Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q1 2008 Earnings Presentation
27 slides from Sun Life Financial's earnings presentation, May 2008
Slide 1: First Quarter 2008 Financial and Operating Results
Q1 First Quarter 2008 Financial and Operating Results For the period ended March 31, 2008 Sun Life Financial Inc. (unaudited)
Slide 2: Forward-Looking Statements
Forward-Looking Statements Q1 Certain statements in this presentation, including those relating to the Company’s strategies and other statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as “expects”, “anticipates”, “intends”,
Slide 3: Donald A. Stewart, Chief Executive Officer
Q1 Donald A. Stewart Chief Executive Officer, Sun Life Financial
Slide 4: Q1 2008
Q1 Q1 2008 • Challenging economic environment • Strong balance sheet and capital position • Sound business fundamentals and strategy 4
Slide 5: Rick McKenney, Chief Financial Officer
Q1 Rick McKenney Executive Vice-President & Chief Financial Officer, Sun Life Financial
Slide 6: Fully Diluted EPS
Q1 Fully Diluted EPS Full Diluted EPS Fully Diluted Operating EPS 0.93 1.01 0.86 0.96 0.93 Q1'07 Q1'08 Q1'07 Q1'08 Q1'08 Constant Currency 6
Slide 7: Sources of Earnings
Q1 Sources of Earnings (C$ millions) Q1'08 Q1'07 Change Expected profit on in-force business 530 505 25 Impact of new business (79) (152) 73 Experience gains or losses (36) 45 (81) Management actions / changes in assumptions 174 163 11 (1) Other - (82) 82 Earnings on operations 589 479 110 Earnings
Slide 8: Premiums and Deposits
Q1 Premiums and Deposits (C$ millions) 22,142 3,884 19,737 17,660 3,656 3,443 10,155 9,675 8,654 8,103 6,406 5,563 Q1'07 Q1'08 Q1'08 Constant Currency (1) Managed Funds Other Wealth Products Life & Health (1) Includes mutual funds, segregated funds and annuities 8
Slide 9: Value of New Business
Q1 Value of New Business (C$ millions) 21% 885 730 LTM Q1 '07 LTM Q1 '08 Note: All amounts are based on 2007 annual average exchange rates. Q1’ 08 amounts are estimated. rates. MTNs are excluded and Q1’ 9 LTM refers to the last twelve months.
Slide 10: 2007 Embedded Value from Operations
Q1 2007 Embedded Value from Operations (C$ millions) 20,203 18,372 2006 2007 • Towers Perrin have confirmed that the methods and assumptions used to determine the EV at December 31, 2007 and the VNB written in 2007 are reasonable and consistent with the Canadian Institute of Actuaries’ draft paper o
Slide 11: Assets Under Management
Q1 Assets Under Management (C$ billions) 516 510 496 492 481 Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 CI Financial(1) 65 70 69 67 66 MFS and Other 256 251 241 238 228 Segregated Funds 73 73 73 73 72 General Funds 122 116 113 114 115 (1) Source: CI Financial company reports. Includes 100% of CI Financial Financ
Slide 12: Capital Management
Q1 Capital Management 23.2% 22.4% 22.0% 22.3% 22.0% 223% 217% 212% 213% 209% Q1'07 Q2'07 Q3'07 Q4'07 Q1'08 (1) (2) MCCSR Ratio Debt Ratio (1) Represents the MCCSR ratio of Sun Life Assurance Company of Canada Canada (2) Represents the ratio of sub debt, preferred shares, Partnership Cumulative Secur
Slide 13: Bond Portfolio Detail
Q1 Bond Portfolio Detail (C$ billions) As at March 31, 2008 Held for Available Total Investment Trading for Sale Grade Government Issues/ 12.2 1.8 14.0 98% Guaranteed Bonds Corporate Bonds 32.5 7.5 40.0 96% Asset Backed Bonds 5.6 .7 6.3 99% Total 50.3 10.0 60.3 97% 13
Slide 14: SLF Canada
Q1 SLF Canada (C$ millions) Net Income 250 247 Q1'07 Q1'08 Group Wealth 53 49 Group Benefits 51 49 Individual Insurance 146 149 & Investments ROE 14.3% 14.1% 14
Slide 15: SLF Canada Individual Sales
Q1 SLF Canada Individual Sales Individual Insurance Individual Wealth (C$ millions) (C$ millions) 1,162 1,110 36 35 10 480 389 10 26 25 682 721 Q1'07 Q1'08 Q1'07 Q1'08 Sun Life Financial Advisors Wholesale Seg Funds & Other Mutual Funds 15
Slide 16: SLF Canada
Q1 SLF Canada Group Retirement Services Group Benefits DC Plan Assets Business In-Force (C$ billions) (C$ billions) 6.3 32.2 5.8 31.2 Q1'07 Q1'08 Q1'07 Q1'08 16
Slide 17: SLF U.S.
Q1 SLF U.S. (US$ millions) Net Income 113 84 Q1'07 Q1'08 Employee Benefits (1) 19 Group Individual Insurance 5 19 Annuities 80 75 ROE 9.4% 10.7% 17
Slide 18: SLF U.S.
Q1 SLF U.S. Annuity Gross Sales Annuity Net Sales (US$ millions) (Redemptions) (US$ millions) 1,061 996 (287) (406) Q1'07 Q1'08 Q1'07 Q1'08 Fixed 191 90 Fixed (207) (330) Fixed Index 142 85 Fixed Index (25) (88) Other Variable 205 283 Other Variable 78 164 Variable 523 538 Variable (133) (152) 18
Slide 19: SLF U.S.
Q1 SLF U.S. Individual Insurance Employee Benefits Group Sales Business In-Force (US$ millions) (US$ billions) 2.0 79 1.2 40 19 15 (1) Retail BOLI/COLI/PPVUL Q1'07 Q1'08 Q1'07 Q1'08 Acquisition (1) Bank- Bank-owned life insurance (BOLI), Corporate- Corporate-owned life insurance (COLI), 19 Private p
Slide 20: MFS
Q1 MFS Net Income Pre-Tax (US$ millions) Operating Margin 61 59 34% 35% Q1'07 Q1'08 Q1'07 Q1'08 20
Slide 21: MFS
Q1 MFS Net Sales Assets Under Management (US$ billions) (US$ billions) 0.2 Q1’08 192 Q1’07 184 (2.7) Q1'07 Q1'08 Retail Mutual Funds Gross New Sales 5.2 4.9 Redem ptions (5.8) (6.8) Net New Sales (0.6) (1.9) Managed Funds Q1'07 Q1'08 Net New Sales 0.8 (0.8) Total Net New Sales 0.2 (2.7) 21
Slide 22: SLF Asia
Q1 SLF Asia Net Income Individual Life Insurance Sales(1) (C$ millions) (C$ millions) 38 259 135 13 Q1'07 Q1'08 ROE 13.5% 4.4% Q1'07 Q1'08 (1) Includes 100% of the sales of the Company’ Company’s joint ventures in China and India 22
Slide 23: Q1 2008 Outlook
Q1 2008 Outlook • Economic conditions remain challenging • Continue to execute on strategy • Continue to focus on efficiencies • Remain committed to financial objectives 23
Slide 24: Questions & Answers
Ql Questions & Answers Sun Life Financial
Slide 25: Appendix
Ql Appendix Sun Life Financial
Slide 26: Growth in Embedded Value
Q1 Growth in Embedded Value (C$ millions) 2006 2007 Embedded value at January 1 15,068 17,249 Expected growth on in-force business 1,251 1,351 Experience variances and changes in actuarial assumptions 1,263 685 (1) Value of new business (VNB) 789 918 Embedded value before discount rate changes, curr
Slide 27: Asset Backed Bonds
Q1 Asset Backed Bonds CMBS Market Investment • 92% is ‘AAA’ or pre-2006 Value Grade • 99% is fixed rate (C$ millions) As of March 31, 2008 Non-Agency RMBS Commercial Mortgage 2,372 99.6% • 91% is ‘AAA’ or pre-2006 Backed Securities • 86% is fixed rate (CMBS) CDO’s Residential Mortgage 1,338 99.9% •