Sun Life Financial Inc. · TSX:SLF
Sun Life Financial — BMO Fixed Income Insurance Conference 2017
24 slides from Sun Life Financial's conference presentation, Jun 15, 2017
Slide 1: BMO Fixed Income Insurance Conference
BM O F IXED IN C O M E IN SU R AN C E C O N F ER EN CE June 15, 2017 Marlene Van den Hoogen Treasurer and Head of Capital Planning
Slide 2: 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 3: Key Messages
KEY MESSAGES 1 Over past five years, we have built a strong defense and offense Four at-scale, competitive pillars with excellent growth prospects Culture change 2 Organic investments hitting their stride Track record of disciplined capital allocation For the next leg, our objective is to beco
Slide 4: Business Overview
fi BUSINESS OVERVIEW Life Financial SUN LIFE FINANCIAL INC. Life’ brighter under the sun
Slide 5: Sun Life Financial in 2017
SUN LIFE FINANCIAL IN 2017 A $30 billion1 leading, international financial services provider… operating through a balanced and diversified model… focused on creating shareholder value now and in the future 5 1 Market capitalization (C$), as of March 31, 2017
Slide 6: Past Five Years Have Been Successful...
PAST FIVE YEARS HAVE BEEN SUCCESSFUL... VALUE OF NEW TOTAL ASSETS LIFE AND HEALTH SALES1 WEALTH SALES1 BUSINESS2 UNDER MANAGEMENT (C$ millions) (C$ billions) (EXCLUDES SLF & ADMINISTRATION2 ASSET (C$ billions) MANAGEMENT) 15% CAGR 2,758 (C$ millions) 9% 16% CAGR 19% CAGR 949 961 2,172 138 CAGR 2,068
Slide 7: ...And We've Built Momentum
...AND WE’VE BUILT MOMENTUM TOTAL SHAREHOLDER RETURN NET INCOME1 FIVE YEARS AS OF (C$ millions) DECEMBER 31, 2016 (annualized return) CAGR 2,487 16%* 2,335 2,253 2,305 Sun Life 1,943 1,920 1,816 Canadian Lifecos 1,581 1,479 1,271 U.S. Lifecos Canadian Banks S & P 500 TSX 2012 2013 2014 2015 2016 Ope
Slide 8: We've Built a Strong Defense...
WE’VE BUILT A STRONG DEFENSE… BUSINESS DIVERSIFICATION GEOGRAPHIC DIVERSIFICATION 2016 UNDERLYING NET INCOME 2016 UNDERLYING NET INCOME RUN-OFF 13% SLF UK ASSET 7% MANAGEMENT 28% 20% of SLF US SLF GROUP 18% CANADA underlying 35% INSURANCE net income 18% comes from Asia1 SLF ASIA WEALTH 12% 10% INDIV
Slide 9: ...And We've Built a Strong Offense
…AND WE’VE BUILT A STRONG OFFENSE Digital Health Business Large investment in Defined Benefit Solutions Vietnam and Indonesia organic growth that will Sun Life Global Investments Sun Life Investment Management contribute to earnings Retail Wealth in SLF Canada SLF U.S. Voluntary Benefi
Slide 10: Strong Market Positions for All Four Pillars
STRONG MARKET POSITIONS FOR ALL FOUR PILLARS Canada U.S. Group Benefits #1 in Group Benefits #6 in Group Benefits #1 in Group Retirement Services #1 in stand alone Stop-loss #2 in Retail Life Insurance #10 in Voluntary Benefits #1 Career Advisor Network #2 Private Dental Network Asset Management Asi
Slide 11: Setting a Bold New Objective
SETTING A BOLD NEW OBJECTIVE Our ambition is to be ONE OF THE BEST insurance and asset management companies globally Each pillar viewed Disproportionate as one of the best Top Quartile Share of Top Top Quartile TSR in its markets Client Experience Talent 11
Slide 12: Ambition to Be One of the Best Insurance and Asset Management Companies
AMBITION TO BE “ONE OF THE BEST” INSURANCE AND ASSET MANAGEMENT COMPANIES IN THE WORLD A growth strategy focused on high ROE and strong capital generation through leading positions in attractive markets globally A Leader in Insurance Digital Data & A Leader in U.S. Group and Wealth Solutions Analyti
Slide 13: Relevant and Useful Technology – My Sun Life
Relevant and Useful Technology – My Sun Life 13
Slide 14: Capital Management
fi CAPITAL MANAGEMENT Life Financial SUN LIFE FINANCIAL INC. Life’ brighter under the sun
Slide 15: Managing Expectations of Stakeholders
MANAGING EXPECTATIONS OF STAKEHOLDERS Stakeholder Metric Target Policyholders Capital Adequacy SLA MCCSR ratio > internal targets Local Capital ratios > internal targets Lower than expectations for current rating: Rating Agencies Leverage Ratio Maintain less than 30% Higher than expectations for cur
Slide 16: Strong Capital Adequacy and Flexible Balance Sheet
STRONG CAPITAL ADEQUACY AND FLEXIBLE BALANCE SHEET M C C S R R A T I O S (1) HOLDING COMPANY L E V E R A G E R A T I O (1) C A S H (1) (C$ millions) 1,827 250% 250% 249% 243% 240% 1,100 229% 990 226% 816 217% 23.6% 23.0% 22.6% 22.1% 2014 2015 2016 Q1'17 2014 2015 2016 Q1'17 2014 2015 2016 Q1'17 Mini
Slide 17: Strong Capital Generation with Balanced Approach to Deployment
STRONG CAPITAL GENERATION WITH BALANCED APPROACH TO DEPLOYMENT EXPECTED ANNUAL CAPITAL FINANCIAL STRENGTH CAPITAL GENERATION DEPLOYMENT R A T I N G S (2) (2014 -2016) (C$ billions) Sun Life Assurance Company 2.7 Q1’17 2.5 of Canada SLF US AA-(3) SLF 2.0 Standard & Poor’s Canada Moody’s Aa3 A.M. Best
Slide 18: Capital Model
CAPITAL MODEL $1.1 billion cash at MCCSR 249% Holding Company SLF Leverage 22.6% Leverage Capacity $0.60B – Senior Debt to 25/30%: ~$0.9/$2.8B $2.89B – Subordinated Debt $2.26B – Preferred Shares MCCSR of 229% SLA Sun Life Asset Management $0.15B – Subordinated Debt $0.70B – SLEECS Sun Life MFS Inve
Slide 19: Preparing for a Change to Regulatory Capital - LICAT
PREPARING FOR A CHANGE TO REGULATORY CAPITAL - LICAT During 2017 December 2017 January 2017 February 2017 May 2018 Assess and OSFI Filing Test Test Run1 Filed Sensitivities Filed Begin reporting Establish New Run 2 YE 2015 YE 2015 under LICAT Internal targets YE 2016 Key Facts Key Considerations E
Slide 20: Positioned to Deliver on Targets Under LICAT
POSITIONED TO DELIVER ON TARGETS UNDER LICAT Capital and cash generation directly Local capital impacted by LICAT requirements and capital targets Dividends unaffected by LICAT Excluded from regulatory capital requirements Dividends unaffected by UK LICAT 20
Slide 21: Appendix
APPENDIX Life Financial SUN LIFE FINANCIAL INC. Life's brighter under the sun
Slide 22: Use of Non-IFRS Financial Measures
In this presentation, Sun Life Financial Inc. and its subsidiaries, joint ventures and associates are referred to as “we”, “us”, “our” and the “Company”. Use of Non-IFRS Financial Measures We report certain financial information using non-IFRS financial measures, as we believe that these measures pr
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: Material Assumptions and Risk Factors
Material Assumptions and Risk Factors The Company’s medium-term financial objectives are forward looking non-IFRS financial measures and do not constitute guidance. Our ability to achieve those objectives is dependent on the Company’s success in achieving the growth initiatives, business objectives
Sun Life Financial — BMO Fixed Income Insurance Conference 2017 on 6ix