Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q1 2023 Earnings Presentation
22 slides from Sun Life Financial's earnings presentation, May 12, 2023
Slide 1: Q1'23 financial & operating results
Q1’23 financial & operating results For the period ended March 31, 2023 Sun Life Financial Inc. (unaudited)
Slide 2: Forward-looking statements and note to readers
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”. Reported net income (loss) refers to Common shareholders' net income (loss) determined in
Slide 3: Kevin Strain, President and Chief Executive Officer
Kevin Strain President and Chief Executive Officer Sun Life – Q1 2023 3
Slide 4: Q1 2023 financial highlights
Q1 2023 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 globally Profitability Financial Strength Diversified Business Mix4 Underlying
Slide 5: Progress on our Client Impact strategy
Progress on our Client Impact strategy Our Purpose: Help Clients achieve lifetime Delivering positive Client Impact by improving access to healthcare financial security and live healthier lives Expanded our partnership in the U.S. with AbleTo to offer an on-demand wellness program for our life ins
Slide 6: Manjit Singh, Executive Vice President & Chief Financial Officer
Manjit Singh Executive Vice President & Chief Financial Officer Sun Life – Q1 2023 6
Slide 7: Q1 2023 results – Strong underlying ROE of 17.3%
Q1 2023 results – Strong underlying ROE1 of 17.3% Profitability Q1’23 Q1’22 Change Results Highlights Underlying net income1 ($ millions) 895 720 +24% Earnings reflect strong business fundamentals and diversified business mix6 Reported net income ($ millions) 806 665 +21% • Wealth & asset management
Slide 8: Q1 2023 results
Q1 2023 results Underlying net income1 ($ millions) Reported net income ($ millions) Impact of currency translation increased underlying net income by $32M2 Impact of currency translation increased reported net income by $28M2 321 316 329 282 311 237 254 256 206 168 133 141 134 107 111 56 (47) (69)
Slide 9: MFS: A global leader in public asset management
MFS: A global leader in public asset management Business Group Results (US$) Quarterly Highlights (US$) • Underlying net income down 15% y/y mostly reflecting lower ANA driven by Profitability Q1’23 Q1’22 Change lower equity markets and net outflows Underlying net income1 ($ millions) 188 221 (15)%
Slide 10: SLC Management: Growing a premier alternatives platform
SLC Management: Growing a premier alternatives platform Business Group Results Quarterly Highlights • Fee-related earnings up 26% y/y on higher fee-earning AUM, reflecting strong Profitability Q1’23 Q1’22 Change capital raising and deployment across the platform over the past year Fee-related earnin
Slide 11: Canada: A leader in health, wealth, and insurance
Canada: A leader in health, wealth, and insurance Business Group Results Quarterly Highlights Profitability Q1’23 Q1’22 Change • Underlying net income up 53% y/y; Reported net income up 29% y/y including Wealth & asset management ($ millions) 114 80 +43% a gain on sale of the sponsored markets busin
Slide 12: U.S.: A leader in health & benefits
U.S.: A leader in health & benefits Business Group Results (US$) Quarterly Highlights (US$) Profitability Q1’23 Q1’22 Change • Underlying net income up 112% y/y; Reported net income of $125 million Group - Health & Protection ($ millions) 154 51 +202% includes market-related impacts and DentaQuest i
Slide 13: 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 Q1’23 Q1’22 Change CC1 • Underlying net income up 4% y/y; Reported net income of $134 million Wealth & asset management ($ millions) 15 21 (29)% (29)% includes
Slide 14: Appendix
Appendix Sun Life – Q1 2023 14
Slide 15: IFRS 17 transition – Strong capital position and underlying ROE objective of 18%+
IFRS 17 transition – Strong capital position and underlying ROE1 objective of 18%+ Transition impacts in-line with estimates2 Re-affirming medium-term financial objectives6 Estimated IFRS 17 transition impacts impact Actual result Medium-term financial objective 15-20% Common shareholders’ equity im
Slide 16: Drivers of earnings
Drivers of earnings Drivers of earnings (DOE)1 Reported1 Underlying1 $millions, pre-tax Q1’23 Q1’22 Q1’23 Q1’22 Q1’23 DOE Highlights Risk adjustment release 95 94 95 94 Contractual service margin recognized for services Total net insurance service result: 199 200 199 200 provided • Expected insuranc
Slide 17: DOE experience gains/(losses) – details
DOE experience gains/(losses)1 – details2 Pre-tax Post-tax $millions Q1’23 Q1’22 Q1’23 Q1’22 Net equity market impact2 15 (34) 13 (29) Net interest rate impact2,3 (7) 135 16 (41) Impact of changes in the fair value of investment properties2,3 (98) 71 (86) 68 Market-related impacts2 (90) 172 (57) (2)
Slide 18: Contractual service margin movement analysis
Contractual service margin movement analysis $millions, pre-tax Q1’23 FY’22 CSM Highlights CSM at beginning of period 10,865 9,797 • Total CSM ended Q1'23 at $11.2 billion, an increase of $0.4 billion or 3% in the Impact of new insurance business1 257 929 quarter, reflecting: Expected movements from
Slide 19: Earnings on surplus – Supplemental details
Earnings on surplus – Supplemental details Earnings on surplus – supplemental details $millions, pre-tax Q1’23 Q1’22 Core investment income 134 105 Realized investment gains / (losses) 22 3 Other1 15 (14) Earnings on surplus 171 94 Interest on debt (80) (52) Earnings on surplus net of debt cost 91 4
Slide 20: 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 21: 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 22: Footnotes
Footnotes From slide 4 2 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 Life Insurance Capital Adequacy Test (“LICAT”) ratio of SLF Inc