Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q3 2013 Earnings Presentation
26 slides from Sun Life Financial's earnings presentation, November 2013
Slide 1: Building Sustainable Shareholder Value Q3 2013
BUILDING SUSTAINABLE SHAREHOLDER VALUE Q3 2013
Slide 2: Sun Life Financial around the world
SUN SLF Around the LIFE WorldFINANCIAL AROUND THE WORLD Growing our business and helping customers achieve lifetime financial security 124,000 advisors · P&D(1) $126 billion · AUM(2) of $590 billion UNITED KINGDOM CANADA IRELAND LONDON CHINA VANCOUVER MONTREAL ROTTERDAM FRANKFURT PARIS ZURICH TORONT
Slide 3: Enduring Strategy
Sun Life Financial ENDURING STRATEGY A strategy focusing on growth, higher ROE, and less volatile businesses Becoming the BEST ENHANCING LEADERSHIP PERFORMING LIFE POSITION in U.S. group insurance and BECOMING INSURER in Canada TOP 5 in voluntary benefits GROWING our ASSET GROWING ASIA to be MANAGEM
Slide 4: Products & Markets Positioned for Growth
Sun Life Financial PRODUCTS & MARKETS POSITIONED FOR GROWTH AGING of baby boomers DOWNLOADING of responsibility GROWTH of the middle class from government & employers to in the emerging employees markets of Asia LONG TERM MACRO DRIVERS OF CUSTOMER DEMAND BUILDING SUSTAINABLE SHAREHOLDER VALUE 3
Slide 5: SLF Canada: Did You Know?
SLF Canada DID YOU KNOW? • Voted by Canadians as “Most Trusted Life Insurance Company” in the country for the fourth consecutive year(1) STRONG BRAND • Achieved gold certification in the Progressive Excellence Program® (PEP)(2) • CARP(3) recommended provider for retirement and estate planning • #1 i
Slide 6: SLF Canada: Strong Sales, Improved Profitability
SLF Canada STRONG SALES, IMPROVED PROFITABILITY SLGI CLIENT ASSETS UNDER NEW BUSINESS STRAIN(1) MANAGEMENT(1)(2) Becoming the BEST (C$ billions) PERFORMING LIFE (C$ millions) INSURER in Canada 6,723 16 • Achieved significant sales growth 4 across group businesses 5,739 GROWING our ASSET • MANAGEMENT
Slide 7: SLF U.S.: Accelerated Growth, Lower Volatility
SLF U.S. ACCELERATED GROWTH, LOWER VOLATILITY VOLUNTARY SALES(1) EMPLOYEE BENEFITS GROUP ENHANCING LEADERSHIP (US$ millions) BUSINESS SALES(1) POSITION in U.S. group (US$ millions) insurance and BECOMING TOP 5 in voluntary benefits 563 330 141 446 • Transformed risk profile through sale of 86 279 26
Slide 8: Asset Management: Record Performance at MFS
Asset Management Becoming the BEST RECORD PERFORMANCE AT MFS (1) PERFORMING LIFE INSURER in Canada ASSETS UNDER NET FLOWS(2) MANAGEMENT(2) (US$ billions) GROWING our ASSET (US$ billions) MANAGEMENT BUSINESS globally 386 32 29 • Achieved record gross sales, net flows 304 • Grew and diversified AUM(2)
Slide 9: SLF Asia: Sales Growth, Expanded Footprint
SLF Asia ENHANCING LEADERSHIP SALES GROWTH, EXPANDED FOOTPRINT POSITION in U.S. group insurance and BECOMING TOP 5 in voluntary benefits INDIVIDUAL LIFE WEALTH SALES(1)(2) GROWING ASIA to be INSURANCE SALES(1) (C$ millions) a MORE SIGNIFICANT (C$ millions) PART of Sun Life’s results 1,570 • Launched
Slide 10: Strong Sales Growth
Sun Life Financial STRONG SALES GROWTH CONTINUING OPERATIONS CHANGE OVER CHANGE OVER (C$ MILLIONS) Q3’13 Q3’13 YTD Q3’12 Q3’12 YTD (unless otherwise noted) Life and Health sales(1) 446 6% 1,453 13% Wealth sales(1) (excl. MFS) 2,725 15% 8,333 23% MFS sales(1) 26,400 26% 75,200 25% Total Wealth Sales(
Slide 11: Robust Earnings Growth
Sun Life Financial ROBUST EARNINGS GROWTH OPERATING NET INCOME(1) (C$ millions) • Q3’13 value of new business up 37% 1,301 • Q3’13 expected profit up 16% • Q3’13 new business strain down 74% 1,146 459 422 Q3’12 Q3’13 Q3’12 Q3’13 YTD YTD (1) Represents a non-IFRS financial measure; based on Continuin
Slide 12: Reducing Volatility, Optimizing Capital Usage
Sun Life Financial REDUCING VOLATILITY, OPTIMIZING CAPITAL USAGE DISCONTINUED REDUCED REDUCED DIVESTED U.S. life insurance Canadian segregated Reduced percentage U.S. Annuity and annuity sales fund sales from of Canadian insurance Business (January 2012) $2.1 billion (2009) to sales from universal (
Slide 13: Diversified by Geography and Market
Sun Life Financial DIVERSIFIED BY GEOGRAPHY AND MARKET REVENUE BY VALUE OF NEW BUSINESS BUSINESS SEGMENT(1) BY BUSINESS TYPE (1) (%) (%) Corporate 5% Protection 45% SLF Asia SLF Canada Wealth 8% 43% 55% MFS 14% SLF U.S. 30% (1) Based on LTM Q3’13; revenue excludes the fair value change in Fair Value
Slide 14: Strong Capital and Financial Position
Sun Life Financial STRONG CAPITAL AND FINANCIAL POSITION MCCSR RATIO(1) – SUN LIFE ASSURANCE COMPANY $2.1 billion cash level at Sun Life Financial Inc. as of OF CANADA September 30, 2013 213% 217% 216% Financial Strength Rating SUN LIFE ASSURANCE Q3’13 2012 2011 2010 COMPANY OF CANADA A.M. Best A+ A
Slide 15: Quality Asset Portfolio
Sun Life Financial QUALITY ASSET PORTFOLIO Q3’13 INVESTED ASSETS • Investment portfolio is well diversified (% C$107 billion) by geography, asset class, industry sector and issuer Equities • High quality asset base 5% Debt Securities • Self originated mortgage portfolio is Investment 50% Properties
Slide 16: Ambitious and Achievable Objectives
Sun Life Financial AMBITIOUS AND ACHIEVABLE OBJECTIVES OPERATING NET INCOME 2011 ADJUSTED 2015 OBJECTIVES(1) (C$ MILLIONS) NET INCOME(2) 2015 operating net income SLF Canada 900 660 objective of $1.85 BILLION SLF U.S. 345 273 MFS 450 275 SLF Asia 225 110 2015 operating ROE objective of 12% - 13% Cor
Slide 17: Disciplined Execution
Sun Life Financial DISCIPLINED EXECUTION INTENSIFY OUR FOCUS ON CUSTOMERS GREATER DISCIPLINE AROUND PRODUCTIVITY AND EXPENSES HIGH PERFORMANCE CULTURE BUILDING SUSTAINABLE SHAREHOLDER VALUE 16
Slide 18: SLF Canada: Strategy and Key Initiatives
SLF Canada STRATEGY AND KEY INITIATIVES Capture the • Expand retirement distribution RETIREMENT • Grow retail and institutional retirement assets; MARKET grow SLGI assets OPPORTUNITY • Drive growth in Defined Benefit Solutions Extend #1 • Total Benefits and Mobile Initiatives to differentiate plan M
Slide 19: SLF U.S.: Strategy and Key Initiatives
SLFU.S. SLF U.S. STRATEGY AND KEY INITIATIVES Transform • Improve distribution effectiveness, enhance customer EMPLOYEE experience and create a scalable operating model BENEFITS • Differentiate through medical stop-loss offering BUSINESS Grow • Expand product portfolio VOLUNTARY • Enhance enrollment
Slide 20: MFS: Strategy and Key Initiatives
MFS MFS STRATEGY AND KEY INITIATIVES Deliver consistent, strong • Enhance global research platform INVESTMENT • Strengthen unique, collaborative culture PERFORMANCE Broaden • Diversify product sales and grow in our markets GLOBAL • Add investment offices and staff to cover more regions PRESENCE • Ex
Slide 21: SLF Asia: Strategy and Key Initiatives
SLF SLF Asia Asia STRATEGY AND KEY INITIATIVES Expand • Expand our agency force and improve productivity MULTI- • Grow distribution through alternative channels, CHANNEL in particular bancassurance DISTRIBUTION Expand • Grow new ventures in Vietnam and Malaysia PRODUCTS • Expand accident and health
Slide 22: Sustainable Shareholder Value: Executing on Growth
Sun Life Financial SUSTAINABLE SHAREHOLDER VALUE EXECUTING ON GROWTH LOWER RISK, HIGHER ROE BUSINESSES DISCIPLINED CAPITAL DEPLOYMENT AMBITIOUS & ACHIEVABLE OBJECTIVES BUILDING SUSTAINABLE SHAREHOLDER VALUE 21
Slide 23: Contact
Sun Life Financial INVESTOR RELATIONS Contact PHIL MALEK REKHA SAMPATH VICE PRESIDENT ASSISTANT VICE PRESIDENT phil.malek@sunlife.com rekha.sampath@sunlife.com 416-979-4159 416-979-6010 BUILDING SUSTAINABLE SHAREHOLDER VALUE 22
Slide 24: 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 they provide information that is useful to investors in understanding our performance and facilitate a comparison of the quarterly and full year results from period to per
Slide 25: Forward-Looking Statements
Forward-Looking Statements In this document, Sun Life Financial Inc. and its subsidiaries, joint ventures and associates are referred to as “we”, “us”, “our”, and the Company. Certain statements in this document, including (i) the anticipated impact of the sale of our U.S. Annuity Business, (ii) sta
Slide 26: Material assumptions and risk factors
Material assumptions and risk factors Our 2015 financial objectives are based on the assumptions set out in our 2012 annual MD&A. They are also based on best estimate actuarial assumptions as at December 31, 2012. The Company’s operating ROE is dependent upon its capital levels and options for deplo