Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Merrill Lynch Global Insurance Investor Conference (February 2003)
30 slides from Sun Life Financial's conference presentation, Feb 13, 2003
Slide 1: Merrill Lynch Global Insurance Investor Conference
Merrill Lynch Global Insurance Investor Conference Donald A. Stewart Chief Executive Officer February 13, 2003
Slide 2: Forward Looking Information
Forward Looking Information This presentation contains forward looking statements with respect to the Company, including its business operations and strategy and financial performance and condition. Although Sun Life Financial management believes that the expectations reflected in such forward looki
Slide 3: Building Shareholder Value
Strategic Building Shareholder Value Overview • Balanced business model • Attractive competitive positions • Disciplined risk management • Multiple catalysts for EPS growth • Track record of delivering on commitments 3
Slide 4: Balanced Business Model
BALANCED BUSINESS MODEL 4
Slide 5: Diversified Earnings Sources
Balanced Diversified Earnings* Sources Business Model Asia UK 2 % 9% MFS 11 % Canada Total US Canada = 47% = 42% 47 % US 31 % *3Q/02 earnings excluding “other” and adjusted for special items 5
Slide 6: Balanced Business Model Has Produced Sustained Earnings Growth
Balanced Business Model Has Balanced Business Produced Sustained Earnings Growth Model Operating Earnings C$ mm 400 350 300 250 Acquisitions 200 Protection & Other 150 100 50 Equity-Linked 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2000 2001 2002 6
Slide 7: Strong Competitive Positions
STRONG COMPETITIVE POSITIONS 7
Slide 8: Solid Competitive Positions in Attractive Focus Markets
Strong Solid Competitive Positions in Competitive Attractive Focus Markets Positions Leadership position in Canada Significant positions in US niche markets MFS: International investment management Attractive growth prospects in Asia UK rationalization driving enhanced returns 8
Slide 9: Leadership in Canada
Leadership in Canada Total Market Share Outlook 1. Manulife/Canada Life 21% 2. SLF Canada 20% 3. Great-West 16% 4. Maritime 7% 5. Desjardins 7% Top 5 71% Based on 2001 direct premiums 9
Slide 10: Leadership in Canada
Leadership in Canada Individual Individual Defined Group Life1 Annuity 2 Contribution Plans 3 Benefits 4 #1 Sun Life Financial Manulife/Canada Life Sun Life Financial Sun Life Financial #2 Great-West Sun Life Financial Manulife/Canada Life Manulife/Canada Life #3 Manulife/Canada Life Desjardins Grea
Slide 11: Creative Transaction Creates Strong Position in Canadian Mutual Funds
Creative Transaction Creates Strong Position in Canadian Mutual Funds • 31% ownership of CI Funds • #4 in Canadian market • $33.8 B in fee-earning assets (Dec 31/02) 11
Slide 12: Solid Positions in US Selected Markets
Solid Positions in US Selected Markets Tightly focused segment strategies in US Annuity and Insurance Operations • Annuities – Focus: fixed, indexed and variable annuities – #16 ranking in annuities (3Q’02) • Group Life & Health – Focus: life, disability and stop-loss – #13 in group life and health
Slide 13: Strong Growth in Individual and Group Insurance
Strong Growth in Individual and Group Insurance Group Life & Health Earnings Individual Life Earnings CAGR* CAGR* up 15% up 21% C$ mm C$ mm 45 G R 140 40 C A 15% 120 G R 35 C A 30 100 21% 25 80 20 60 15 40 10 5 20 0 0 2000 2001 2002 2000 2001 2002 * YTD 3Q’02 vs YTD 3Q’01 13
Slide 14: MFS: Diversified International Investment Manager
MFS: Diversified International Investment Manager • Top 10 in US retail mutual funds • Growing institutional business • High growth international expansion 14
Slide 15: Positive Net Flows Demonstrate MFS' Marketing Success
Positive Net Flows Demonstrate MFS’ Marketing Success Retail Institutional (US $ billions) Products & Other Total 1999 14.1 (0.3) 13.8 2000 20.0 1.4 21.4 2001 12.4 4.8 17.2 2002 (0.4) 3.6 3.2 15
Slide 16: MFS Participates in Diverse Markets: Variable Annuities
MFS Participates in Diverse Markets: Variable Annuities Rank Sep '02 Sep '01 % Change 1 Wellington 31,750 39,652 -19.9 2 Fidelity* 24,062 30,212 -20.4 3 Putnam 23,270 31,529 -26.2 4 Capital Research 19,858 21,664 -8.3 5 MFS 19,722 24,307 -18.9 6 Alliance 19,322 26,315 -26.6 7 Janus 17,112 23,984 -28
Slide 17: MFS Ranks Among Top 10 Largest Retail Mutual Funds
MFS Ranks Among Top 10 Largest Retail Mutual Funds Primary Rank Complex Meth Dist AUM* Dec '02 Dec '01 1 Vanguard Direct $453 $479 2 Fidelity Direct/Whsle 451 537 3 American Funds Wholesale 325 333 4 Franklin Templeton Wholesale 150 155 5 Putnam Wholesale 133 180 6 PIMCO Funds Wholesale 112 83 7 T.
Slide 18: MFS: A Global Asset Manager
MFS: A Global Asset Manager • Investment capabilities in multiple asset categories • Expanding distribution channels – One global investment platform offered through various distribution channels ~ Domestic retail market ~ Institutional clients ~ Offshore retail markets • New product introductions 1
Slide 19: Disciplined Risk Management
DISCIPLINED RISK MANAGEMENT 19
Slide 20: Disciplined Risk Management Process
Risk Disciplined Risk Management Management Process • Equity sensitivity is controlled • Diverse business model has stabilized earnings • Conservative, diversified investment portfolio 20
Slide 21: Hedge Offsets Actuarial Liability Increase in 2002
Hedge Offsets Actuarial Liability Risk Management Increase in 2002 • Purpose - Partially hedge GMDB and DAC exposure • Instrument - S&P 500 Puts • Units Purchased in 2Q, 2001 - 1.23 million • Strike Price - 995 on S&P 500 • Intrinsic Value at December 31 - US $142 million, C $223 million • Maturity
Slide 22: Disciplined Investment Process
Risk Disciplined Investment Process Management Invested Assets: C$106 Billion Mortgages Equities Real Estate 15% 4% 3% Cash 8% 3% Other 67% Bonds Invested assets (excluding policy loans) at September, 2002 22
Slide 23: Disciplined Portfolio Management
Risk Disciplined Portfolio Management Management • Conservative portfolio with over 90% in cash and fixed income • 96% of bonds are investment grade • Well-diversified bond portfolio – Diversified by geography – With over 1,500 names – Largest corporate name only 0.5% of bond portfolio 23
Slide 24: Effective Risk Management Has Delivered Consistent Performance
Effective Risk Management Has Risk Management Delivered Consistent Performance S&P 500 Index 1,447 1,476 Daily Average 1,420 1,366 1,273 Reported EPS 1.00 Operating EPS 1,234 1,154 1,115 1,132 1,070 0.80 895 0.60 EPS 0.59 0.59 0.57 0.40 0.51 0.57 0.50 0.50 0.48 0.48 0.47 0.45 0.20 0.00 (1) 1Q 2Q 3Q
Slide 25: Growth Catalysts
GROWTH CATALYSTS 25
Slide 26: Multiple Catalysts For Earnings Growth
Earnings Multiple Catalysts For Earnings Growth Growth • More to come from Clarica integration • Strong organic growth • Poised to participate in equity rebound • Generation of excess capital provides flexibility 26
Slide 27: Solid Track Record
SOLID TRACK RECORD 27
Slide 28: Commitments to Shareholders Have Been Met
Solid Commitments to Shareholders Track Record Have Been Met • IPO objectives achieved – $160 mm in cost savings – $1.6 B in excess capital deployed – Lagging business units restructured • Keyport EPS accretion targets met • Clarica integration meeting interim targets 28
Slide 29: Multi-Faceted Strategy Drives Shareholder Value
Multi-Faceted Strategy Drives Growth Shareholder Value Strong Risk Growth Stable Market Management Catalysts Earnings Positions 29
Slide 30: Questions & Answers
Questions & Answers Donald A. Stewart Chief Executive Officer February 13, 2003
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