Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q1 2022 Earnings Presentation
37 slides from Sun Life Financial's earnings presentation, May 2022
Slide 1: Q1 2022 Building Sustainable Shareholder Value
Q1 2022 Building Sustainable Shareholder Value
Slide 2: Business overview
Business overview Business group results & highlights Capital management Asset portfolio Sustainability 2
Slide 3: A $41 billion leading global financial services organization
A $41 billion leading global financial services organization 1 Offices in 27 markets 118,400 Advisors 50,000 Employees 2 2 Balanced and diversified business model Wealth & Asset Management Group & Shorter Duration Insurance Traditional Insurance $1.35 trillion AUM 3 As of December 31,2021. Includes
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 and shareholders • Portfolio of businesses that have strong growth prospects and capital generation in attractive global markets • Strategy is
Slide 5: Executing on our ambition to be one of the best asset management and insurance companies
Executing on our ambition to be one Our Purpose: Help Clients achieve lifetime financial security and live of the best asset management and healthier lives insurance companies globally Four Pillar Strategy Key Priorities A global leader in both public and AM alternative asset classes through 1 Think
Slide 6: Consistently delivering value to shareholders
Consistently delivering value to shareholders 5-year total shareholder return 2 Performance against medium-term objectives March 31, 2022 Medium-term objective Q1 2022 5-year as of 20213 Sun Life 11.7% Asset Managers 16.6% Underlying ROE1,4 14.0% 14.2% 16%+ Canadian Banks 11.9% Underlying EPS growth
Slide 7: Digital Leadership
Digital Leadership Thinking and acting like a digital company DIGITAL EXPERIENCES Amazing Client, employee, advisor, and partner experiences DIGITAL CAPABILITIES Enable our experiences and improve our digital maturity Empowering our people to support our digital journey DIGITAL WAYS OF WORKING Stron
Slide 8: Leveraging global trends
Leveraging global trends Individual and employer attention on Digital acceleration physical and mental health Demographic shifts in developed Adoption of digital health technologies markets Increased economic, market and Growth of alternative asset classes geopolitical volatility Gig economy and shi
Slide 9: Business group results & highlights
Business overview Business group results & highlights Capital management Asset portfolio Sustainability 9
Slide 10: Business group performance
Business group performance Reported net income ($ millions) Underlying net income1 ($ millions) Impact of currency translation decreased reported net income by $6M1 Impact of currency translation decreased underlying net income by $6M1 +34% (35)% (20)% (19)% +12% +5% (31)% (4)% Constant currency1,2
Slide 11: Expanding asset management capabilities
Expanding asset management capabilities Q1’22 highlights Underlying net income 1 ($ millions) 1,346 1,381 • MFS ranked 10th and 5th for 5- and 10-year periods, respectively, for 1,128 1,004 performance across its U.S. fund line up, according to the Barron's 2021 Fund Family rankings • Q1 pre-tax net
Slide 12: MFS: diversification of assets under management
MFS: diversification of assets under management Asset class mix Investor type US$, as at March 31, 2022 US$, as at March 31, 2022 Non-U.S. Balanced Retail Fixed 5% Insurance 5% Income 9% 12% U.S. Equity 43% US$637 U.S. Retail 54% billion AUM Non-U.S. Institutional Equity 32% 40% S U N L I F E • Q 1
Slide 13: SLC Management: diversification of assets under management
SLC Management: diversification of assets under management1 Asset class mix Investor type $, as at March 31, 2022 $, as at March 31, 2022 Real Estate Cash and Endowment/ Debt Other Foundation 4% 1% 2% Infrastructure Insurance 8% Companies Public Fixed 25% Income Private Fixed Income 30% $185 Pension
Slide 14: Canada is a growth market for Sun Life
Canada is a growth market for Sun Life Q1’22 highlights Underlying net income 1 ($ millions) • Launched Prospr by Sun Life, a hybrid advice solution combining a best-in-class 1,131 1,144 digital platform with a team of licensed advisors, to meet Canadians’ personalized 1,012 1,073 and holistic finan
Slide 15: Shaping the industry and capitalizing on opportunities in Canada
Shaping the industry and capitalizing on opportunities in Canada • Capturing growing decumulation opportunity and be the retirement income provider of choice, by leveraging our worksite advantage Shaping the market as a • Expanding our role in health and well-being, including increasing our focus on
Slide 16: Deepening Client relationships in U.S. Group Benefits
Deepening Client relationships in U.S. Group Benefits Q1’22 highlights U.S. Underlying net income 2 (US$ millions) • Sequential improvement in results compared to Q4’21, reflecting lower 413 399 425 370 working-age population COVID-related mortality and favourable medical stop-loss results • Launche
Slide 17: Key trends and opportunities in the U.S.
Key trends and opportunities in the U.S. We are focused on making things easier for Clients while Improving health outcomes and costs increasing access to healthcare, improving health Large, complex U.S. benefits ecosystem, anchored by the outcomes and reducing costs $3.8T healthcare market1 Acqui
Slide 18: Positioned in Asia's largest and fastest growing markets
Positioned in Asia’s largest and fastest growing markets Q1’22 highlights Underlying net income 3 • Earnings and sales in the last twelve months have shown resilience despite ($ millions) 586 pronounced COVID impacts across our markets 579 579 • Expanded bancassurance partnership with CIMB Niaga, In
Slide 19: Capturing growth opportunities in Asia
Capturing growth opportunities in Asia Local Markets International Hubs Philippines Vietnam International • #1 ranked insurance • 6th in insurance sales1,6 • Leverages the high-net-worth company based on total opportunities in Asia to offer Clients premium1,2 • 2nd in bancassurance insurance sales,
Slide 20: Capital management
Business overview Business group results & highlights Capital management Asset portfolio Sustainability 20
Slide 21: Capital generation provides good capital flexibility
Capital generation provides good capital flexibility Capital deployment priorities: Funding organic Target underlying M&A opportunities growth dividend payout and strategic Share buybacks ratio of 40-50%1,2 investments Target minimum cash and other liquid assets at the holding company of $500 millio
Slide 22: Capital model provides financial flexibility
Capital model provides financial flexibility SLF Inc. LICAT1 143% SLA Asset Management LICAT 123% SLC UK Canada Bermuda Asia U.S. MFS Management Capitalized to meet local capital rules Book value excl. from LICAT All information as at March 31, 2022; all dollar amounts are in C$, unless otherwise st
Slide 23: Capital flexibility & deployment opportunities
Capital flexibility & deployment opportunities 1 Capital flexibility Deployment opportunities (as at March 31, 2022) Capital metrics SLF Inc. Type Considerations Organic Making further investments in building out new business LICAT2 143% investments models and advancing our leading digital capabilit
Slide 24: Leverage ratio and financial strength ratings
Leverage ratio and financial strength ratings Q1 2022 capital ($ millions) Subordinated debt1 6,426 Tier 2 Innovative capital instruments (SLEECS) 200 Tier 1 Sun Life Assurance Company of Equity Canada Financial Strength Ratings Preferred shareholders’ equity and other 2,239 A.M. Best A+ equity inst
Slide 25: Asset portfolio
Business overview Business group results & highlights Capital management Asset portfolio Sustainability 25
Slide 26: High quality, well-diversified investment portfolio
High quality, well-diversified investment portfolio • Highly diversified with Debt securities by credit rating the largest non- Investment profile As of March 31, 2022 As March 31, 2022 government related BBB- BB and lower exposure at 0.4% of total BBB 3% 1% fixed income 13% AAA • 97% of fixed incom
Slide 27: Sustainability
Business overview Business group results & highlights Capital management Asset portfolio Sustainability 27
Slide 28: Our sustainability plan brings our Purpose to life
Our sustainability plan brings our Purpose to life Focused on areas of expertise where we can have the most positive impact: Financial Security Healthier Lives Sustainable Investing • Provide innovative financial • Offer products and tools to help Clients • Manage capital with sustainability embedde
Slide 29: Strong sustainability achievements and recognition
Strong sustainability achievements and recognition Financial Security Healthier Lives Sustainable Trusted and Responsible Investing Business • $750M of insurance • $42.7M committed to • $65B sustainable investment • DE&I focus and progress: 35% women in coverage and $410M of diabetes globally since
Slide 30: Appendix
Appendix 30
Slide 31: Market movements and impacts in the quarter
Market movements and impacts in the quarter Change in Interest Rates 5 Market Movements Q1’22 Q1’21 Equity Market Impacts Q1’22 Q1’21 ($millions, post-tax) S&P/ TSX +3.1% +7.3% Equity market movement and volatility (24) 67 S&P 500 (4.9)% +5.8% Basis risk 22 5 CA 10 - year +98 bps +88 bps Total (2) 7
Slide 32: Market sensitivities
Market sensitivities Change in Interest Rates 5 As at March 31, 2022 As at December 31, 2021 50 basis point 50 basis point 50 basis point 50 basis point ($ millions, unless otherwise noted) decrease increase decrease increase Change in Equity Markets 1 Potential impact on net income2,3,6 $(50) $- $(
Slide 33: Use of Non-IFRS Financial Measures
In this presentation, Sun Life Financial Inc. (“SLF” or “SLF Inc.”), its subsidiaries and, where applicable, its joint ventures and associates are referred to as “we”, “us”, “our”, “Sun Life” and the “Company”. Sun Life Assurance Company of Canada is referred to as “SLA”. Use of Non-IFRS Financial M
Slide 34: Forward-Looking Statements
Forward-Looking Statements From time to time, the Company makes written or oral forward-looking statements within the meaning of certain securities laws, including the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities l
Slide 35: Footnotes from slide 6
From slide 6 2 Source: Bloomberg; Canadian Lifecos – Manulife Financial Corporation, Great-West Life, and Industrial Alliance Global Lifecos – AXA SA, Prudential PLC, Allianz SE, Aviva PLC, Assicurazioni Generali SpA, AIA Group Ltd., China Life Insurance Co. Ltd, Great Eastern Holdings, and Ping An
Slide 36: Footnotes from slide 19
From slide 19 2 Insurance Commission of the Philippines, based on Q4 2021 year-to-date total premium income for Sun Life of Canada (Philippines) 3 Philippine Investment Funds Association, based on December 2021 ending assets under management 4 Indonesia Life Insurance Association, based on Q4 2021 y
Slide 37: Sun Life Investor Relations
Sun Life Investor Relations Yaniv Bitton Vice-President, Head of Investor Relations & Capital Markets 416-979-6496 yaniv.bitton@sunlife.com S U N L I F E • Q 1 2 0 2 2 37