Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Investor Presentation (May 2019)
33 slides from Sun Life Financial's investor presentation, May 2019
Slide 1: Q1 2019 Building sustainable shareholder value
2019 Building sustainable Q1 shareholder value
Slide 2: Business Overview, Capital, Asset Portfolio, ESG
1 2 3 4 BUSINESS CAPITAL ASSET ENVIRONMENTAL, OVERVIEW SOCIAL, MANAGEMENT PORTFOLIO GOVERNANCE Q1 2019 | Sun Life Financial | 2
Slide 3: Business Overview, Capital, Asset Portfolio, ESG
1 2 3 4 BUSINESS CAPITAL ASSET ENVIRONMENTAL, OVERVIEW SOCIAL, MANAGEMENT PORTFOLIO GOVERNANCE Q1 2019 | Sun Life Financial | 3
Slide 4: The World of Sun Life
THE WORLD OF SUN LIFE A $30.5 billion 1 leading international financial services organization… operating through a balanced and diversified model… focused on creating shareholder value now and in the future Q1 2019 | Sun Life Financial 1 Market capitalization (C$), as of March 31, 2019. | 4
Slide 5: The Sun Life Story
THE SUN LIFE STORY A diversified business model, with four strong pillars that can each compete, win and grow in their respective sectors and which leverage each other Bound together by a strong balance sheet and risk culture, including no direct U.S. Variable Annuity or Long-Term Care Digital trans
Slide 6: Executing on our ambition to be one of the best insurance and asset management companies globally
EXECUTING ON OUR AMBITION TO BE ONE OF THE BEST INSURANCE AND ASSET MANAGEMENT COMPANIES GLOBALLY Each pillar Top Disproportionate Top quartile total viewed quartile Client share of top shareholder as a leader experience talent return Q1 2019 | Sun Life Financial | 6
Slide 7: A growth strategy focused on high ROE and strong capital generation
A GROWTH STRATEGY FOCUSED ON HIGH ROE AND STRONG CAPITAL GENERATION THROUGH LEADING POSITIONS IN ATTRACTIVE MARKETS CAN U.S. A Leader in Insurance and A Leader in U.S. Group Wealth Solutions in our Benefits Canadian Home Market A Leader in Asia through A Leader in Global Asset Distribution Excellenc
Slide 8: Digital transformation deeply embedded throughout the organization
DIGITAL TRANSFORMATION DEEPLY EMBEDDED THROUGHOUT THE ORGANGIZATION Digitizing current Asia point of sale tools (needs, illustration, application, fulfillment) interactions and Web and mobile functionality in Canada and Asia processes U.S. dental provider access Use digital to be Predictive
Slide 9: Well positioned to leverage global trends
WELL POSTIONED TO LEVERAGE GLOBAL TRENDS Demographic Downloading of Growing Digital Shifts Responsibility Prosperity in Asia Transformation Changing population Increasing shift in Growing demand for Digital, data and including the aging responsibility from products and services analytics changing of
Slide 10: Delivering value to shareholders
DELIVERING VALUE TO SHAREHOLDERS TOTAL SHAREHOLDER RETURN NET INCOME1 FIVE YEARS AS OF ($ millions) MARCH 31, 2019 (Annualized) EPS CAGR SLF Inc. 8%* 2,947 2,894 2,546 2,522 2,485 2,476 2,335 Global Lifecos 2,149 TSX Canadian Lifecos U.S. Lifecos 2016 2017 2018 LTM** Q1'19 0% 2% 4% 6% 8% 10% Source:
Slide 11: Balanced and diversified business
BALANCED AND DIVERSIFIED BUSINESS BUSINESS DIVERSIFICATION GEOGRAPHIC DIVERSIFICATION Q1’19 UNDERLYING NET INCOME1* Q1’19 UNDERLYING NET INCOME1* SLF U.K. Run-off 6% 11% Asset Management SLF U.S. SLF Canada 29% 19% 30% Group Insurance 24% Wealth SLF Asia 13% 16% SLF Asset Individual Insurance *Exclu
Slide 12: Business group performance
BUSINESS GROUP PERFORMANCE REPORTED NET INCOME UNDERLYING NET INCOME1 ($ millions) ($ millions) Impact of currency increased reported net income by $21M Impact of currency increased underlying net income by $22M 295 237 231 227 249 237 219 210 150 129 128 122 124 133 96 80 CAN US AM ASIA CAN US AM A
Slide 13: SLF Canada: Canada is a growth market for Sun Life
SLF CANADA: CANADA IS A GROWTH MARKET FOR SUN LIFE Q1’19 HIGHLIGHTS Maintained leadership position in our Group Benefits business, ranking #1 based on 2018 year- end insured premiums and non-insured deposits1 ASSETS UNDER UNDERLYING NET MANAGEMENT2 INCOME2 Collaborated with Rise People Inc. to l
Slide 14: SLF Canada: Sun Life is well positioned to shape the industry
SLF CANADA: SUN LIFE IS WELL POSITIONED TO SHAPE THE INDUSTRY AND CAPITALIZE ON OPPORTUNITIES Supporting Clients with Shaping the market through Innovation and Digital Capabilities holistic advice at moments that matter Digitally enabled Client touchpoints provide on demand services Investment i
Slide 15: SLF Asset Management: Expanding capabilities and exceptional investment performance
SLF ASSET MANAGEMENT: EXPANDING CAPABILITIES ACROSS OUR ASSET CLASSES AND DELIVERING EXCEPTIONAL INVESTMENT PERFORMANCE UNDERLYING NET INCOME1 Q1’19 HIGHLIGHTS ($ millions ) MFS ranked in the top ten for both the five and ten-year firm-wide performance categories for 10 of the last 11 years, in Ba
Slide 16: SLF Asset Management: MFS is a leader in long-term performance
SLF ASSET MANAGEMENT: MFS IS A LEADER IN LONG-TERM PERFORMANCE Average Barron's 10-year Ranking Over the Last 5 Years 0 for Firms Who Made the Top 20 all 5 Years 3.8 4.8 (Average Barron's Ranking) 5 6.0 7.8 8.0 9.8 10 15.0 15 20 MFS T Rowe Vanguard John Hancock JP Morgan Delaware Columbia Barron’s r
Slide 17: SLF Asset Management: SLIM leveraging a strong foundation for growth
SLF ASSET MANAGEMENT: SUN LIFE INVESTMENT MANAGEMENT IS LEVERAGING A STRONG FOUNDATION FOR CONTINUED GROWTH SLIM Develop strategy capabilities Leverages Sun Life’s Develop capabilities, experience in LDI launch new products strategies and and maintain strong alternative asset performance classes Aug
Slide 18: SLF U.S.: Extending our reach in U.S. Group Benefits
SLF U.S.: EXTENDING OUR REACH AND DEEPENING CLIENT RELATIONSHIPS IN U.S. GROUP BENEFITS Q1’19 HIGHLIGHTS UNDERLYING NET AFTER-TAX INCOME1 PROFIT MARGIN FOR SLF U.S. Group Benefits sales increased 11% in (US$ millions) G R O U P B E N E F I T S 1,2 constant currency, compared to the same quarter in
Slide 19: SLF U.S.: Well positioned to grow through U.S. market opportunities
SLF U.S.: WELL POSITIONED TO GROW THROUGH U.S. MARKET OPPORTUNITIES U.S. Employee Benefits U.S. Stop-Loss Market Market Opportunity Opportunity Employees responsible for more 61%3 of U.S. employees are covered by a health and benefits costs but lack self-insured plan with a trend of smaller educatio
Slide 20: SLF Asia: Well positioned in Asia's largest and fastest growing markets
SLF ASIA: WELL POSITIONED IN ASIA’S LARGEST AND FASTEST GROWING MARKETS UNDERLYING NET INCOME1 Q1’19 HIGHLIGHTS ($ millions) SLF Asia was recognized with awards in Hong Kong2 and Indonesia3 for our My Sun Life Client app, and as the "Most Innovative Takaful Provider"4 in Malaysia 458 461 523 517
Slide 21: SLF Asia: Well-positioned to capture growth opportunities
SLF ASIA: WELL-POSITIONED TO CAPTURE GROWTH OPPORTUNITIES 17% Total Company #1 ranked insurance1 company for 7 Insurance: 7th in Agency3 Underlying Net PHILIPPINES years in a row HONG KONG 2nd largest MPF based on Income* from 3rd largest mutual fund2 provider based on net inflows, #4 based
Slide 22: Business Overview, Capital, Asset Portfolio, ESG
1 2 3 4 BUSINESS CAPITAL ASSET ENVIRONMENTAL, OVERVIEW SOCIAL, MANAGEMENT PORTFOLIO GOVERNANCE Q1 2019 | Sun Life Financial | 22
Slide 23: Capital generation provides good capital flexibility
CAPITAL GENERATION PROVIDES GOOD CAPITAL FLEXIBILITY Funding Organic Growth Target Dividend Payout M&A Opportunities Share Buybacks ratio of 40-50% and Strategic Investments Strong Capital Generation Capital Flexibility Capital deployment priorities unchanged Target minimum cash at the holding c
Slide 24: Strong capital position with significant deployment potential
STRONG CAPITAL POSITION WITH SIGNIFICANT DEPLOYMENT POTENTIAL 1 CAPITAL DEPLOYMENT POTENTIAL ($ billions) DEPLOYMENT DESCRIPTION/CONSIDERATIONS Cash 2 OPPORTUNITIES $2.1 Making further investments in building out new Organic Investments business models and advancing our leading digital capabilities
Slide 25: Financial flexibility under capital model
FINANCIAL FLEXIBILITY UNDER CAPITAL MODEL LICAT 145% Leverage 21.1% SLF $2.6 billion cash at holding company Leverage Capacity SLF - External Capital Securities to 25/30%: ~$1.5/$3.6B Subordinated Debt Coupon Outstanding First Call Balance Date SLF T2B (Series 2007-1) 5.40% $398 29-May-37 SLF T2B (S
Slide 26: Strong operating and financial leverage
STRONG OPERATING AND FINANCIAL LEVERAGE Operating Leverage Debt (C$ millions) Q1 2019 Debt supporting reserve financing Operating Senior Debt 599 Leverage Bilateral Senior Financing1 2,066 Total Operating Leverage Debt 2,665 Capital (C$ millions) Q1 2019 Tier 2 Subordinated Debt 3,040 SLEECS (Innova
Slide 27: LICAT capital framework
LICAT CAPITAL FRAMEWORK TOTAL TOTAL RATIO RATIO Available Capital + Surplus Allowance Base Solvency Buffer TOTAL RATIO (SLF Inc.) = 145% AVAILABLE CAPITAL SURPLUS ALLOWANCE BASE SOLVENCY + ELIGIBLE DEPOSITS BUFFER Similar to MCCSR Sum of aggregate capital Essentially the provisions for Retai
Slide 28: Business Overview, Capital, Asset Portfolio, ESG
1 2 3 4 BUSINESS CAPITAL ASSET ENVIRONMENTAL, OVERVIEW SOCIAL, MANAGEMENT PORTFOLIO GOVERNANCE Q1 2019 | Sun Life Financial | 28
Slide 29: High quality, well diversified investment portfolio
HIGH QUALITY, WELL DIVERSIFIED INVESTMENT PORTFOLIO INVESTMENT PROFILE DEBT SECURITIES BY RATING (as at March 31, 2019) (as at March 31, 2019) Leading non-public portfolio with Policy Loans and significant origination capabilities BB and lower Investment Other Properties 6% Cash and Cash 1% Stro
Slide 30: Business Overview, Capital, Asset Portfolio, ESG
1 2 3 4 BUSINESS CAPITAL ASSET ENVIRONMENTAL, OVERVIEW SOCIAL, MANAGEMENT PORTFOLIO GOVERNANCE Q1 2019 | Sun Life Financial | 30
Slide 31: Strong commitment to sustainability
STRONG COMMITMENT TO SUSTAINABILITY Sustainable Investing Financial Security Healthier Lives $15 invested in sustainable financial literacy $25 committed to diabetes infrastructure to date campaigns in Asia globally billion million reduction in GHG emissions documents rewritten Ella, our digital coa
Slide 32: 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 33: 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
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