Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q1 2009 Earnings Presentation
21 slides from Sun Life Financial's earnings presentation, May 7, 2009
Slide 1: First Quarter 2009 Financial and Operating Results
Q1 First Quarter 2009 Financial and Operating Results For the period ended March 31, 2009 Sun Life Financial Inc. (unaudited) May 7th, 2009 Forward-Looking Statements Q1 Certain statements contained in this document, including those relating to the Company’s strategies and other statements that are
Slide 2: Strength. Insight. Confidence.
Q1 Donald A. Stewart Chief Executive Officer, Sun Life Financial Q1 2009 Q1 • Strength. Insight. Confidence. –Well capitalized –Strong customer franchise –Diversified and balanced business model –Flight to quality generating sales momentum –Investing in growth 4
Slide 3: Fully Diluted Operating EPS
Q1 Rick McKenney Executive Vice-President & Chief Financial Officer, Sun Life Financial Q1 Fully Diluted Operating EPS (C$) 0.93 Q1'08 Q1'09 (0.33) 6
Slide 4: Asset Impairments and Reserve Impacts
Q1 Asset Impairments Net Income Diluted Operating EPS C$ millions ($) Credit Related (34) (0.06) Equity Related (42) (0.08) Total (76) (0.14) 7 Q1 Reserve Impacts Net Income Diluted Operating EPS C$ millions ($) Downgrades (167) (0.30) Equity Markets (325) (0.58) Other (94) (0.17) Total (586) (1.05)
Slide 5: Source of Earnings and Performance by Business Group
Q1 Source of Earnings – Common Shareholders * (C$ millions) Q1'09 Q1'08 Change Expected profit on in-force business 426 461 (35) Impact of new business (99) (79) (20) Experience gains or losses (758) (50) (708) Assumption changes and management actions (88) 174 (262) Earnings on operations (519) 506
Slide 6: Investment Portfolio and Capital Management
Q1 Investment Portfolio • Asset class Diversified • Geography • Issue limits • Do not invest in below investment grade Conservative • Investment decisions are long-term and liability matched • Over 80% of securitized commercial mortgages originated in 2005 and prior Seasoned • Average loan to value
Slide 7: Premiums and Deposits; Sales Performance by Business Group
Q1 Premiums and Deposits (C$ millions) 19,493 17,506 3,745 3,443 9,084 8,500 5,563 6,664 Q1'08 Q1'09 (1) Managed Funds Wealth Products Life & Health (1) Includes mutual funds, segregated funds and annuities 13 Q1 Sales Performance by Business Group • Continue to see solid sales momentum –SLF Canada
Slide 8: Looking Ahead / Questions & Answers
Looking Ahead Q1 • Well positioned –Financially strong –Well capitalized –Strong enterprise risk management –Diversified, conservative and well seasoned investment portfolio • Investing in growth 15 Q1 Questions & Answers 16
Slide 9: Appendix: Assets Under Management
Q1 Appendix 17 Assets Under Management Q1 (C$ billions) 415 413 389 381 375 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 MFS and Other 228 226 207 195 188 Segregated Funds 72 73 69 66 66 General Funds 115 114 113 120 121 18
Slide 10: 2008 Embedded Value
2008 Embedded Value Q1 ($C millions) 2007 2008 Embedded value at January 1 17,249 17,002 Expected growth on in-force business 1,351 1,434 Experience variances and changes in actuarial assumptions 685 (4,297) (1) Value of new business (VNB) 892 854 Embedded value before discount rate changes, currenc
Slide 11: Updated Sensitivities
Updated Sensitivities Q1 Income Equity Market An immediate 10% increase across all An immediate 10% decrease across all equity markets is projected to result in: equity markets is projected to result in: An estimated increase in net income of An estimated decrease in net income of $250-$325 million
Slide 12: SLF Canada
Q1 SLF Canada Net Income (C$ millions) 247 194 Q1'08 Q1'09 Group Wealth 49 52 Group Benefits 49 65 Individual Insurance & 149 77 Investments 23 Q1 SLF Canada Individual Insurance Individual Wealth Sales Sales (C$ millions) (C$ millions) 1,218 1,110 229 389 35 29 989 10 721 6 25 23 Q1'08 Q1'09 Q1'08
Slide 13: SLF Canada Group; SLF U.S.
Q1 SLF Canada Group Wealth Group Benefits Asset Under Administration Business In-Force (C$ billions) (C$ billions) 74.2 61.9 6.7 6.3 Q1'08 Q1'09 Q1'08 Q1'09 25 Q1 SLF U.S. (US$ millions) Net Income 113 (333) Q1'08 Q1'09 Employee Benefits 19 48 Group Individual Ins. 19 (57) Annuities 75 (324) 26
Slide 14: SLF U.S. Annuity and Insurance Sales
Q1 SLF U.S. Annuity Gross Sales Annuity Net Sales (US$ millions) (Redemptions) (US$ millions) 1,155 105 996 (406) Q1'08 Q1'09 Q1'08 Q1'09 Fixed 90 407 Fixed (330) 137 Fixed Index 85 59 Fixed Index (88) (145) Other Variable 283 108 Other Variable 164 (36) Variable 538 581 Variable (152) 149 27 Q1 SLF
Slide 15: MFS
Q1 MFS Net Income Pre-Tax (US$ millions) Operating Margin 59 35% 21% 23 Q1'08 Q1'09 Q1'08 Q1'09 29 Q1 MFS Net Sales Assets Under Management (US$ billions) (US$ billions) (2.7) 0.2 Q1’08 Q1’09 184 124 Q1'08 Q1'09 Retail Mutual Funds Gross New Sales 4.9 4.1 Redem ptions (6.8) (4.7) Net New Sales (1.9)
Slide 16: SLF Asia; Invested Assets
SLF Asia Q1 Net Income Sales (1) (C$ millions) (C$ millions) 281 259 17 13 Q1'08 Q1'09 Q1'08 Q1'09 (1) Includes 100% of the sales of the Company’s joint ventures in China and India. 31 Q1 Invested Assets 32
Slide 17: Invested Assets Diversified by Geography and Type
Q1 Invested Assets Diversified by geography Carrying Value* 2007 2008 Q1 2009 $100 billion $104 billion $104 billion 5% 10% 11% 7% 7% 6% 45% 44% 40% 48% 39% 38% Canada U.S. U.K. Asia & Other * Excludes policy loans. 33 Q1 Invested Assets Diversified by type Carrying Value* 2007 2008 Q1 2009 $100 bil
Slide 18: Bonds – Diversification
Q1 Bonds – Diversification As of March 31, 2009 Ratings Breakdown Sector Breakdown 4% 19% 24% 28% 29% 17% 8% 10% 7% 6% 5% 2% 5% 31% 5% Financials AAA Securitization AA Consumer Staples A Energy BBB Industrials Below Investment Grade Materials Telecommunication Services Utilities 35 Government Q1 Bon
Slide 19: Public Bonds Below Investment Grade; Structured Products
Q1 Public Bonds – Below Investment Grade As of March 31, 2009 • Below investment grade of 4% is in the Sector Breakdown low range compared to competitors 4% Ratings Breakdown 19% 33% 4% 3% 1% 7% 6% 1% 9% 1% 13% 23% 76% Consumer Discretionary Financials BB B CCC CC C D Governments Industrials Materia
Slide 20: CMBS by Vintage; Commercial Mortgages
Q1 CMBS by Vintage based on Market Value As of March 31, 2009 A seasoned portfolio with much lower exposure to troubled 2006-2007 vintages compared to average 30 Sun Life Barclays CMBS Index 25 24.3 22.0 20.5 20 18.8 15 % 12.2 11.6 10.5 10.4 10 8.0 8.1 7.4 6.9 6.2 6.1 6.0 5.8 5.8 5 3.2 2.2 1.3 0.1 0
Slide 21: Commercial Mortgages by Credit Quality
Q1 Commercial Mortgages by Credit Quality Carrying Value March 31, 2009 Canada United States North America C$8.6 billion Other C$7.1 billion C$15.7 billion 0% Other Other Other 1% 4% Satisfactory 2% 9% NHA Satisfactory NHA Satisfactory 11% 8% 22% 10% High 35% Standard High 33% Standard 36% 41% High