Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q2 2024 Earnings Presentation
24 slides from Sun Life Financial's earnings presentation, Aug 13, 2024
Slide 1: Q2'24 financial & operating results
Q2’24 financial & operating results For the period ended June 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 – Q2 2024 3
Slide 4: Q2 2024 financial highlights
Q2 2024 financial highlights Delivering on our Purpose to help Clients achieve lifetime financial security and live healthier lives Executing on our ambition to be one of the best asset management and insurance companies in the world Profitability Financial Strength Growth Underlying net income1 Und
Slide 5: Progress on our Client Impact strategy
Progress on our Client Impact strategy Our Purpose: Help Clients achieve lifetime Advancing digital and innovation to support Client health and financial security financial security and live healthier lives Scaling generative artificial intelligence (GenAI) with over 1000 colleagues involved in 20
Slide 6: Tim Deacon, Executive Vice President & Chief Financial Officer
Tim Deacon Executive Vice President & Chief Financial Officer Sun Life – Q2 2024 6
Slide 7: Q2 2024 results
Q2 2024 results Profitability ($ millions) Q2’24 Q2’23 Change Results Highlights Wealth & asset management 455 419 +9% Strong financial performance, reflecting strength of diversified business: Group - Health & Protection 305 360 (15)% • Wealth & asset management: up 9% y/y on higher fee income acro
Slide 8: Q2 2024 results
Q2 2024 results Underlying net income1 ($ millions) Reported net income ($ millions) Impact of currency translation increased underlying net income by $9M2 Impact of currency translation increased reported net income by $10M2 AM CAN U.S. ASIA CORP AM CAN U.S. ASIA CORP 402 372 307 296 292 274 248 20
Slide 9: MFS: A global leader in public asset management
MFS: A global leader in public asset management Business Group Results (US$) Quarterly Highlights (US$) Profitability Q2’24 Q2’23 Change • Underlying net income up 4% compared to the prior year as higher fee income Underlying net income1 ($ millions) 194 187 +4% from ANA growth was partially offset
Slide 10: SLC Management: Growing a premier alternatives platform
SLC Management: Growing a premier alternatives platform Business Group Results Quarterly Highlights Profitability Q2’24 Q2’23 Change • Underlying net income down 5% y/y as fee-related earnings growth was Fee-related earnings1 ($ millions) 65 62 +5% more than offset by lower net seed investment incom
Slide 11: Canada: A leader in health, wealth, and insurance
Canada: A leader in health, wealth, and insurance Business Group Results Quarterly Highlights Profitability Q2’24 Q2’23 Change • Underlying net income up 8% y/y on strong insurance business growth, higher Wealth & asset management ($ millions) 130 110 +18% fee-related earnings, and higher investment
Slide 12: U.S.: A leader in health & benefits
U.S.: A leader in health & benefits Business Group Results (US$) Quarterly Highlights (US$) Profitability Q2’24 Q2’23 Change • Underlying net income down 7% y/y driven by Group results Group - Health & Protection ($ millions) 112 149 (25)% • Group - Health & Protection earnings down 25% y/y on lower
Slide 13: U.S.: Dental outlook
U.S.: Dental outlook Key Highlights U.S. Dental Medicaid membership3 and loss ratios4 • YTD Q2’24 Dental underlying net loss of US$6M driven by temporary impacts related to Medicaid redeterminations1: 32.0 96.0% • State governments have disenrolled ~19% of Medicaid members as of June 94.0% 2024 with
Slide 14: Asia: A regional leader focused on fast-growing markets
Asia: A regional leader focused on fast-growing markets Business Group Results Quarterly Highlights (% in constant currency1) Profitability Q2’24 Q2’23 Change CC1 • Underlying net income up 19% y/y on strong business growth Individual - Protection ($ millions) 176 144 +22% +21% Wealth & asset manage
Slide 15: Appendix
Appendix Sun Life – Q2 2024 15
Slide 16: Drivers of earnings
Drivers of earnings1 Underlying drivers of earnings (DOE) Non-underlying net income adjustments Q2’24 Q1’24 Q2’23 Q2’24 Q1’24 Q2’23 $ millions, pre-tax $ millions, post-tax Risk adjustment release 104 101 103 Common shareholders’ underlying net income (loss) 1,000 875 920 Contractual service margin
Slide 17: DOE experience gains/(losses) – details
DOE experience gains/(losses)1 – details Pre-tax Post-tax $ millions Q2’24 Q1’24 Q2’23 Q2’24 Q1’24 Q2’23 Net equity market impact (12) 19 (13) (8) 12 (13) Net interest rate impact (42) 104 (152) (52) 40 (99) Impact of changes in the fair value of investment properties (115) (149) (133) (93) (122) (1
Slide 18: Contractual service margin movement analysis
Contractual service margin movement analysis1 $ millions, pre-tax Q2’24 Q1’24 Q2’23 CSM Highlights CSM at beginning of period 12,141 11,786 11,243 • Total CSM ended Q2’24 at $12.5 billion, up 11% y/y largely driven by organic CSM Impact of new insurance business2 437 347 270 growth reflecting strong
Slide 19: Earnings on surplus – Supplemental details
Earnings on surplus – Supplemental details Earnings on surplus – EOS Highlights supplemental details $ millions, pre-tax Q2’24 Q1’24 Q2’23 • Core investment income down q/q due to lower yields and modestly lower surplus Core investment income 163 168 152 balance Realized investment gains / (losses)
Slide 20: Credit experience – Supplemental details
Credit experience– Supplemental details Credit experience – supplemental details $ millions, pre-tax Q2’24 Q1’24 Ratings/Net impairments1 (12) (32) Expected credit loss2 (2) 5 Credit experience (14) (27) Release of credit within expected investment 35 36 earnings3 Net Credit Experience 21 9 1 On fai
Slide 21: Save the date: Sun Life Investor Day 2024
Save the date Sun Life Investor Day 2024 November 13, 2024 Registration to follow in September 2024 Sun Life – Q2 2024 21
Slide 22: 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 23: 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 24: 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