Slide 1: Q4'23 Delivering sustainable shareholder value
Q4’23 Delivering sustainable shareholder value
Slide 2: Agenda
• Business overview • Strategic overview • Business group results & highlights • Capital management • Asset portfolio Sun Life – Q4 2023 2
Slide 3: A leading global financial services organization
A leading global financial services organization Balanced & diversified $1.40T business model2 85M+ 58,200 91,700 Offices in Assets Under $40.2B FY2023 as at December 31, 2023 Clients3,4 Employees3,5 Advisors3,6 28 markets3 Management market cap7 (AUM)1,7 Group - Health & Protection 32% Wealth & ass
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 – Q4 2023 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 Four Strategic Pillars Our Purpose Strategic Imperatives Help Clients achieve lifetime financial security and live healthier lives AM A global leader in both public • Develop deep Client relationshi
Slide 8: Consistently delivering value to shareholders
Consistently delivering value to shareholders 5-year total shareholder return2 Performance against medium-term financial objectives December 31, 2023 Medium-term financial objective3,4 Q4’23 2-Year3,5 Sun Life 13.2% Underlying EPS growth1 11% 11% 8-10% Canadian Lifecos 16.5% Underlying ROE1 18.4% 17
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 $706 million in wealth deposits in Canada through proactive and security personalized nudges
Slide 11: Digital leadership
Digital leadership Q4 2023 highlights Thinking and acting more like a digital company focused on: Showcasing our commitment to acting more like a digital company • 63% of our Clients have a digital relationship with Sun Life and 39% of processes or transactions are straight-through processing-enable
Slide 12: Distribution excellence
Distribution excellence Distribution across the four pillars AM • MFS partners with leading retail intermediary firms and global institutional consultants Omni-channel approach • SLC Management distributes products through affiliates Crescent Capital, to serving Clients, including BentallGreenOak, I
Slide 13: Agenda
• Business and strategic overview • Strategic overview • Business group results & highlights • Capital management • Asset portfolio Sun Life – Q4 2023 13
Slide 14: Q4 2023 results
Q4 2023 results Profitability Q4’23 Q4’22 Change Results Highlights Underlying net income1 ($ millions) 983 892 +10% Reported net income ($ millions) 749 1,165 (36)% Earnings reflect strong business fundamentals and diversified business mix • Wealth & asset management (+7% y/y): includes higher Asse
Slide 15: Q4 2023 results
Q4 2023 results Underlying net income1 ($ millions) Reported net income ($ millions) Impact of currency translation increased underlying net income by $2M2 Impact of currency translation increased reported net income by $3M2 AM CAN U.S. ASIA CORP AM CAN U.S. ASIA CORP 350 453 331 324 265 253 348 230
Slide 16: Asset Management: A global leader in both public and alternative asset classes
Asset Management: A global leader in both public and alternative asset classes through MFS and SLC Management Business Group Results (C$) Q4 2023 strategic highlights Profitability Q4’23 Q4’22 Change MFS Underlying net income1 ($ millions) 331 324 +2% • MFS became the 9th largest fund group5 for the
Slide 17: MFS: US$599B AUM, 9th largest
Wealth & asset management RETAIL INSTITUTIONAL TOTAL MFS US$401B AUM1 US$197B AUM1 US$599B 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
Wealth & asset management Real Estate IG Credit Alternative Credit Infrastructure Distribution $84B AUM1,2 $62B AUM1,2 $55B AUM1,2 $17B AUM1,2 $5B AUM1,2,3 Top global ranking in the Invests across spectrum Seeks investments in high- 230+ infrastructure One of the largest ⬤ ⬤ ⬤ of investment grade qu
Slide 19: Canada: A leader in health, wealth, and insurance
Canada: A leader in health, wealth, and insurance Business Group Results Q4 2023 strategic highlights Profitability Q4’23 Q4’22 Change • Received approval from the Canadian Investment Regulatory Wealth & asset management ($ millions) 92 72 +28% Organization for the creation of a securities investmen
Slide 20: Canada overview
Wealth & asset Individual - Group - Health management Protection & Protection Group Retirement Services (GRS) Individual Wealth Individual Insurance Sun Life Health $134B AUM1,3 $32B AUM1,3 $5.9B Net premiums1,4 $6.4B Net premiums1,4 Canada ~1.3M Clients2 ~0.7M Clients2 ~1.8M Clients2 ~2.7M Clients2
Slide 21: U.S.: A leader in health and benefits
U.S.: A leader in health and benefits Business Group Results (US$) Q4 2023 strategic highlights Profitability Q4’23 Q4’22 Change • DentaQuest was awarded Medicaid dental benefits contracts with Group - Health & Protection ($ millions) 153 160 (4)% the states of Iowa and Arkansas, supporting our miss
Slide 22: U.S. overview
Group - Health Individual - & Protection Protection Dental Health Group Individual US$3.0B Net premiums1,3 US$2.5B Net premiums1,3 US$2.2B Net premiums1,3 US$15.9B AUM1 ~36M Members ~10M Members ~9M Members ~0.2M Members Second largest Dental Largest independent Stop- Top ten U.S. Group Life Closed
Slide 23: Asia: A regional leader focused on fast-growing markets
Asia: A regional leader focused on fast-growing markets Business Group Results Q4 2023 strategic highlights Profitability Q4’23 Q4’22 Change CC1 Wealth & asset management ($ millions) 16 16 - - • Launched a new index universal life product in Singapore4, providing High-Net-Worth Clients with the fle
Slide 24: Asia 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 • 5th in insurance sales and 5th Asia 12 consecutive years 3rd based on AUM1,6 in bancassurance sales1,8 • 11th in insura
Slide 25: Agenda
• Business overview • Strategic overview • Business group results & highlights • Capital management • Asset portfolio Sun Life – Q4 2023 25
Slide 26: Capital model provides financial flexibility
Capital model provides financial flexibility SLF Inc. SLF Inc. - External Capital Securities Subordinated Debt Coupon Principal, SM Par Call Date LICAT1 149% SLF Series 2007-1 5.40% $400 29-May-37 SLF Series 2019-1 Sustainability Bond 2.38% $750 13-Aug-24 SLF Series 2020-1 2.58% $1,000 10-May-27 SLF
Slide 27: Capital strength & flexibility
Capital strength & flexibility • Target minimum cash and other liquid assets at the holding company of $500 million1,2,3 Q4’23 Capital Q4’23 Capital metrics SLF Inc. ($ millions) Deployment opportunities LICAT4 149% Subordinated debt5 6,178 • Organic investments Financial leverage ratio1 21.5% 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 – Q4 2023 29
Slide 30: High quality, well-diversified investment portfolio
High quality, well-diversified investment portfolio Investment profile Debt securities by credit rating • 74% of the portfolio is fixed As of December 31, 2023 As of December 31, 2023 income; 97% of fixed income BB and lower rated investment grade1 BBB- 1% Equity 3% AAA BBB Investment securities 20%
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 December 31, 2023 As of December 31, 2023 Multi-family % of Multi-family ($millions) Office Industrial Retail Other Total ($millions) Office Industrial Retail Other Total residential To
Slide 32: Appendix
Appendix Sun Life – Q4 2023 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. Recognized by Women Lead Here for the fourth year in a row. Published by the Globe and Mail, Report on Business m
Slide 34: Market sensitivities
Market sensitivities Change in Equity Markets1,2,3 Change in Interest Rates2,3,6 As at December 31, 2023 25% 10% 10% 25% As at December 31, 2023 As at December 31, 20225 ($millions, unless otherwise noted) decrease decrease increase increase ($millions, unless otherwise noted) 50 basis point 50 basi
Slide 35: Note to Readers: 2022 Restated Results on Adoption of IFRS 17 and IFRS 9
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
Currency All amounts are in Canadian dollars unless otherwise noted. Rounding Amounts in this document are impacted by rounding. 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
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 35% in Q4 2023 and 35% in Q4 2022. 3 This ratio is based on the last twelve months. IFRS 9 was adopted on January 1, 2023, as such Q4 2022 margin is under an IAS 39 basis. 4 Does not include the General Account. SLC total AUM
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 Q3 2023 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 – Q4 2023 40