Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — 2015 BMO Fixed Income Insurance Conference
26 slides from Sun Life Financial's conference presentation, Jun 18, 2015
Slide 1: 2015 BMO Fixed Income Insurance Conference
2015 BMO Fixed Income Insurance Conference Thursday June 18th, 2015 Marlene Van den Hoogen Vice President, Capital Planning and Treasury
Slide 2: Forward-looking statements; Non-IFRS Financial Measures
Forward-looking statements Certain statements in this presentation and certain oral statements made during the earnings conference call on May 6, 2015 (collectively, this “presentation”), including, but not limited to, statements that are not historical facts, are forward-looking and are subject to
Slide 3: Sun Life Financial in 2015
SUN LIFE FINANCIAL SUN LIFE FINANCIAL IN 2015 A leading, international financial services provider… operating through a balanced and diversified model… focused on creating shareholder value now and in the future 3
Slide 4: Our Four Pillar Strategy
SUN LIFE FINANCIAL OUR FOUR PILLAR STRATEGY A growth strategy focused on high ROE and strong capital generation through leading positions in attractive markets globally LEADER in FINANCIAL PROTECTION and WEALTH SOLUTIONS in our Canadian home market ✓✓ PREMIER GLOBAL ASSET MANAGER, anchored by MFS LE
Slide 5: Balanced and Diversified Business Model
SUN LIFE FINANCIAL BALANCED AND DIVERSIFIED BUSINESS MODEL BY GEOGRAPHY(1) – 2014 BY BUSINESS TYPE – 2014 Underlying net income $1.8 billion Underlying net income $1.8 billion Asia 10% Canada 35% Wealth 45% Protection 55% U.S. 48% U.K. 7% (1) Canada includes SLF Canada and Corporate Support results.
Slide 6: Investing in Growth: Canada
SUN LIFE CANADA INVESTING IN GROWTH LEADER in FINANCIAL PROTECTION and WEALTH SOLUTIONS in our Canadian home market ✓ UNDERLYING NET INCOME (C$ millions) FUTURE EARNINGS DRIVERS 799 823 • Sun Life Global Investments 746 • Individual Wealth expansion • Group Retirement Services growth • Defined Benef
Slide 7: Investing in Growth: U.S.
SUN LIFE U.S. INVESTING IN GROWTH LEADER in U.S. GROUP BENEFITS and INTERNATIONAL high net worth solutions ✓ UNDERLYING NET INCOME (C$ millions) FUTURE EARNINGS DRIVERS • Improve operational results in 291 group insurance 264 266 • Grow Stop-loss business • Grow Voluntary Benefits business • Build d
Slide 8: Investing in Growth: Asia
SUN LIFE ASIA INVESTING IN GROWTH GROWING Asia through DISTRIBUTION EXCELLENCE in HIGHER GROWTH MARKETS ✓ UNDERLYING NET INCOME (C$ millions) FUTURE EARNINGS DRIVERS 174 • Grow through distribution excellence and partnerships – Most Respected Agency initiative 123 – Bancassurance 106 • Grow Health &
Slide 9: Asset Management
SUN LIFE FINANCIAL ASSET MANAGEMENT MFS Sun Life Sun Life Sun Life Asset Birla Sun Life Sun Life Investment Global Management Everbright (Global) (India) Management Investments (Philippines) (China) Ryan Labs (Canada) AUM: AUM: AUM: AUM: AUM: AUM: US$431 billion C$7 billion C$10 billion C$1 billion
Slide 10: Sun Life Investment Management
SUN LIFE FINANCIAL GROWING AND DIVERSIFYING SUN LIFE’S ASSET MANAGEMENT PILLAR SUN LIFE INVESTMENT MANAGEMENT LIABILITY-DRIVEN INVESTING AND ALTERNATIVE YIELD STRATEGIES SUN LIFE SUN LIFE RYAN LABS INVESTMENT BENTALL INVESTMENT ASSET MANAGEMENT K E N N E D Y (1) OPERATIONS MANAGEMENT CANADA Manages
Slide 11: Investing in Growth: Asset Management
ASSET MANAGEMENT INVESTING IN GROWTH PREMIER GLOBAL ASSET MANAGER, anchored by MFS ✓ MFS UNDERLYING NET INCOME (C$ millions) FUTURE EARNINGS DRIVERS 616 • Grow institutional fixed income • Broaden alternative assets 481 • Deliver continued strong investment performance 302 • Expand distribution foot
Slide 12: Executing Against 2015 Earnings Objective
SUN LIFE FINANCIAL EXECUTING AGAINST 2015 EARNINGS OBJECTIVE(1) UNDERLYING NET INCOME (C$ millions) 1,816 1,581 1,200 1,100 1,271 1,196 Protection & Wealth 969 9% CAGR 926 616 270 302 481 MFS 32% CAGR 2013 2011 2012 2013 2014 MFS Protection & Wealth • 2014 Underlying ROE 11.6% versus 2015 objective
Slide 13: Recent Capital Deployment – A Balanced Approach
SUN LIFE FINANCIAL RECENT CAPITAL DEPLOYMENT – A BALANCED APPROACH DATE AMOUNT APPLICATION RESULTS INVESTMENTS TO SUPPORT GROWTH Q2 2013 $300 million Acquisition of Malaysia business Meeting business case expectations Restructure of U.S. reinsurance $480 million of net income Q4 2013 $250 million ar
Slide 14: Strong Capital and Financial Position
SUN LIFE FINANCIAL STRONGCAPITAL STRONG CAPITALAND ANDFINANCIAL FINANCIALPOSITION POSITION MCCSR(1) RATIO – • $1.7 billion cash level at Sun Life Financial Inc. as at SUN LIFE ASSURANCE March 31, 2015 COMPANY OF CANADA • $500 million minimum cash target 219% 217% 216% 209% Financial Strength Rating
Slide 15: Strong Financial Flexibility
SUN LIFE FINANCIAL STRONG FINANCIAL FLEXIBILITY Financial objectives Financing 15
Slide 16: Disciplined Risk Management
SUN LIFE FINANCIAL DISCIPLINED RISK MANAGEMENT ACTION DIVESTED U.S. Annuity Business (August 2013) MODERATED exposure to certain segregated fund guarantees IMPROVED economics of Canada Individual Insurance sales DEPLOYED risk capacity against credit and longevity STRENGTHENED future mortality improv
Slide 17: Improved Risk Posture Over Time
SUN LIFE FINANCIAL IMPROVED RISK POSTURE OVER TIME • Material improvement in risk sensitivities(1) over time as a result of substantial de-risking activities, including the sale of the U.S. Annuity Business (1) Market risk sensitivities as disclosed in the 2011 and 2014 annual management‘s discussio
Slide 18: New Medium-Term Objectives
SUN LIFE FINANCIAL NEW MEDIUM-TERM OBJECTIVES(1) Average EPS growth: 8-10% per annum ROE objective: 12-14% Payout ratio(2): 40-50% (1) The objectives are forward-looking non-IFRS financial measures and are not earnings guidance. 18 (2) Dividend payout ratio is based on underlying net income.
Slide 19: Sustainable Shareholder Value
SUN LIFE FINANCIAL SUSTAINABLE SHAREHOLDER VALUE ROBUST EARNINGS AND SALES GROWTH AMBITIOUS AND ACHIEVABLE OBJECTIVES STRONG FINANCIAL POSITION AND CAPITAL DEPLOYMENT OPPORTUNITY DISCIPLINED CAPITAL/RISK MANAGEMENT EXECUTION EXCELLENCE 19
Slide 20: Q&A
Q&A
Slide 21: Appendices
APPENDICES • Operating and Financial Leverage • Capital Model and Outstanding Securities • North American Peer Financial Strength Ratings
Slide 22: Operating and Financial Leverage
SUN LIFE FINANCIAL OPERATING AND FINANCIAL LEVERAGE Operating Leverage Debt (C$ millions) Q1 2015 Debt supporting reserve financing Operating Senior Notes 2,149 Leverage Bilateral Senior Financing 1,922 Total Operating Leverage Debt $4,071 Capital (C$ millions) Q1 2015 Tier 2 Subordinated Debt $2,18
Slide 23: Capital Model and Outstanding Securities
SUN LIFE FINANCIAL CAPITAL MODEL AND OUTSTANDING SECURITIES + $1.7bn cash SLF - External Capital Securities at HoldCo SLF Subordinated Debt Coupon Outstanding Balance First Call Date Security Ratings (4) SLF T2B (Series 2007-1) 5.40% $398 29-May-37 A-/A SLF T2B (Series 2008-1) 5.59% $399 30-Jan-18 A
Slide 24: North American Peer Financial Strength Ratings
SUN LIFE FINANCIAL NORTH AMERICAN PEER FINANCIAL STRENGTH RATINGS S&P Moody’s A.M. Best DBRS Life Operating Companies Rating Outlook Rating Outlook Rating Outlook Rating Outlook SLA AA- Aa3 A+ IC-1 Canada MLI AA- A1 A+ IC-1 AA Aa3 A+ IC-1 A+ Not Rated A+ IC-2 AA- Aa3 A+ Not Rated AA- A1 A+ United St
Slide 25: Use of Non-IFRS Financial Measures; Forward-Looking Statements
In this presentation, Sun Life Financial Inc. and its subsidiaries, joint ventures and associates are referred to as “we”, “us”, “our” and the “Company”. Use of Non‐IFRS Financial Measures We report certain financial information using non‐IFRS financial measures, as we believe that they provide info
Slide 26: Forward-Looking Statements (continued)
The forward‐looking statements in this presentation represent our current expectations, estimates and projections regarding future events and are not statements of historical facts. By their very nature, forward‐looking statements are subject to inherent risks and uncertainties and are based on seve
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