide 8 for details. Non−GAAP Earnings Measure − Preferred Dividends − Other Equity Distributions Non-GAAP ROE Average Common Shareholders′ Equity Profitability Net Income IFRS 17 Net Income Net Income − Preferred D
Slide 11: Appendix A – Glossary (1/2)
Appendix A – Glossary (1/2) • Contractual Service Margin (CSM): A liability which is established at the outset of a contract to offset new business profits at issue1. The CSM liability is gradually amortized as services are provided. • Fair Value through Profit or Loss (FVTPL) and Fair Value through
Slide 12: Appendix A – Glossary (2/2)
Appendix A – Glossary (2/2) • Investment component: The amounts that an insurance contract requires the entity to pay a policyholder even if an insured event does not occur. • Loss Component: For contracts which have a loss at issue, a loss is recognized in earnings, and a loss component (a notional
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