Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q3 2024 Earnings Presentation
26 slides from Sun Life Financial's earnings presentation, Nov 5, 2024
Slide 1: Q3'24 financial & operating results
Q3'24 financial & operating results For the period ended September 30, 2024 Sun Life Financial Inc. (unaudited)
Slide 2: Forward-looking statements and 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 collectively referred to as “we”, “us”, “our”, “Sun Life” and the “Company”. Reported net income (loss) refers to Common shareholders' net income (loss)
Slide 3: Kevin Strain, President and Chief Executive Officer
Kevin Strain President and Chief Executive Officer Sun Life – Q3 2024 3
Slide 4: Q3 2024 financial highlights
Q3 2024 financial highlights Profitability Financial Strength Growth Underlying net income1 Underlying ROE1 Assets under management1 $1,016 M +9% 17.9% $1.5 T +13% Reported net income Reported ROE1 Net wealth sales & AM net flows1 $1,348 M +55% 23.8% $(17.2) B (89)% Underlying EPS1 SLF Inc. LICAT ra
Slide 5: Our winning strategy
Our winning strategy Our Purpose: Help Clients achieve lifetime financial security and live healthier lives Our Values: Caring, Authentic, Bold, Inspiring, Impactful Four Pillars Client Impact Strategic Imperatives A global leader in both public and Leverage our asset management AM alternative asset
Slide 6: Delivering on our Purpose and strategy
Delivering on our Purpose and strategy Asset Management and Wealth Asia Health Delivered strong MFS investment performance Delivered strong Individual - Protection sales Delivered strong earnings in both Canada and • Highest AUM since Q1 2022 – including steady U.S. Group - Health & Protection • Gro
Slide 7: Tim Deacon, Executive Vice President & Chief Financial Officer
Tim Deacon Executive Vice President & Chief Financial Officer Sun Life – Q3 2024 7
Slide 8: Q3 2024 results
Q3 2024 results Profitability ($ millions) Q3'24 Q3'23 Change Results Highlights Wealth & asset management 474 457 +4% Strong financial performance, reflecting strength of diversified business: Group - Health & Protection 345 285 +21% • Wealth & asset management: up 4% y/y on higher fee income acros
Slide 9: Q3 2024 results
Q3 2024 results Underlying net income1 ($ millions) Reported net income ($ millions) Impact of currency translation increased underlying net income by $11M2 Impact of currency translation increased reported net income by $22M2 AM CAN U.S. ASIA CORP AM CAN U.S. ASIA CORP 375 644 344 330 338 219 382 3
Slide 10: MFS: A global leader in public asset management
MFS: A global leader in public asset management Business Group Results (US$) Quarterly Highlights (US$) Profitability Q3'24 Q3'23 Change • Underlying net income up 5% compared to the prior year as higher fee income Underlying net income1 ($ millions) 218 207 +5% from ANA growth was partially offset
Slide 11: SLC Management: Growing a premier alternatives platform
SLC Management: Growing a premier alternatives platform Business Group Results Quarterly Highlights Profitability Q3'24 Q3'23 Change • Underlying net income down 11% y/y as fee-related earnings growth was Fee-related earnings1 ($ millions) 72 68 +6% more than offset by one-time tax adjustment benefi
Slide 12: Canada: A leader in health, wealth, and insurance
Canada: A leader in health, wealth, and insurance Business Group Results Quarterly Highlights Profitability Q3'24 Q3'23 Change • Underlying net income up 11% y/y on higher fee-based income and strong Wealth & asset management ($ millions) 101 116 (13)% insurance business growth, partially offset by
Slide 13: U.S.: A leader in health & benefits
U.S.: A leader in health & benefits Business Group Results (US$) Quarterly Highlights (US$) Profitability Q3'24 Q3'23 Change • Underlying net income up 15% y/y driven by strong business growth Group - Health & Protection ($ millions) 127 112 +13% • Group - Health & Protection earnings up 13% y/y on
Slide 14: Asia: A regional leader focused on fast-growing markets
Asia: A regional leader focused on fast-growing markets Business Group Results Quarterly Highlights (% in constant currency1) Profitability Q3'24 Q3'23 Change CC1 • Underlying net income up 1% y/y on higher fee income offset by mortality Individual - Protection ($ millions) 158 175 (10)% (11)% exper
Slide 15: Appendix
Appendix Sun Life – Q3 2024 15
Slide 16: Drivers of earnings
Drivers of earnings1 Underlying drivers of earnings (DOE) Non-underlying net income adjustments Q3'24 Q2’24 Q3’23 Q3'24 Q2’24 Q3’23 $ millions, pre-tax $ millions, post-tax Risk adjustment release 101 104 114 Common shareholders’ underlying net income (loss) 1,016 1,000 930 Contractual service margi
Slide 17: DOE experience gains/(losses) – details
DOE experience gains/(losses)1 – details Pre-tax Post-tax $ millions Q3'24 Q2’24 Q3'23 Q3'24 Q2’24 Q3'23 Net equity market impact 48 (12) (24) 36 (8) (21) Net interest rate impact (3) (42) 228 38 (52) 127 Impact of changes in the fair value of investment properties (57) (115) (97) (45) (93) (83) Mar
Slide 18: Contractual service margin movement analysis
Contractual service margin movement analysis1 $ millions, pre-tax Q3'24 Q2’24 Q3'23 CSM Highlights CSM at beginning of period 12,512 12,141 11,258 • Total CSM ended Q3'24 at $12.8 billion, up 12% y/y largely driven by organic CSM Impact of new insurance business2 383 437 370 growth Expected movement
Slide 19: Assumption changes and management actions
Assumption changes and management actions Reported net income impacts Deferred in CSM ($ millions) (After tax)1, 2 (Pre-tax) 2, 3 Comments Updates to reflect mortality and morbidity experience in all jurisdictions. The largest items were favourable Mortality/morbidity (69) 184 mortality impacts in G
Slide 20: Earnings on surplus – Supplemental details
Earnings on surplus – Supplemental details Earnings on surplus – EOS Highlights supplemental details $ millions, pre-tax Q3'24 Q2’24 Q3'23 • Core investment income down q/q due to lower cash balance and surplus Core investment income 151 163 169 holdings, as well as lower yields Realized investment
Slide 21: Credit experience – Supplemental details
Credit experience– Supplemental details Credit experience – supplemental details $ millions, pre-tax Q3'24 Q2’24 Q1’24 Ratings/Net impairments1 (71) (12) (32) Expected credit loss2 (9) (2) 5 Credit experience (80) (14) (27) Release of credit within expected investment 37 35 36 earnings3 Net Credit E
Slide 22: Q2'24 Restructuring & savings program
Q2’24 Restructuring & savings program Restructuring & Savings Program Cost Efficiencies by Value Stream • In Q2’24, Sun Life announced a restructuring charge of $108 million (post-tax) reflecting actions taken to improve productivity and support earnings growth to the higher end of our medium-term f
Slide 23: Registration: Sun Life Investor Day 2024
Registration Sun Life Investor Day 2024 November 13, 2024 For more details on our Investor Day, please visit our webpage here Sun Life – Q3 2024 23
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 these measures provide information that is useful to investors in understanding our performance and facilitate a comparison of our quarterly and full year results from per
Slide 25: 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 26: Footnotes
Footnotes From slide 4 2 Impact of new insurance business on CSM, also referred to as "new business CSM”, represents growth from sales activity in the period, including individual protection sales (excluding joint ventures), and defined benefit solutions and segregated fund wealth sales in Canada. 3