Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — Q4 2023 Earnings Presentation
23 slides from Sun Life Financial's earnings presentation, Feb 8, 2024
Slide 1: Q4’23 financial & operating results
Q4’23 financial & operating results For the period ended December 31, 2023 Sun Life Financial Inc. (unaudited)
Slide 2: Forward-looking statements
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 – Q4 2023 3
Slide 4: Q4 2023 financial highlights
Q4 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 in the world Profitability Financial Strength Growth Underlying net income1 Und
Slide 5: Strong full year 2023 results
Strong full year 2023 results Profitability Growth Key Business Highlights Underlying net income1 Assets under management1 AM • MFS increased its market position in the U.S. retail $3,728 M +11% 1.40 T +6% mutual funds industry, ending the year 9th in assets (up from 10th)3 Reported net income Wealt
Slide 6: Progress on our Client Impact strategy
Progress on our Client Impact strategy Our Purpose: Help Clients achieve lifetime Providing access to care and helping Clients live healthier lives financial security and live healthier lives Finalized contract with the Government of Canada to be the administrator of the Canadian Dental Care Plan
Slide 7: 2024 strategic priorities
2024 strategic priorities DIGITAL HEALTH ASSET MANAGEMENT ASIA Advance how we think Deepen our impact in Leverage the strength of Accelerate our and act more like a digital health by supporting our asset management momentum in Asia company Clients along their health platform journey CULTURE Preserve
Slide 8: Manjit Singh, Executive Vice President & Chief Financial Officer
Manjit Singh Executive Vice President & Chief Financial Officer Sun Life – Q4 2023 8
Slide 9: Q4 2023 results
Q4 2023 results Profitability ($ millions) Q4’23 Q4’22 Change Results Highlights Wealth & asset management 439 412 +7% Earnings reflect strong business fundamentals and diversified business mix Group - Health & Protection 365 321 +14% • Wealth & asset management: includes higher Asset Management fee
Slide 10: Q4 2023 results
Q4 2023 results Underlying net income1 ($ millions) Reported net income ($ millions) Impact of currency translation increased underlying net income by $2M2 Impact of currency translation increased reported net income by $3M2 AM CAN U.S. ASIA CORP AM CAN U.S. ASIA CORP 350 453 331 324 265 253 348 230
Slide 11: MFS: A global leader in public asset management
MFS: A global leader in public asset management Business Group Results (US$) Quarterly Highlights (US$) Profitability Q4’23 Q4’22 Change • Underlying net income down 5% y/y driven by higher expenses, partially offset Underlying net income1 ($ millions) 191 202 (5)% by higher ANA and increased net in
Slide 12: SLC Management: Growing a premier alternatives platform
SLC Management: Growing a premier alternatives platform Business Group Results Quarterly Highlights Profitability Q4’23 Q4’22 Change • Underlying net income up 46% y/y reflecting fee-related earnings (FRE) Fee-related earnings1 ($ millions) 92 73 +26% growth and higher seed investment income Pre-tax
Slide 13: Canada: A leader in health, wealth, and insurance
Canada: A leader in health, wealth, and insurance Business Group Results Quarterly Highlights Profitability Q4’23 Q4’22 Change • Underlying net income up 32% y/y reflecting strong growth across all Wealth & asset management ($ millions) 92 72 +28% businesses Group - Health & Protection ($ millions)
Slide 14: U.S.: A leader in health & benefits
U.S.: A leader in health & benefits Business Group Results (US$) Quarterly Highlights (US$) Profitability Q4’23 Q4’22 Change • Underlying net income up 8% y/y as business growth and higher investment Group - Health & Protection ($ millions) 153 160 (4)% earnings were partially offset by less favoura
Slide 15: 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 Q4’23 Q4’22 Change CC1 • Underlying net income up 5% y/y Wealth & asset management ($ millions) 16 16 - - Individual - Protection ($ millions) 138 118 +17% +16%
Slide 16: Appendix
Appendix Sun Life – Q4 2023 16
Slide 17: Drivers of earnings
Drivers of earnings1 Underlying drivers of earnings (DOE) Non-underlying net income adjustments Q4’23 Q3’23 Q4’22 Q4’23 Q3’23 Q4’22 $ millions, pre-tax $ millions, post-tax Risk adjustment release 106 114 105 Common shareholders’ underlying net income (loss) 983 930 892 Contractual service margin re
Slide 18: DOE experience gains/(losses) – details
DOE experience gains/(losses)1 – details2 Pre-tax Post-tax $ millions Q4’23 Q3’23 Q4’22 Q4’23 Q3’23 Q4’22 Net equity market impact2 18 (24) 30 8 (21) 22 Net interest rate impact2 (272) 228 250 (53) 127 279 Impact of changes in the fair value of investment properties2 (182) (97) (101) (148) (83) (77)
Slide 19: Contractual service margin movement analysis
Contractual service margin movement analysis1 $ millions, pre-tax Q4’23 Q3’23 Q4’22 CSM Highlights CSM at beginning of period 11,452 11,258 10,350 • Total CSM ended Q4'23 at $11.8 billion, up 8% y/y largely driven by organic CSM Impact of new insurance business2 381 370 253 growth reflecting strong
Slide 20: Earnings on surplus – Supplemental details
Earnings on surplus – Supplemental details Earnings on surplus – EOS Highlights supplemental details $ millions, pre-tax Q4’23 Q3’23 Q4’22 • Core investment income down q/q due to lower surplus cash balance reflecting a debt redemption Core investment income 160 169 154 Realized investment gains / (
Slide 21: 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 22: 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 23: 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