Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q1 2024 Earnings Presentation
40 slides from Sun Life Financial's earnings presentation, May 2024
Slide 1: Q1'24 Delivering sustainable shareholder value
Q1’24 Delivering sustainable shareholder value
Slide 2: Agenda
• Business overview • Strategic overview • Business group results & highlights • Capital management • Asset portfolio Sun Life – Q1 2024 2
Slide 3: A leading global financial services organization
A leading global financial services organization Balanced & diversified $1.47T business model2 85M+ 58,200 91,700 Offices in Assets Under $43.1B Year-to-date at March 31, 2024 Clients3,4 Employees3,5 Advisors3,6 28 markets3 Management market cap7 (AUM)1,7 Group - Health & Protection 29% 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 – Q1 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 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 annualized total shareholder return2 Performance against medium-term financial objectives At March 31, 2024 Medium-term financial objective3,4 Q1’24 2-Year3,5 Sun Life 12.0% Underlying EPS growth1 (1)% 11% 8-10% Canadian Lifecos 13.8% Underlying R
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 $706 million in wealth deposits in Canada through proactive and security personalized nudges
Slide 11: Digital leadership
Digital leadership Q1 2024 highlights Thinking and acting more like a digital company focused on: Adopting a digital mindset and harnessing the power of Generative AI • The U.S. Health and Risk Solutions business is leveraging GenAI to securely help summarize and organize lengthy and complex medical
Slide 12: Distribution excellence
Distribution excellence Distribution across the four pillars AM • MFS partners with leading retail intermediary firms and global institutional consultants Omni-channel approach • SLC Management distributes products through affiliates Crescent Capital, to serving Clients, including BentallGreenOak, I
Slide 13: Agenda
• Business and strategic overview • Strategic overview • Business group results & highlights • Capital management • Asset portfolio Sun Life – Q1 2024 13
Slide 14: Q1 2024 results
Q1 2024 results Profitability Q1’24 Q1’23 Change Results Highlights Underlying net income1 ($ millions) 875 895 (2)% Mixed operating results; business fundamentals remain solid Reported net income ($ millions) 818 806 +1% • Wealth & asset management ((1)% y/y): higher fee income driven by higher AUM
Slide 15: Q1 2024 results
Q1 2024 results Underlying net income1 ($ millions) Reported net income ($ millions) Impact of currency translation decreased underlying net income by $4M2 Impact of currency translation decreased reported net income by $2M2 AM CAN U.S. ASIA CORP AM CAN U.S. ASIA CORP 329 310 316 290 282 282 284 254
Slide 16: Asset Management: A global leader in both public and alternative asset classes
Asset Management: A global leader in both public and alternative asset classes through MFS and SLC Management Business Group Results (C$) Q1 2024 strategic highlights Profitability Q1’24 Q1’23 Change MFS Underlying net income1 ($ millions) 282 282 0% • MFS celebrated its centennial anniversary on Ma
Slide 17: MFS: US$630B AUM
Wealth & asset management RETAIL INSTITUTIONAL TOTAL MFS US$423B AUM1 US$207B AUM1 US$630B 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 $85B AUM1,2 $62B AUM1,2 $56B AUM1,2 $17B AUM1,2 $6B AUM1,2,3 Top global ranking in the Invests across spectrum Seeks investments in high- 230+ infrastructure One of the largest • • • of investment grade qu
Slide 19: Canada: A leader in health, wealth, and insurance
Canada: A leader in health, wealth, and insurance Business Group Results Q1 2024 strategic highlights Profitability Q1’24 Q1’23 Change • Launched our Diabetes Care Program, a free service for plan members Wealth & asset management ($ millions) 109 114 (4)% as part of Lumino HealthTM Pharmacy, an onl
Slide 20: Canada business overview
Wealth & asset Individual - Group - Health management Protection & Protection Group Retirement Services (GRS) Individual Wealth Individual Insurance Sun Life Health $141B AUM1,3,4 $33B AUM1,3,4 $5.9B Net premiums1,5 $6.4B Net premiums1,5 Canada ~1.3M Clients2 ~0.7M Clients2 ~1.8M Clients2 ~2.7M Clie
Slide 21: U.S.: A leader in health and benefits
U.S.: A leader in health and benefits Business Group Results (US$) Q1 2024 strategic highlights Profitability Q1’24 Q1’23 Change • Now offering Health Navigator, powered by PinnacleCare, to the Group - Health & Protection ($ millions) 124 154 (19)% large employer group benefits market Individual - P
Slide 22: U.S. business 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$15.6B AUM1,7 ~36M Members ~10M Members ~9M Members ~0.2M Members Second largest Dental Largest independent Stop- Top ten U.S. Group Life Close
Slide 23: Asia: A regional leader focused on fast-growing markets
Asia: A regional leader focused on fast-growing markets Business Group Results Q1 2024 strategic highlights Profitability Q1’24 Q1’23 Change CC1 Individual - Protection ($ millions) 168 130 +29% +30% • To meet regulatory obligations, we sold 6.3% of our ownership interest in Aditya Birla Sun Life AM
Slide 24: Asia business overview
Philippines Hong Kong Vietnam Indonesia $269M ins. sales1,2 $740M ins. sales1,2 $115M ins. sales1,2 $62M ins. sales1,2 • 1st in total premiums1,3 for • 3rd in MPF net inflows and • 7th in insurance sales and 4th • 11th in insurance sales and 8th Asia 12 consecutive years 3rd based on AUM1,6 in banca
Slide 25: Agenda
• Business overview • Strategic overview • Business group results & highlights • Capital management • Asset portfolio Sun Life – Q1 2024 25
Slide 26: Capital model provides financial flexibility
Capital model provides financial flexibility SLF Inc. LICAT1 148% SLA Asset Management LICAT1 142% . . DentaQuest SLC Canada Bermuda Asia U.S. (U.S.) MFS Management Capitalized to meet local capital rules Book value excl. from LICAT All information as at March 31, 2024; all dollar amounts are in C$,
Slide 27: Capital strength & flexibility
Capital strength & flexibility • Target minimum cash and other liquid assets at the holding company of $500 million1,2,3 • Increase to common share dividend from $0.78 to $0.81 per share, as of Q2’24 Q1’24 Capital Q1’24 Capital metrics SLF Inc. ($ millions) Deployment opportunities LICAT4 148% Subor
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 – Q1 2024 29
Slide 30: High quality, well-diversified investment portfolio
High quality, well-diversified investment portfolio Investment profile Debt securities by credit rating • 76% of the portfolio is fixed As of March 31, 2024 As of March 31, 2024 income; 97% of fixed income BB and lower rated investment grade1 BBB- 1% Equity 3% AAA BBB Investment securities • Only 4%
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 March 31, 2024 As of March 31, 2024 Multi-family % of Multi-family ($millions) Office Industrial Retail Other Total ($millions) Office Industrial Retail Other Total residential Total re
Slide 32: Appendix
Appendix Sun Life – Q1 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 March 31, 2024 25% 10% 10% 25% As at March 31, 2024 As at December 31, 2023 ($millions, unless otherwise noted) decrease decrease increase increase ($millions, unless otherwise noted) 50 basis poi
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 33.3% in Q1 2024 and 32.8% in Q1 2023. 3 Based on a trailing 12-month basis. 4 Does not include the General Account. SLC total AUM including the General Account was $375 billion at March 31, 2024. 5 Awarded by the U.S. Enviro
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 Q4 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 – Q1 2024 40