Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Investor Presentation (August 2017)
32 slides from Sun Life Financial's investor presentation, August 2017
Slide 1: Building Sustainable Shareholder Value
BUILDING S U S TA I N A B L E SHAREHOLDER VA L U E Second Quarter, 2017
Slide 2: Business Overview
fi BUSINESS OVERVIEW Life Financial SUN LIFE FINANCIAL INC. Life's brighter under the sun
Slide 3: Sun Life Financial in 2017
SUN LIFE FINANCIAL IN 2017 A $29 billion1 leading, international financial services provider… operating through a balanced and diversified model… focused on creating shareholder value now and in the future 3 1 Market capitalization (C$), as of June 30, 2017
Slide 4: The Sun Life Story: Ambitious and Achievable
THE SUN LIFE STORY: AMBITIOUS AND ACHIEVABLE We have four strong pillars that can each compete, win and grow in their respective 1 sectors and which leverage each other Bound together by a strong balance sheet and risk culture, including no direct U.S. 2 Variable Annuity or Long-Term Care Underpinne
Slide 5: Setting a Bold New Objective
SETTING A BOLD NEW OBJECTIVE Our ambition is to be ONE OF THE BEST insurance and asset management companies globally Each pillar viewed Disproportionate as one of the best Top Quartile Share of Top Top Quartile TSR in its markets Client Experience Talent 5
Slide 6: Client for Life: A Step Change
CLIENT FOR LIFE: A STEP From: To: Customers Clients Product sale Advice and solutions One-time interaction A lifetime relationship Reactive Proactive: Sun Life has my back Insurance jargon Language that people understand Complex paper driven processes Simplified digital proce
Slide 7: Ambition to Be One of the Best Insurance and Asset Management Companies
AMBITION TO BE “ONE OF THE BEST” INSURANCE AND ASSET MANAGEMENT COMPANIES IN THE WORLD A growth strategy focused on high ROE and strong capital generation through leading positions in attractive markets globally A Leader in Insurance A Leader in U.S. Group and Wealth Solutions Benefits and Internati
Slide 8: Key Drivers Support Medium-Term EPS Objectives
KEY DRIVERS SUPPORT MEDIUM-TERM EPS OBJECTIVES 1%-2% 8%-10% 2%-3% 5% 1 Organic Growth & Margin Improvement Recently Acquired Medium-Term Objective Existing Initiatives Businesses Additional opportunities through effective capital deployment 1 The objectives are forward-looking non-IFRS financial mea
Slide 9: Delivering Value to Shareholders
DELIVERING VALUE TO SHAREHOLDERS TOTAL SHAREHOLDER RETURN NET INCOME1 FIVE YEARS AS OF (C$ MILLIONS) JUNE 30, 2017 (ANNUALIZED RETURN) CAGR 11%* 2,590 2,485 2,461 Sun Life 2,305 2,335 2,185 Canadian Lifecos 1,762 1,816 Canadian Banks S & P 500 U.S. Lifecos TSX 2014 2015 2016 LTM** Q2'17 Source: Bloo
Slide 10: Balanced and Diversified Business
BALANCED AND DIVERSIFIED BUSINESS BUSINESS GEOGRAPHIC DIVERSIFICATION DIVERSIFICATION Q2’17 UNDERLYING NET INCOME Q2’17 UNDERLYING NET INCOME* RUN-OFF 12% SLF UK ASSET 5% MANAGEMENT 29% SLF US 20% SLF CANADA GROUP 37% INSURANCE 20% SLF ASIA 11% INDIVIDUAL WEALTH INSURANCE 14% 25% SLF ASSET MANAGEMEN
Slide 11: Business Group Performance
BUSINESS GROUP PERFORMANCE UNDERLYING NET INCOME REPORTED NET INCOME (C$ MILLIONS) (C$ MILLIONS) 185 185 183 266 173 200 199 153 101 143 114 77 68 85 81 54 SLF Canada SLF U.S. SLF Asset SLF Asia SLF Canada SLF U.S. SLF Asset SLF Asia Management Management Q2 16 Q2 17 Q2 16 Q2 17 Underlying net incom
Slide 12: SLF Canada: Growing Earnings Power
SLF CANADA: GROWING EARNINGS POWER Q2’17 HIGHLIGHTS ASSETS UNDER UNDERLYING NET MANAGEMENT INCOME • Group Benefits business ranked #1 in premium (C$MILLIONS) (C$MILLIONS) revenue in the Fraser Group Universe Report for the 8th year in a row • Group Retirement Services sales increased by more than 50
Slide 13: SLF Canada: New Engines Accelerating Growth
SLF CANADA: NEW ENGINES ACCELERATING GROWTH AND ALREADY SEEING THE RESULTS Client Solutions Sun Life Global Defined Benefit Investments Sun GIF Brighter Way Digital Health Solutions Building retail wealth (Segregated Digital initiatives Solutions Centralized distribution Funds) ope
Slide 14: SLF Asset Management: Premier Global Asset Management Operations
SLF ASSET MANAGEMENT: PREMIER GLOBAL ASSET MANAGEMENT OPERATIONS Q2’17 HIGHLIGHTS ASSETS UNDERLYING UNDER MANAGEMENT NET INCOME • MFS AUM up 9% from Q2’16 to US$462 (C$BILLIONS) (C$MILLIONS) billion, underlying net income up 26% from Q2’16 • Strong fund performance across asset management businesses
Slide 15: MFS' Path to Net Inflows
MFS HAS A SINGLE, GLOBAL INVESTMENT PLATFORM London • Toronto• • Boston • Tokyo Mexico City • • Hong Kong Singapore • • São Paulo • Sydney MFS’ PATH TO NET INFLOWS Normalization of Retail Redemption Rates Non-U.S. Retail Sales back to pre-Brexit Levels Growth of Institutional Sales: Blended Re
Slide 16: SLF Asset Management: Sun Life Investment Management Well Positioned for Growth
SLF ASSET MANAGEMENT: SUNLIFE INVESTMENT MANAGEMENT WELL POSITIONED FOR GROWTH Ta r g e t $100 billion of AUM and 20+% operating margin by 2020 • Institutional demand for liability-driven investing, alternative fixed income and real estate is strong and growing • Sun Life Investment Management is we
Slide 17: SLF U.S.: Execution of Key Initiatives
SLF U.S.: EXECUTION OF KEY INITIATIVES Q2’17 HIGHLIGHTS SLF U.S. UNDERLYING NET INCOME • Improved claims experiences in Stop-loss, seeing (US$MILLIONS) impact of price increases in life and disability • Continued progress on Group integration: • Rolled out combined portfolio of employee benefits pro
Slide 18: SLF U.S.: Uniquely Broad Product Portfolio in Group Benefits
SLF U.S.: UNIQUELY BROAD PRODUCT PORTFOLIO AND CAPABILITIES IN GROUP BENEFITS Cross Selling ~ One-Stop Shopping ~ Increased Visibility DENTAL VOLUNTARY/ STOP-LOSS DISABILITY LIFE & VISION WORK SITE Extensive market Total absence Client centric #2 largest dental Extensive array of data and largest ma
Slide 19: SLF Asia: Growing Our Asia Business
SLF ASIA: GROWING OUR ASIA BUSINESS UNDERLYING NET INDIVIDUAL LIFE INCOME AND HEALTH Q2’17 HIGHLIGHTS INSURANCE SALES1 (C$MILLIONS) (C$MILLIONS) • Announced a telco-insurance partnership with U Mobile, that will allow Malaysians to apply and manage their life insurance coverage on their mobile devic
Slide 20: SLF Asia Market Presence
SLF ASIA MARKET PRESENCE • Wholly owned Third Hong Kong Party Pensions • Since 1892 Administrator (TPA) • Since 2002 • ~ 1,900 advisors • Ranked #1 in TPA(2) • Joint venture with the China Everbright Group • Insurance & Asset Management Company established in 2012 • ~ 3,300 advisors Philippines • Si
Slide 21: Capital Management
fi CAPITAL MANAGEMENT Life Financial SUN LIFE FINANCIAL INC. Life's brighter under the sun
Slide 22: Strong Capital Generation with Balanced Approach to Deployment
STRONG CAPITAL GENERATION WITH BALANCED APPROACH TO DEPLOYMENT EXPECTED ANNUAL CAPITAL FINANCIAL STRENGTH CAPITAL GENERATION DEPLOYMENT RATINGS (2014 -2016) (C$ billions) Sun Life Assurance Company 2.7 Q2’17 2.5 of Canada SLF US AA-(2) SLF 2.0 Standard & Poor’s Canada Moody’s Aa3 A.M. Best A+ SLF UK
Slide 23: Strong Capital Adequacy and Flexible Balance Sheet
STRONG CAPITAL ADEQUACY AND FLEXIBLE BALANCE SHEET M C C S R R A T I O S (1) HOLDING COMPANY L E V E R A G E R A T I O (1) C A S H (1) (C$ millions) 1,827 250% 250% 248% 243% 1,434 240% 229% 990 226% 816 217% 23.6% 23.0% 22.5% 22.1% 2014 2015 2016 Q2'17 2014 2015 2016 Q2'17 2014 2015 2016 Q2'17 Mini
Slide 24: Capital Model
CAPITAL MODEL MCCSR 248% $1.4 billion cash at Leverage 22.5% Holding Company SLF Leverage Capacity SLF - External Capital Securities to 25/30%: ~$0.9/$2.9B Outstanding First Call Subordinated Debt Coupon Balance Date SLF T2B (Series 2007-1) 5.40% $398 29-May-37 SLF T2B (Series 2008-1) 5.59% $400 30-
Slide 25: Operating and Financial Leverage
OPERATING AND FINANCIAL LEVERAGE Operating Leverage Debt (C$ millions) Q2 2017 Debt supporting reserve financing Operating Senior Debt 599 Leverage Bilateral Senior Financing 1 2,034 Total Operating Leverage Debt $2,633 Capital (C$ millions) Q2 2017 Tier 2 Subordinated Debt $3,038 SLEECS (Innovative
Slide 26: Asset Portfolio
fi ASSET PORTFOLIO Life Financial SUN LIFE FINANCIAL INC. Life's brighter under the sun
Slide 27: High Quality, Well Diversified Investment Portfolio
HIGH QUALITY, WELL DIVERSIFIED INVESTMENT PORTFOLIO DEBT SECURITIES BY COMPETITIVE INVESTED ASSETS RATING Policy ADVANTAGES Cash and Loans and BB and Cash Real Estate Other 6% Equivalents 5% Lower 2% AAA Leading non-public 5% Equities 18% portfolio with significant 4% BBB 28% origination capabilit
Slide 28: Appendix
APPENDIX Life Financial SUN LIFE FINANCIAL INC. Life's brighter under the sun
Slide 29: Sustainable, Healthier Communities for Life
SUSTAINABLE, HEALTHIER COMMUNITIES FOR LIFE For the eighth consecutive year in 2016, Sun Life ranked In December 2014, Sun Life Assurance Company of among the Global 100 Most Sustainable Corporations in Canada became the first major Canadian life insurer to Sun Life has been named one of 12 Canadian
Slide 30: The Four Pillars of Our Sustainability Strategy
THE FOUR PILLARS OF OUR SUSTAINABILITY STRATEGY 30
Slide 31: Use of Non-IFRS Financial Measures
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 these measures pr
Slide 32: 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
Sun Life Financial — Investor Presentation (August 2017) on 6ix