[Executive Summary](index=1&type=section&id=Executive%20Summary) [Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) Sun Life reported a strong fourth quarter and full year 2023, with underlying net income of $983 million for Q4 (up 10% YoY) and $3,728 million for the full year (up 11% YoY), driven by robust sales and momentum in group health and protection, despite a 36% decrease in Q4 reported net income to $749 million due to unfavorable market-related impacts, while maintaining a strong capital position with a LICAT ratio of 149% Q4 & Full Year 2023 Key Financial Metrics | Profitability Metric | Q4 2023 | Q4 2022 | Change | Full Year 2023 | Full Year 2022 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Underlying Net Income | $983M | $892M | +10% | $3,728M | $3,369M | +11% | | Reported Net Income | $749M | $1,165M | -36% | $3,086M | $2,871M | +7% | | Underlying EPS | $1.68 | $1.52 | +10.5% | $6.36 | $5.75 | +10.6% | | Reported EPS | $1.28 | $1.98 | -35.4% | $5.26 | $4.89 | +7.6% | | Underlying ROE | 18.4% | 17.7% | +0.7pp | 17.8% | 17.0% | +0.8pp | | Reported ROE | 14.0% | 23.2% | -9.2pp | 14.7% | 14.5% | +0.2pp | Q4 2023 Underlying Net Income by Business Type (vs Q4 2022) | Business Type | Q4 2023 Underlying NI | Change (YoY) | | :--- | :--- | :--- | | Wealth & asset management | $439M | +7% | | Group - Health & Protection | $365M | +14% | | Individual - Protection | $284M | +23% | - Strategic initiatives in Q4 included the acquisition of Dialogue Health Technologies and an investment in Pillway, a virtual pharmacy, to enhance digital health services in Canada[4](index=4&type=chunk) - The company ended Q4 2023 with a strong Life Insurance Capital Adequacy Test (LICAT) ratio of **149%** for SLF Inc. and total Assets Under Management (AUM) of **$1.4 trillion**[7](index=7&type=chunk) [Business Group Highlights](index=5&type=section&id=Business%20Group%20Highlights) In Q4 2023, Asset Management saw underlying net income grow 2%, with SLC Management's strength offsetting MFS's decline, while Canada was a standout performer with 32% growth in underlying net income, driven by strong sales and improved disability experience, the U.S. segment grew underlying net income by 8% (in USD), and Asia's underlying net income increased by 6%, fueled by a 49% surge in individual sales, particularly in Hong Kong, whereas the Corporate segment reported a larger net loss due to the sale of Sun Life UK and higher expenses - **Asset Management:** Underlying net income rose **2%** to **$331M**, with MFS experiencing net outflows of **$15.3B**, while SLC Management had net inflows of **$3.9B** and its fee-earning AUM grew **8% YoY**[10](index=10&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk) - **Canada:** Underlying net income surged **32%** to **$350M**, and the company completed the acquisition of Dialogue Health Technologies and was selected to administer the Canadian Dental Care Plan[13](index=13&type=chunk)[15](index=15&type=chunk) - **U.S.:** Underlying net income increased **8%** to **US$187M**, with DentaQuest awarded new Medicaid contracts in Iowa and Arkansas, and the segment recording over **US$650M** in sales since the acquisition[16](index=16&type=chunk)[18](index=18&type=chunk) - **Asia:** Underlying net income grew **6%** to **$143M**, with individual sales jumping **49%**, driven by Hong Kong, leading to a significant increase in new business Contractual Service Margin (CSM) to **$223M** from **$122M** in Q4'22[20](index=20&type=chunk)[23](index=23&type=chunk) - **Corporate:** Underlying net loss increased to **$94M** from **$62M** in the prior year, primarily driven by the sale of Sun Life UK and higher operating expenses[24](index=24&type=chunk) [Detailed Financial Report](index=8&type=section&id=Detailed%20Financial%20Report) [A. How We Report Our Results](index=10&type=section&id=A.%20How%20We%20Report%20Our%20Results) Sun Life reports its financial results across five business segments: Asset Management, Canada, U.S., Asia, and Corporate, having adopted IFRS 17 (Insurance Contracts) and IFRS 9 (Financial Instruments) on January 1, 2023, which impacts the comparability of 2023 results with restated 2022 figures due to updated asset-liability management strategies in Q1 2023 - The company manages its operations and reports financial results in five business segments: Asset Management, Canada, U.S., Asia, and Corporate[31](index=31&type=chunk) - On January 1, 2023, the company adopted IFRS 17 and IFRS 9, where restated 2022 results may not be fully representative of the future earnings profile as asset and liability portfolios were not managed under these new standards during that period[32](index=32&type=chunk)[34](index=34&type=chunk) [B. Financial Summary](index=11&type=section&id=B.%20Financial%20Summary) This section provides a detailed financial summary table comparing key profitability, growth, and financial strength metrics for Q4'23 against Q3'23 and Q4'22, including underlying and reported net income, EPS, ROE, sales figures, AUM, and capital ratios Quarterly Financial Summary | Metric | Q4'23 | Q3'23 | Q4'22 (restated) | | :--- | :--- | :--- | :--- | | **Profitability** | | | | | Underlying Net Income | $983M | $930M | $892M | | Reported Net Income | $749M | $871M | $1,165M | | Underlying EPS | $1.68 | $1.59 | $1.52 | | Underlying ROE | 18.4% | 17.7% | 17.7% | | **Growth** | | | | | Total AUM | $1,399.6B | $1,340.1B | $1,318.6B | | New Business CSM | $381M | $370M | $253M | | **Financial Strength** | | | | | SLF Inc. LICAT Ratio | 149% | 147% | 142% (as at Jan 1, '23) | | Financial Leverage Ratio | 21.5% | 21.8% | 23.7% (as at Jan 1, '23) | [C. Profitability](index=12&type=section&id=C.%20Profitability) Q4 2023 underlying net income increased 10% year-over-year to $983 million, driven by growth in all protection and wealth management businesses, while reported net income fell 36% to $749 million, primarily due to unfavorable market-related impacts of $193 million from real estate experience and interest rates, with mixed experience items including favorable morbidity in Canada and the U.S. offset by unfavorable expense and credit experience Reconciliation of Underlying to Reported Net Income (Q4'23 vs Q4'22) | ($ millions) | Q4'23 | Q4'22 | | :--- | :--- | :--- | | **Underlying net income** | **983** | **892** | | Market-related impacts | (193) | 224 | | Assumption changes (ACMA) | (1) | 12 | | Other adjustments | (40) | 37 | | **Reported net income** | **749** | **1,165** | - The **10%** increase in underlying net income was driven by higher earnings in Wealth & asset management (**+$27M**), Group - Health & Protection (**+$44M**), and Individual - Protection (**+$53M**)[43](index=43&type=chunk)[46](index=46&type=chunk) - The **36%** decrease in reported net income was primarily caused by unfavorable market-related impacts, especially from real estate and interest rates, and the prior year's positive impact from a Canadian tax rate change[43](index=43&type=chunk)[45](index=45&type=chunk) - The reported effective tax rate for Q4'23 was a recovery of **(11.1)%**, influenced by declining interest rates and a **$51 million** tax recovery related to the new Bermuda Corporate Income Tax regime[49](index=49&type=chunk)[50](index=50&type=chunk) [D. Growth](index=16&type=section&id=D.%20Growth) The company demonstrated strong growth in Q4 2023, with total individual protection sales increasing 42% year-over-year, led by Asia, group health & protection sales growing 8%, and wealth sales & asset management gross flows rising 6%, while total Assets Under Management (AUM) increased by 6% from year-end 2022 to $1.40 trillion, driven by favorable market movements Q4 2023 Sales and Gross Flows (vs Q4 2022) | Sales Category | Q4 2023 | YoY Change | | :--- | :--- | :--- | | Wealth sales & asset management gross flows | $45.8B | +6% | | Group - Health & Protection sales | $1.5B | +8% | | Individual - Protection sales | $707M | +42% | | New business CSM | $381M | +51% | - The **42%** surge in individual protection sales was primarily driven by higher sales in Hong Kong and International markets[53](index=53&type=chunk) - Total AUM increased by **$81.0 billion (6%)** from December 31, 2022, to **$1.40 trillion**, mainly due to **$126.9 billion** in favorable market movements, partially offset by net outflows and foreign exchange impacts[56](index=56&type=chunk) [E. Contractual Service Margin](index=18&type=section&id=E.%20Contractual%20Service%20Margin) The Contractual Service Margin (CSM), representing future insurance profits, grew by 8% during 2023 to end the year at $11.8 billion, driven by strong organic growth from new insurance business, particularly in Asia and Canada, which contributed $1.25 billion, partially offset by the CSM recognized for services provided and a reduction from the sale of Sun Life UK Full Year 2023 CSM Movement | ($ millions) | 2023 | 2022 | | :--- | :--- | :--- | | Beginning of Period | 10,865 | 9,797 | | Impact of new insurance business | 1,253 | 762 | | CSM recognized for services provided | (919) | (861) | | Impact of change in assumptions | 364 | 431 | | Disposition (Sale of Sun Life UK) | (262) | — | | **End of Period** | **11,786** | **10,865** | - The total CSM balance increased by **$0.9 billion (8%)** from December 31, 2022[61](index=61&type=chunk) - Organic CSM movement was strong, driven by new business from individual protection sales in Asia and Canada, and assumption changes also had a net positive impact of **$364 million** for the year[61](index=61&type=chunk) [F. Financial Strength](index=20&type=section&id=F.%20Financial%20Strength) Sun Life maintained a robust financial position, ending Q4 2023 with a LICAT ratio for SLF Inc. of 149%, an increase of seven percentage points from the start of the year, with total capital growing by $1.7 billion to $42.4 billion, and key capital activities including issuing $500 million in subordinated debentures, redeeming $1 billion of existing debentures, and repurchasing $186 million of common shares under its NCIB Key Financial Strength Ratios | Ratio | Q4 2023 | Jan 1, 2023 | | :--- | :--- | :--- | | SLF Inc. LICAT Ratio | 149% | 142% | | Sun Life Assurance LICAT Ratio | 141% | 139% | | Financial Leverage Ratio | 21.5% | 23.7% | - The SLF Inc. LICAT ratio of **149%** is well above OSFI's supervisory ratio of **100%**, with the increase during 2023 driven by reported net income and capital optimization, partly offset by dividends, debt redemption, and M&A[69](index=69&type=chunk)[70](index=70&type=chunk) - The company holds **$1.6 billion** in cash and other liquid assets at the parent company level (SLF Inc.), up from **$1.1 billion** at year-end 2022[72](index=72&type=chunk) - In 2023, SLF Inc. purchased and cancelled approximately **2.8 million** common shares for a total cost of **$186 million** under its Normal Course Issuer Bid (NCIB)[76](index=76&type=chunk) [G. Performance by Business Segment](index=22&type=section&id=G.%20Performance%20by%20Business%20Segment) This section provides a detailed breakdown of financial performance for each of Sun Life's five business segments, where for Q4 2023, Canada was the strongest contributor to underlying net income at $350 million, followed by Asset Management at $331 million, the U.S. at $253 million, and Asia at $143 million, while the Corporate segment recorded an underlying net loss of $94 million Q4 2023 Underlying Net Income by Business Segment | ($ millions) | Q4'23 | Q3'23 | Q4'22 | | :--- | :--- | :--- | :--- | | Asset Management | 331 | 330 | 324 | | Canada | 350 | 338 | 265 | | U.S. | 253 | 185 | 230 | | Asia | 143 | 166 | 135 | | Corporate | (94) | (89) | (62) | | **Total** | **983** | **930** | **892** | [1. Asset Management](index=23&type=section&id=1.%20Asset%20Management) Asset Management's underlying net income grew 2% YoY to $331 million in Q4, driven by a 26% increase in fee-related earnings at SLC Management, which offset a decline at MFS, as MFS experienced net outflows of US$11.2 billion, while SLC Management continued its growth with net inflows of $3.9 billion and a significant increase in fee-earning AUM - SLC Management's underlying net income increased by **$22 million**, driven by higher fee-related earnings and seed investment income, while MFS's underlying net income decreased by **$15 million** due to higher expenses[82](index=82&type=chunk)[86](index=86&type=chunk) Q4 2023 Asset Management Flows | (C$ billions) | MFS | SLC Management | Total | | :--- | :--- | :--- | :--- | | Gross Flows | 30.4 | 8.0 | 38.3 | | Net Flows | (15.3) | 3.9 | (11.4) | - MFS's AUM increased **9%** from year-end 2022 to **US$598.6 billion**, driven by market appreciation which offset net outflows[80](index=80&type=chunk)[83](index=83&type=chunk) [2. Canada](index=25&type=section&id=2.%20Canada) The Canada segment delivered a strong quarter with underlying net income increasing 32% YoY to $350 million, with broad-based growth and notable strength in Group Health & Protection due to premium growth and improved disability experience, alongside robust sales across all lines: wealth gross flows up 32%, group sales up 63%, and individual protection sales up 23% - The **32%** increase in underlying net income was driven by a **$57 million** increase in Group - Health & Protection, a **$20 million** increase in Wealth & asset management, and an **$8 million** increase in Individual - Protection[88](index=88&type=chunk)[89](index=89&type=chunk) Q4 2023 Canada Sales Growth (YoY) | Business Line | YoY Growth | | :--- | :--- | | Wealth sales & asset management gross flows | +32% | | Group - Health & Protection sales | +63% | | Individual - Protection sales | +23% | [3. U.S.](index=26&type=section&id=3.%20U.S.) The U.S. segment's underlying net income rose 8% YoY to US$187 million, primarily due to a US$21 million increase in Individual Protection, which benefited from the inclusion of the UK payout annuity business and improved mortality, while Group Health & Protection income declined slightly, and group sales saw a modest 4% increase - Individual - Protection underlying income grew by **US$21 million**, driven by the inclusion of the UK payout annuity business and better mortality experience[91](index=91&type=chunk)[93](index=93&type=chunk) - Group - Health & Protection underlying income decreased by **US$7 million**, as lower Dental results offset higher Group Benefits results[91](index=91&type=chunk)[93](index=93&type=chunk) - U.S. group sales increased **4%** YoY to **US$932 million**, driven by higher medical stop-loss and commercial dental sales[92](index=92&type=chunk) [4. Asia](index=27&type=section&id=4.%20Asia) Asia's underlying net income increased by 6% YoY to $143 million, supported by business growth, with the segment's growth story dominated by a 49% surge in individual sales, driven by strong demand in Hong Kong after pandemic restrictions were lifted, leading to a significant increase in new business CSM, which rose to $223 million from $122 million in Q4'22 - Individual - Protection underlying income grew by **$20 million**, reflecting strong sales momentum[95](index=95&type=chunk) Q4 2023 Asia Sales Growth (YoY) | Business Line | YoY Growth | | :--- | :--- | | Individual - Protection sales | +49% | | Wealth sales & asset management gross flows | +12% | - New business CSM increased to **$223 million** in Q4'23, up from **$122 million** in the prior year, primarily driven by sales in Hong Kong and High-Net-Worth[95](index=95&type=chunk) [5. Corporate](index=28&type=section&id=5.%20Corporate) The Corporate segment reported an underlying net loss of $94 million, an increase from the $62 million loss in Q4'22, with the larger loss primarily a result of the sale of Sun Life UK and higher operating expenses, partially mitigated by a lower effective tax rate, resulting in a reported net loss of $41 million, a significant swing from a reported net income of $97 million in the prior-year quarter - The underlying net loss increased from **$62 million** in Q4'22 to **$94 million** in Q4'23[97](index=97&type=chunk) - Key drivers for the increased underlying loss were the sale of Sun Life UK and higher operating expenses[97](index=97&type=chunk)[98](index=98&type=chunk) [H. Non-IFRS Financial Measures](index=30&type=section&id=H.%20Non-IFRS%20Financial%20Measures) This section defines and provides detailed reconciliations for non-IFRS financial measures used by Sun Life to help investors understand underlying business performance, with the primary measure, 'Underlying Net Income', adjusting IFRS reported net income for market-related impacts, assumption changes, and other specific items like acquisition costs, and reconciliations provided for the company as a whole and by business segment - Underlying net income is a non-IFRS measure that removes the following from reported net income: market-related impacts, assumption changes and management actions (ACMA), and other adjustments (e.g., acquisition costs, intangible asset amortization)[105](index=105&type=chunk)[106](index=106&type=chunk) Full Year 2023 Reconciliation of Underlying to Reported Net Income | ($ millions) | 2023 | 2022 | | :--- | :--- | :--- | | **Underlying net income** | **3,728** | **3,369** | | Market-related impacts | (454) | (21) | | Assumption changes (ACMA) | 36 | (168) | | Other adjustments | (224) | (309) | | **Reported net income** | **3,086** | **2,871** | - Assets Under Management (AUM) is another key non-IFRS measure, and as of December 31, 2023, total AUM was **$1.40 trillion**, reconciled from general funds, segregated funds, and third-party AUM[113](index=113&type=chunk)[114](index=114&type=chunk) [I. Forward-looking Statements](index=36&type=section&id=I.%20Forward-looking%20Statements) This section contains the standard 'safe harbor' disclosure, cautioning that statements in the report relating to future strategies, growth, and objectives are forward-looking, clarifying that these statements are not guarantees of future performance and are subject to various risks and uncertainties, and listing key risk factors that could cause actual results to differ materially, including market, insurance, credit, business, operational, and liquidity risks - The report contains forward-looking statements regarding strategies, growth initiatives, and other business objectives[124](index=124&type=chunk) - These statements are subject to significant risks and uncertainties, with key risk factors including, but not limited to: market risks (equity, interest rates), insurance risks (mortality, morbidity), credit risks, business and strategic risks, operational risks (cyber-attacks), and liquidity risks[126](index=126&type=chunk)

assets under management1,2,3 | --- | --- | --- | --- | --- | |-------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------- ...

Financial Data and Key Metrics Changes - Underlying net income for Q3 2023 was $930 million, maintaining steady growth year-to-date, with underlying earnings per share at $1.59 [22][9] - Reported net income for the quarter was $871 million, up from $111 million in the prior year, reflecting favorable market-related impacts [26] - The LICAT ratio was 147%, down one point from the prior quarter due to capital deployment [29] Business Line Data and Key Metrics Changes - Wealth and Asset Management underlying earnings comprised 44% of total Q3 underlying earnings, up 9% from the prior year, driven by higher investment income [23] - Group Health and Protection businesses accounted for 27% of Q3 underlying earnings, growing 1% year-over-year, while Individual Protection earnings declined 3% due to the sale of the U.K. business [24] - New business CSM was $370 million, more than doubling from the prior year, with total CSM growing 11% year-over-year [25] Market Data and Key Metrics Changes - Total assets under management increased to $1.34 trillion, up 6% over last year [10] - MFS underlying net income was USD 207 million, down 2% from the prior year, with retail net outflows of USD 3.7 billion [30] - SLC Management generated fee-related earnings of $68 million, up 17% year-over-year, reflecting good capital raising and deployment [32] Company Strategy and Development Direction - The company is focused on expanding health-oriented businesses and improving access to care through digital channels, including the acquisition of Dialogue, a virtual health provider [6][5] - A new role of Vice Chair of Strategic Partnerships has been created to leverage global partnership opportunities [17] - The company aims to enhance client impact through technology, including generative AI projects [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the diversified business mix and the ability to navigate a challenging external environment [19] - The company anticipates good revenue growth in 2024, driven by an expected increase in sales pipeline revenues [35] - Management remains optimistic about the DentaQuest acquisition and its integration, expecting it to meet or exceed acquisition expectations [138] Other Important Information - The company announced a $0.03 increase to its quarterly common share dividend and is active in its share buyback program [4] - The favorable market-related impact was primarily driven by interest rates, with expectations of continued positive impacts as the yield curve normalizes [27] Q&A Session Summary Question: Regarding the LICAT being better than anticipated - Management confirmed that the LICAT was down one point quarter-over-quarter, with organic capital generation of approximately $600 million in the quarter [41][40] Question: Why is there a change in management in Asia? - Management indicated that partnerships are increasingly important, and the new role is aimed at maintaining growth momentum in Asia [43][42] Question: Impact of Medicaid redeterminations on dental experience - Management noted that the redetermination process is occurring faster than expected, leading to higher expenses and a temporary impact on loss ratios [72][71] Question: Outlook for profitability in the dental business - Management expects the dental business to rebound as new business premiums come on the books in 2024, despite current challenges [75][74] Question: Insights on partnerships and sales growth in Asia - Management highlighted strong sales momentum in Hong Kong, driven by various distribution channels and a new bancassurance relationship [84][83]

[Q3 2023 Earnings Release Highlights](index=3&type=section&id=Sun%20Life%20Reports%20Third%20Quarter%202023%20Results) [Financial and Operational Highlights](index=3&type=section&id=Financial%20and%20Operational%20Highlights) Underlying net income decreased 2% to $930 million, while reported net income surged to $871 million, supported by strategic acquisitions and dividend growth Q3 2023 Key Financial Metrics | Profitability | Q3'23 ($ millions) | Q3'22 ($ millions) | | :--- | :--- | :--- | | Underlying net income | 930 | 949 | | Reported net income | 871 | 111 | | Underlying EPS ($) | 1.59 | 1.62 | | Reported EPS ($) | 1.48 | 0.19 | | Underlying ROE (%) | 17.7% | 19.4% | | Reported ROE (%) | 16.6% | 2.3% | - The common share dividend was increased from **$0.75 to $0.78 per share**[8](index=8&type=chunk) - Strategic initiatives in Q3 2023 include: - Completed the **acquisition of Dialogue**, Canada's leading virtual health and wellness provider - **Increased investment in Bowtie**, Hong Kong's first virtual insurer - **Extended partnership with Teledentistry.com to DentaQuest**, providing access to approximately 3.5 million people - SLC Management formed a strategic relationship with Scotiabank Global Wealth Management for private asset solutions[6](index=6&type=chunk) - Underlying net income **decreased by 2% YoY**, driven by a **95% increase in net loss** from Corporate expenses & other, which includes higher debt financing costs, partially offset by a **9% increase in Wealth & asset management underlying net income**[8](index=8&type=chunk)[10](index=10&type=chunk) - Reported net income **increased significantly by $760 million YoY**, primarily due to favorable market-related impacts and a **$170 million charge** in the prior year related to the sale of Sun Life UK[10](index=10&type=chunk) [Performance by Business Group](index=5&type=section&id=Performance%20by%20Business%20Group) Asset Management, Canada, and Asia showed strong underlying net income growth, while U.S. declined and Corporate net loss widened Underlying Net Income by Business Segment (Q3'23 vs Q3'22) | | Q3'23 ($ millions) | Q3'22 ($ millions) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Asset Management | 330 | 298 | +11 | | Canada | 338 | 293 | +15 | | U.S. | 185 | 227 | -19 | | Asia | 166 | 153 | +8 | | Corporate | (89) | (22) | -305 | [Asset Management](index=5&type=section&id=Asset%20Management) - Asset Management's underlying net income **increased 11% YoY to $330 million**, driven by higher fee-related earnings at SLC Management and higher average net assets at MFS[11](index=11&type=chunk)[16](index=16&type=chunk) Asset Management AUM and Flows (Q3'23) | Metric | MFS (C$ billions) | SLC Management (C$ billions) | Total (C$ billions) | | :--- | :--- | :--- | :--- | | AUM | 754.8 | 219.5 | 974.2 | | Net Flows | (12.5) | 3.4 | (9.1) | - Total Asset Management AUM was **$974 billion** at the end of Q3'23, with **net outflows of $9.1 billion** reflecting **MFS net outflows of $12.5 billion** partially offset by **SLC Management net inflows of $3.4 billion**[12](index=12&type=chunk) - SLC Management entered a **strategic partnership with Scotiabank** to distribute alternative investment capabilities to the Canadian retail market, aiming to meet growing demand from High-Net-Worth (HNW) investors[14](index=14&type=chunk) [Canada](index=5&type=section&id=Canada) - Canada's underlying net income **rose 15% YoY to $338 million**, primarily due to a **$34 million increase** in Group - Health & Protection from improved disability experience[15](index=15&type=chunk)[17](index=17&type=chunk) Canada Sales Growth (Q3'23 vs Q3'22) | Sales Category | Gross Flows/Sales ($ millions) | YoY Change (%) | | :--- | :--- | :--- | | Wealth sales & asset management | 3,400 | +7 | | Group - Health & Protection | 119 | +4 | | Individual - Protection | 148 | +24 | - Sun Life was selected to advance to the final stages of contract negotiations with the Government of Canada to administer the **Canadian Dental Care Plan (CDCP)**, which could provide dental care access to up to **nine million additional Canadians**[16](index=16&type=chunk) [U.S.](index=6&type=section&id=U.S.) - U.S. underlying net income **decreased 19% YoY to US$140 million**, driven by lower Dental results impacted by Medicaid redeterminations and less favorable morbidity experience in Group Benefits[20](index=20&type=chunk)[27](index=27&type=chunk) - U.S. group sales were **down 36% YoY to US$179 million**, reflecting lower large case Medicaid sales in Dental[21](index=21&type=chunk) - The partnership with Teledentistry.com was **extended to DentaQuest members**, expected to increase access to oral health care for approximately **3.5 million members** across 20 states by the end of 2023[22](index=22&type=chunk) [Asia](index=6&type=section&id=Asia) - Asia's underlying net income **increased 8% YoY to $166 million**, driven by business growth in Individual Protection reflecting strong sales momentum over the past year[23](index=23&type=chunk)[28](index=28&type=chunk) - Individual sales **grew 60% YoY to $521 million**, largely due to higher sales in Hong Kong after pandemic-related travel restrictions were lifted, while Wealth sales **decreased 34%** due to lower money market fund sales in the Philippines[25](index=25&type=chunk) - New business Contractual Service Margin (CSM) **increased significantly to $238 million from $79 million** in the prior year, driven by sales in Hong Kong and High-Net-Worth[25](index=25&type=chunk) [Corporate](index=7&type=section&id=Corporate) - Corporate underlying net loss was **$89 million** in Q3'23, a significant increase from a **$22 million loss** in the prior year, driven by the sale of Sun Life UK, higher operating expenses, and increased debt financing costs[30](index=30&type=chunk) - Reported net loss was **$105 million**, an improvement from a **$288 million loss** in Q3'22, which had included a **$170 million impairment charge** related to the sale of Sun Life UK[30](index=30&type=chunk)[31](index=31&type=chunk) [Management's Discussion and Analysis (MD&A)](index=9&type=section&id=Management%27s%20Discussion%20and%20Analysis) [Financial Summary](index=12&type=section&id=B.%20Financial%20Summary) Sun Life's Q3 2023 and year-to-date financial results are summarized, covering profitability, growth, and financial strength Q3 2023 vs Q3 2022 Financial Summary | Metric | Q3'23 | Q3'22 | | :--- | :--- | :--- | | Underlying net income (millions) | 930 | 949 | | Reported net income (millions) | 871 | 111 | | Underlying EPS ($) | 1.59 | 1.62 | | Reported EPS ($) | 1.48 | 0.19 | | Underlying ROE (%) | 17.7% | 19.4% | | Total AUM (billions) | 1,340.1 | 1,269.4 | Financial Strength as of Q3'23 | Metric | Q3'23 (%) | Jan 1, 2023 (%) | | :--- | :--- | :--- | | SLF Inc. LICAT ratio | 147 | 142 | | Sun Life Assurance LICAT ratio | 138 | 139 | | Financial leverage ratio | 21.8 | 23.7 | [Profitability](index=13&type=section&id=C.%20Profitability) Underlying net income decreased 2% to $930 million, while reported net income surged to $871 million, with year-to-date underlying net income up 11% Reconciliation of Underlying to Reported Net Income (Q3'23 vs Q3'22) | (after-tax) | Q3'23 ($ millions) | Q3'22 ($ millions) | | :--- | :--- | :--- | | **Underlying net income** | **930** | **949** | | Market-related impacts | 23 | (361) | | Assumption changes and management actions | 35 | (131) | | Other adjustments | (117) | (346) | | **Reported net income** | **871** | **111** | - Drivers of the 2% YoY decrease in Q3 underlying net income: - **Wealth & asset management:** **Up $38M** from higher investment income and fee earnings - **Group - Health & Protection:** **Up $4M**, with strong US revenue growth offset by US health experience - **Individual - Protection:** **Down $8M** due to the sale of Sun Life UK - **Corporate expenses & other:** **$53M increase in net loss**, including higher debt financing costs[49](index=49&type=chunk) - Year-to-date underlying net income **increased 11% YoY**, primarily driven by a **$306 million increase** in Group - Health & Protection, reflecting strong premium growth and the DentaQuest contribution[56](index=56&type=chunk) [Growth](index=16&type=section&id=D.%20Growth) Individual protection sales surged 51% in Q3 2023, while wealth and group health sales declined, and total AUM increased 2% to $1.34 trillion Sales and Gross Flows (Q3'23 vs Q3'22) | | Q3'23 ($ millions) | Q3'22 ($ millions) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Wealth sales & asset management gross flows | 39,324 | 42,146 | -7 | | Group - Health & Protection sales | 374 | 499 | -25 | | Individual - Protection sales | 669 | 444 | +51 | | New business CSM | 370 | 177 | +109 | - Total AUM **increased by $21.6 billion (2%)** from December 31, 2022, to **$1.34 trillion**, primarily driven by favorable market movements of **$40.6 billion**, partially offset by **net outflows of $15.5 billion**[68](index=68&type=chunk) - Q3 2023 saw total **net outflows of $10.5 billion** from segregated funds and third-party AUM, mainly from **MFS net outflows of $12.5 billion**, which were partially offset by **SLC Management net inflows of $3.4 billion**[69](index=69&type=chunk) [Contractual Service Margin (CSM)](index=18&type=section&id=E.%20Contractual%20Service%20Margin) Total CSM increased 5% to $11.5 billion in the first nine months of 2023, driven by strong new business sales and favorable assumption changes - Total CSM ended Q3'23 at **$11.5 billion**, an **increase of $0.6 billion or 5%** for the first nine months of 2023[72](index=72&type=chunk) - Key drivers of CSM movement in the first nine months of 2023: - **Organic CSM movement:** **+$711 million**, driven by new business from strong individual protection sales in Asia and Canada - **Impact of change in assumptions:** **+$287 million**, including favorable mortality and model refinements - **Disposition:** **-$262 million reduction** from the sale of Sun Life UK[72](index=72&type=chunk)[73](index=73&type=chunk) - In Q3'23, assumption changes and management actions (ACMA) **increased reported net income by $35 million** but **decreased the pre-tax CSM by $43 million**, with notable changes including unfavorable policyholder behavior updates in Asia and Canada, offset by favorable modeling enhancements[75](index=75&type=chunk)[76](index=76&type=chunk) [Financial Strength](index=20&type=section&id=F.%20Financial%20Strength) Sun Life maintained strong financial strength in Q3 2023, with SLF Inc.'s LICAT ratio at 147% and total capital increasing $1.0 billion to $41.6 billion Key Financial Strength Ratios | | Q3'23 | Jan 1, 2023 | | :--- | :--- | :--- | | SLF Inc. LICAT ratio (%) | 147 | 142 | | Sun Life Assurance LICAT ratio (%) | 138 | 139 | | Total capital ($ millions) | 41,596 | 40,628 | | Financial leverage ratio (%) | 21.8 | 23.7 | - SLF Inc.'s LICAT ratio **increased five percentage points to 147%** since January 1, 2023, driven by reported net income and capital optimization, partially offset by dividends, debt redemption, and share buybacks[82](index=82&type=chunk) - Capital transactions during the period included the **issuance of $500 million** in subordinated debentures and the **redemption of $1 billion** in subordinated debentures[87](index=87&type=chunk)[88](index=88&type=chunk) - During Q3, SLF Inc. purchased approximately **2.8 million common shares for $186 million** under its Normal Course Issuer Bid (NCIB)[91](index=91&type=chunk) [Performance by Business Segment](index=22&type=section&id=G.%20Performance%20by%20Business%20Segment) Q3 2023 saw Canada, Asset Management, and Asia drive earnings growth, while the U.S. segment declined 19% and Corporate net loss widened significantly [1. Asset Management](index=24&type=section&id=1.%20Asset%20Management) - Asset Management's Q3'23 underlying net income **increased 11% YoY to $330 million**, driven by a **17% increase** in SLC Management's fee-related earnings and higher average net assets at MFS[96](index=96&type=chunk)[99](index=99&type=chunk) Asset Management AUM and Flows (Q3'23) | Metric | MFS (C$ billions) | SLC Management (C$ billions) | Total (C$ billions) | | :--- | :--- | :--- | :--- | | AUM | 754.8 | 219.5 | 974.2 | | Net Flows | (12.5) | 3.4 | (9.1) | [2. Canada](index=26&type=section&id=2.%20Canada) - Canada's Q3'23 underlying net income **grew 15% YoY to $338 million**, reflecting improved disability experience in Group Health & Protection and higher investment income in Wealth & Asset Management[102](index=102&type=chunk)[104](index=104&type=chunk) - Sales growth was strong across the board in Q3'23 vs Q3'22: - Wealth sales & asset management gross flows: **+7%** - Group - Health & Protection sales: **+4%** - Individual - Protection sales: **+24%**[104](index=104&type=chunk) [3. U.S.](index=27&type=section&id=3.%20U.S.) - U.S. Q3'23 underlying net income **decreased 19% YoY to US$140 million**, driven by lower Dental results due to Medicaid redeterminations and less favorable morbidity experience in Group Benefits[106](index=106&type=chunk)[109](index=109&type=chunk) - Group sales in the U.S. **decreased by 36% YoY to US$179 million**, reflecting lower large case Medicaid sales in Dental[112](index=112&type=chunk) [4. Asia](index=29&type=section&id=4.%20Asia) - Asia's Q3'23 underlying net income **increased 8% YoY to $166 million**, driven by business growth in Individual Protection, which saw favorable mortality from lower claims volumes[115](index=115&type=chunk)[118](index=118&type=chunk) - Individual protection sales **surged 57% YoY to $521 million**, driven by higher sales in Hong Kong as pandemic travel restrictions were lifted, and New business CSM **grew to $238 million from $79 million** in the prior year[119](index=119&type=chunk) [5. Corporate](index=31&type=section&id=5.%20Corporate) - Corporate underlying net loss was **$89 million** in Q3'23, compared to a **$22 million loss** in Q3'22, with the increased loss driven by the sale of Sun Life UK, higher operating expenses, and increased debt financing costs[123](index=123&type=chunk) - Reported net loss improved to **$105 million** from **$288 million loss** in the prior year, which had included a **$170 million impairment charge** related to the sale of Sun Life UK[123](index=123&type=chunk)[125](index=125&type=chunk) [Investments](index=32&type=section&id=H.%20Investments) Total general fund invested assets were $162.8 billion, down from year-end 2022, with a high-quality, diversified portfolio including 99% 'BBB' or higher debt securities General Fund Invested Assets Composition (as of Sep 30, 2023) | Asset Type | Carrying Value ($ millions) | % of Total | | :--- | :--- | :--- | | Debt securities | 68,879 | 43% | | Mortgages and loans | 51,994 | 32% | | Cash, cash equivalents and short-term securities | 11,026 | 7% | | Other invested assets | 11,955 | 7% | | Investment properties | 9,952 | 6% | | Equity securities | 7,080 | 4% | | Derivative assets | 1,878 | 1% | | **Total invested assets** | **162,764** | **100%** | - The debt securities portfolio remains high quality, with **71% rated 'A' or higher** and **99% rated 'BBB' or higher** as of September 30, 2023[130](index=130&type=chunk) - The commercial mortgage portfolio's largest exposure is to multi-family residential properties (**35%**), and the uninsured portion of the portfolio had a weighted average loan-to-value ratio of approximately **52%**[135](index=135&type=chunk) [Risk Management](index=35&type=section&id=I.%20Risk%20Management) This section details Sun Life's market risk exposure and management, providing sensitivity analyses on net income, CSM, and LICAT ratio for equity and interest rate shocks Equity Market Sensitivities (as of Sep 30, 2023) | Change in Equity Markets | Potential impact on net income (after tax, $ millions) | Potential impact on CSM (pre-tax, $ millions) | | :--- | :--- | :--- | | 25% decrease | (400) | (575) | | 10% decrease | (150) | (225) | | 10% increase | 175 | 200 | | 25% increase | 425 | 525 | Interest Rate Sensitivities (as of Sep 30, 2023) | Change in Interest Rates | Potential impact on net income (after-tax, $ millions) | Potential impact on CSM (pre-tax, $ millions) | | :--- | :--- | :--- | | 50 basis point decrease | (25) | 75 | | 50 basis point increase | 25 | (100) | - The company uses a variety of methods to manage market risk, including duration management, scenario testing, and hedging programs, with **Over 90% of segregated fund contracts**, as measured by fund values, included in a hedging program as of September 30, 2023[159](index=159&type=chunk)[174](index=174&type=chunk) [Changes in Accounting Policies](index=45&type=section&id=L.%20Changes%20in%20Accounting%20Policies) Effective January 1, 2023, Sun Life adopted IFRS 17 and IFRS 9, significantly changing accounting for insurance contracts and financial instruments, including the introduction of CSM - The company adopted **IFRS 17 Insurance Contracts** and **IFRS 9 Financial Instruments** on January 1, 2023[206](index=206&type=chunk) - Key changes under IFRS 17 include: - Introduction of the **Contractual Service Margin (CSM)** to represent unearned profit, which is recognized over the service period - Use of discount rates based on the characteristics of the insurance contracts, not the supporting assets - Separate presentation of insurance revenue, service expenses, and finance income/expenses[216](index=216&type=chunk)[220](index=220&type=chunk)[223](index=223&type=chunk) - Key changes under IFRS 9 include: - A **new classification model for financial assets** (FVTPL, FVOCI, or amortized cost) based on the business model and cash flow characteristics - Replacement of the 'incurred loss' model with a forward-looking **'expected credit loss' (ECL) model**, leading to earlier recognition of credit losses[229](index=229&type=chunk)[232](index=232&type=chunk) [Non-IFRS Financial Measures](index=52&type=section&id=N.%20Non-IFRS%20Financial%20Measures) This section defines and reconciles non-IFRS financial measures like 'Underlying Net Income', which adjusts reported net income for market impacts and assumption changes, along with other key metrics - **Underlying net income** is a key non-IFRS measure that removes the following from reported net income: - Market-related impacts (differences between actual vs expected market movements) - Assumption changes and management actions (ACMA) - Other adjustments such as acquisition/integration costs and management's ownership of MFS shares[295](index=295&type=chunk)[297](index=297&type=chunk) Reconciliation of Underlying to Reported Net Income (Q3'23) | (after-tax) | Q3'23 ($ millions) | | :--- | :--- | | **Underlying net income** | **930** | | Market-related impacts | 23 | | Assumption changes and management actions | 35 | | Other adjustments | (117) | | **Reported net income** | **871** | - Other important non-IFRS measures used by management include **Assets Under Management (AUM)**, sales and gross flows, **Return on Equity (ROE)**, **financial leverage ratio**, and various metrics related to the **Contractual Service Margin (CSM)**[304](index=304&type=chunk) [Interim Consolidated Financial Statements (Unaudited)](index=65&type=section&id=Interim%20Consolidated%20Financial%20Statements%20(Unaudited)) [Consolidated Statements of Operations](index=65&type=section&id=Consolidated%20Statements%20of%20Operations) The Consolidated Statements of Operations details revenues, expenses, and profits, reporting total revenue of $2.4 billion and net income of $871 million Consolidated Statement of Operations Highlights (Three months ended Sep 30) | | 2023 ($ millions) | 2022 (restated, $ millions) | | :--- | :--- | :--- | | Total revenue | 2,439 | 4,901 | | Total net income (loss) | 937 | 153 | | **Common shareholders' net income (loss)** | **871** | **111** | | Diluted EPS ($) | 1.48 | 0.19 | [Consolidated Statements of Financial Position](index=68&type=section&id=Consolidated%20Statements%20of%20Financial%20Position) The Consolidated Statements of Financial Position shows total assets of $313.8 billion, total liabilities of $290.1 billion, and total equity of $23.8 billion Consolidated Balance Sheet Highlights | | Sep 30, 2023 ($ millions) | Dec 31, 2022 (restated, $ millions) | | :--- | :--- | :--- | | Total general fund assets | 193,858 | 198,316 | | **Total assets** | **313,846** | **323,608** | | Total general fund liabilities | 170,091 | 175,429 | | **Total liabilities** | **290,079** | **300,721** | | **Total equity** | **23,767** | **22,887** | [Consolidated Statements of Cash Flows](index=70&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was $2.2 billion, while investing and financing activities used cash, resulting in a net decrease of $436 million Cash Flow Summary (Nine months ended Sep 30, 2023) | | 2023 ($ millions) | | :--- | :--- | | Net cash provided by operating activities | 2,209 | | Net cash used in investing activities | (318) | | Net cash used in financing activities | (2,447) | | **Increase (decrease) in cash and cash equivalents** | **(436)** | [Condensed Notes to the Interim Consolidated Financial Statements](index=71&type=section&id=Condensed%20Notes%20to%20the%20Interim%20Consolidated%20Financial%20Statements) These notes detail accounting policies, IFRS 17 and IFRS 9 adoption impacts, acquisitions, dispositions, segmented information, financial instrument risks, and capital management - Note 2 provides an extensive summary of the adoption of **IFRS 17** and **IFRS 9**, detailing significant differences from previous standards (IFRS 4 and IAS 39) in scope, measurement, and presentation of insurance contracts and financial instruments[363](index=363&type=chunk)[369](index=369&type=chunk)[445](index=445&type=chunk) - Note 3 details recent acquisitions and dispositions, including the agreement to acquire **Dialogue Health Technologies**, the completed **sale of SLF of Canada UK Limited**, and the acquisition of a **51% interest in Advisors Asset Management Inc. (AAM)**[573](index=573&type=chunk)[574](index=574&type=chunk)[580](index=580&type=chunk) - Note 10 details capital management activities, including the launch of a **Normal Course Issuer Bid (NCIB)** to purchase up to **17 million common shares**, and the issuance and redemption of subordinated debentures[721](index=721&type=chunk)[726](index=726&type=chunk)[728](index=728&type=chunk)

Q2'23 financial & operating results For the period ended June 30, 2023 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 accordance with IFRS. Note to Readers: 2022 Restated Results on Adoption of IFRS 17 and IFRS 9 Non-IFRS financial measures Drivers of earnin ...

Earnings News Release [Shareholder Information](index=2&type=section&id=Shareholder%20Information) This section provides administrative details for Canadian shareholders, including share sale instructions and contact information - Canadian shareholders can sell shares for **$15 plus 3 cents per share** by completing Form A and returning it to TSX Trust Company[1](index=1&type=chunk) - For more information, TSX Trust Company can be reached at **1 877 224-1760**[1](index=1&type=chunk) [Company Overview & Q2'23 Highlights](index=3&type=section&id=Company%20Overview%20%26%20Q2'23%20Highlights) Sun Life reported resilient Q2 2023 results, driven by strong health and protection sales and strategic acquisitions, with new IFRS 17 and IFRS 9 standards impacting reporting - Sun Life manages operations and reports financial results in five business segments: Canada, United States, Asset Management, Asia, and Corporate[3](index=3&type=chunk) - The company adopted IFRS 17 Insurance Contracts and IFRS 9 Financial Instruments on January 1, 2023, which replaced previous standards[3](index=3&type=chunk) - CEO Kevin Strain highlighted strong Q2 results, resilience in a challenging economic environment, and growth in health and protection sales[4](index=4&type=chunk) - Key strategic moves include the announcement to acquire Dialogue Health Technologies, solid Q2 results from DentaQuest, and a strong start to the bancassurance partnership with Dah Sing Bank in Hong Kong[4](index=4&type=chunk) Q2'23 vs Q2'22 Profitability Highlights | Profitability Metric | Q2'23 ($ millions) | Q2'22 ($ millions) | Change ($ millions) | Change (%) | | :------------------- | :----------------- | :----------------- | :------------------ | :--------- | | Underlying net income | 920 | 808 | 112 | 14% | | Reported net income | 660 | 930 | (270) | (29)% | | Underlying EPS | 1.57 | 1.38 | 0.19 | 13.8% | | Reported EPS | 1.12 | 1.58 | (0.46) | (29.1)% | | Underlying ROE | 17.7% | 16.7% | 1.0% pts | - | | Reported ROE | 12.7% | 19.2% | (6.5)% pts | - | [Financial and Operational Highlights - Quarterly Comparison (Q2'23 vs. Q2'22)](index=4&type=section&id=Financial%20and%20Operational%20Highlights%20-%20Quarterly%20Comparison%20(Q2'23%20vs.%20Q2'22)) Q2 2023 underlying net income rose 14% from strong health and protection, but reported net income fell 29% due to market impacts and prior-year gains Q2'23 vs Q2'22 Underlying Net Income by Business Type ($ millions) | Business Type | Q2'23 | Q2'22 | Change ($) | Change (%) | | :------------------------ | :---- | :---- | :--------- | :--------- | | Wealth & asset management | 419 | 420 | (1) | (0.2)% | | Group - Health & Protection | 360 | 238 | 122 | 51% | | Individual - Protection | 265 | 215 | 50 | 23% | | Corporate expenses & other | (124) | (65) | (59) | (90.8)% | | **Total Underlying Net Income** | **920** | **808** | **112** | **14%** | Q2'23 vs Q2'22 Sales Growth by Business Type ($ millions) | Sales Metric | Q2'23 | Q2'22 | Change ($) | Change (%) | | :-------------------------------- | :------- | :------- | :--------- | :--------- | | Wealth sales & asset management gross flows | 42,397 | 56,279 | (13,882) | (25)% | | Group - Health & Protection sales | 656 | 320 | 336 | 105% | | Individual - Protection sales | 604 | 416 | 188 | 45% | - The **14% increase in underlying net income** was driven by strong performance in Group - Health & Protection (up **$122 million**) due to premium growth, better disability experience, and DentaQuest contributions, and Individual - Protection (up **$50 million**) from higher premiums and improved insurance experience[7](index=7&type=chunk)[9](index=9&type=chunk) - The **29% decrease in reported net income** was primarily due to market-related impacts (interest rates and real estate investments), a prior year gain on the sale-leaseback of the Wellesley office, and fair value changes in MFS shares, partially offset by the increase in underlying net income[7](index=7&type=chunk)[9](index=9&type=chunk) [Performance by Business Segment](index=5&type=section&id=Performance%20by%20Business%20Segment) Sun Life's Q2 2023 segments showed varied performance: Asset Management stable with outflows, Canada and U.S. strong, Asia growing, Corporate loss increasing Q2'23 vs Q2'22 Underlying Net Income by Business Segment ($ millions) | Business Segment | Q2'23 | Q2'22 (Restated) | Change ($) | Change (%) | | :--------------- | :---- | :--------------- | :--------- | :--------- | | Asset Management | 296 | 295 | 1 | 0.3% | | Canada | 372 | 299 | 73 | 24% | | U.S. | 215 | 134 | 81 | 60% | | Asia | 150 | 118 | 32 | 27% | | Corporate | (113) | (38) | (75) | (197.4)% | | **Total** | **920** | **808** | **112** | **14%** | Q2'23 vs Q2'22 Reported Net Income by Business Segment ($ millions) | Business Segment | Q2'23 | Q2'22 (Restated) | Change ($) | Change (%) | | :--------------- | :---- | :--------------- | :--------- | :--------- | | Asset Management | 248 | 298 | (50) | (17)% | | Canada | 210 | 476 | (266) | (56)% | | U.S. | 175 | 149 | 26 | 17% | | Asia | 122 | 7 | 115 | nm | | Corporate | (95) | 0 | (95) | nm | | **Total** | **660** | **930** | **(270)** | **(29)%** | [Asset Management](index=5&type=section&id=Asset%20Management) Asset Management Q2'23 vs Q2'22 Financials | Metric | Q2'23 ($ millions) | Q2'22 ($ millions) | Change ($) | Change (%) | | :---------------------- | :----------------- | :----------------- | :--------- | :--------- | | Underlying net income | 296 | 295 | 1 | 0.3% | | Reported net income | 248 | 298 | (50) | (17)% | | AUM ($ billions) | 998 | 905 | 93 | 10.3% | | Total net outflows | 3.3 | (0.3) | 3.6 | nm | - Underlying net income was stable, with higher investment income offset by lower fee-based earnings in MFS due to equity market declines and higher expenses in Canada[9](index=9&type=chunk) - Reported net income decreased by **17%** due to fair value changes in MFS shares and losses on real estate investments[10](index=10&type=chunk) - Asset Management ended Q2'23 with **$998 billion of AUM**, but experienced total net outflows of **$3.3 billion**, primarily from MFS[11](index=11&type=chunk) - BentallGreenOak (BGO) received Gold Recognition in the 2023 Green Lease Leaders program, and InfraRed Capital Partners (InfraRed) invested in JOLT, an e-mobility company, supporting sustainable investing targets[12](index=12&type=chunk) [Canada](index=5&type=section&id=Canada) Canada Q2'23 vs Q2'22 Financials | Metric | Q2'23 ($ millions) | Q2'22 ($ millions) | Change ($) | Change (%) | | :---------------------- | :----------------- | :----------------- | :--------- | :--------- | | Underlying net income | 372 | 299 | 73 | 24% | | Reported net income | 210 | 476 | (266) | (56)% | | Wealth sales & asset management gross flows | 3,130 | 3,341 | (211) | (6)% | | Group - Health & Protection sales | 153 | 92 | 61 | 66% | | Individual - Protection sales | 154 | 126 | 28 | 22% | - Underlying net income increased by **24%**, driven by better disability experience in Group - Health & Protection and improved insurance experience in Individual - Protection[13](index=13&type=chunk)[16](index=16&type=chunk) - Reported net income decreased by **56%** due to market-related impacts, primarily from interest rates and real estate experience[16](index=16&type=chunk) - Canada launched Lumino Health Pharmacy, a new online pharmacy app, and entered an agreement to acquire Dialogue Health Technologies Inc., Canada's premier virtual health care platform[13](index=13&type=chunk)[14](index=14&type=chunk) [U.S.](index=6&type=section&id=U.S.) U.S. Q2'23 vs Q2'22 Financials (US$ millions) | Metric | Q2'23 (US$ millions) | Q2'22 (US$ millions) | Change (US$) | Change (%) | | :---------------------- | :------------------- | :------------------- | :----------- | :--------- | | Underlying net income | 160 | 102 | 58 | 57% | | Reported net income | 133 | 113 | 20 | 18% | | Group sales | 484 | 213 | 271 | 127% | - Underlying net income increased by **57%**, driven by strong performance across all businesses, including good premium growth, DentaQuest contributions, higher investment contributions, and favorable experience (medical stop-loss margins, group disability)[17](index=17&type=chunk)[25](index=25&type=chunk) - U.S. group sales increased by **$271 million**, primarily from higher dental and medical stop-loss sales[18](index=18&type=chunk) - Expanded Advantage Dental+ care practices in Texas and recorded the largest Medicare Advantage sale in DentaQuest history[18](index=18&type=chunk) - Announced a relationship with Independence Health Group to exclusively provide medical stop-loss insurance[19](index=19&type=chunk) [Asia](index=6&type=section&id=Asia) Asia Q2'23 vs Q2'22 Financials | Metric | Q2'23 ($ millions) | Q2'22 ($ millions) | Change ($) | Change (%) | | :---------------------- | :----------------- | :----------------- | :--------- | :--------- | | Underlying net income | 150 | 118 | 32 | 27% | | Reported net income | 122 | 7 | 115 | nm | | Wealth sales & asset management gross flows | 1,616 | 3,298 | (1,682) | (51)% | | Individual - Protection sales | 450 | 290 | 160 | 55% | | New business CSM | 118 | 70 | 48 | 68.6% | - Underlying net income increased by **27%**, driven by higher premiums and improved expenses and lapse experience in joint ventures for Individual - Protection, partially offset by lower fee-based earnings in Wealth & Asset Management[20](index=20&type=chunk)[26](index=26&type=chunk) - Individual sales were up **55%**, driven by higher sales in Hong Kong, China, and India[26](index=26&type=chunk) - New business CSM increased to **$118 million**, primarily from sales and favorable product mix in High-Net-Worth and Hong Kong[22](index=22&type=chunk) - Introduced eSunPro, a new digital health care service platform in Hong Kong, and opened the Sun Gateway prestige Client center for High-Net-Worth Clients[23](index=23&type=chunk)[24](index=24&type=chunk) [Corporate](index=7&type=section&id=Corporate) Corporate Q2'23 vs Q2'22 Financials | Metric | Q2'23 ($ millions) | Q2'22 (Restated) ($ millions) | Change ($) | Change (%) | | :---------------------- | :----------------- | :---------------------------- | :--------- | :--------- | | Underlying net loss | (113) | (38) | (75) | (197.4)% | | Reported net loss | (95) | 0 | (95) | nm | - Underlying net loss increased due to higher operating expenses (including incentive compensation), increased debt financing costs, and the impact from the sale of Sun Life UK, partially offset by higher investment income from surplus assets[27](index=27&type=chunk) - Reported net loss was **$95 million**, compared to nil in the prior year, reflecting the change in underlying net loss and market-related impacts, partially offset by a gain on the sale of Sun Life UK[28](index=28&type=chunk) [Sustainability and Capital Initiatives](index=7&type=section&id=Sustainability%20and%20Capital%20Initiatives) Sun Life continues its commitment to sustainable investing, evidenced by its recognition as a top sustainable corporation and the issuance of a new sustainability bond - Sun Life was recognized as one of Corporate Knights' Global 100 Most Sustainable Corporations in the World for the **14th consecutive year**, ranking as the top insurance company globally[29](index=29&type=chunk) - The company announced its second sustainability bond offering, issuing **$500 million**, with proceeds to be invested in green and/or social assets[29](index=29&type=chunk) Management's Discussion and Analysis [A. How We Report Our Results](index=10&type=section&id=A.%20How%20We%20Report%20Our%20Results) Sun Life manages operations across five segments, adopting IFRS 17 and IFRS 9 on January 1, 2023, impacting financial reporting - Sun Life's operations are managed and reported in five business segments: Canada, United States, Asset Management, Asia, and Corporate[34](index=34&type=chunk) - Effective January 1, 2023, Sun Life adopted IFRS 17 Insurance Contracts and IFRS 9 Financial Instruments, replacing IFRS 4 and IAS 39, respectively[35](index=35&type=chunk) - 2022 results have been restated for the adoption of the new standards, but may not be fully representative of future earnings as asset and liability portfolios were not managed under these standards at that time[37](index=37&type=chunk) - The company reports certain financial information using non-IFRS financial measures to provide useful insights into performance and facilitate period-to-period comparisons[39](index=39&type=chunk) [B. Financial Summary](index=12&type=section&id=B.%20Financial%20Summary) The financial summary highlights Q2 2023 and YTD profitability, growth, and strength, showing increased underlying net income, strong protection sales, and decreased wealth flows Q2'23 and YTD 2023 Key Financial Metrics | Metric | Q2'23 | Q1'23 | Q2'22 (Restated) | YTD 2023 | YTD 2022 (Restated) | | :---------------------------------------- | :--------- | :--------- | :--------------- | :--------- | :------------------ | | Underlying net income ($ millions) | 920 | 895 | 808 | 1,815 | 1,528 | | Reported net income ($ millions) | 660 | 806 | 930 | 1,466 | 1,595 | | Underlying EPS ($) | 1.57 | 1.52 | 1.38 | 3.09 | 2.61 | | Reported EPS ($) | 1.12 | 1.37 | 1.58 | 2.49 | 2.72 | | Underlying ROE (%) | 17.7% | 17.3% | 16.7% | 17.5% | 15.6% | | Reported ROE (%) | 12.7% | 15.6% | 19.2% | 14.2% | 16.3% | | Wealth sales & asset management gross flows ($ millions) | 42,397 | 46,349 | 56,279 | 88,746 | 113,235 | | Group - Health & Protection sales ($ millions) | 656 | 543 | 320 | 1,199 | 710 | | Individual - Protection sales ($ millions) | 604 | 511 | 416 | 1,115 | 825 | | Total AUM ($ billions) | 1,366.8 | 1,363.6 | 1,257.4 | 1,366.8 | 1,257.4 | | New business CSM ($ millions) | 270 | 232 | 189 | 502 | 332 | | SLF Inc. LICAT ratio (%) | 148% | 148% | 142% (Jan 1, 2023) | - | - | | Financial leverage ratio (%) | 23.3% | 23.2% | 23.7% (Jan 1, 2023) | - | - | - Underlying net income increased by **14% in Q2'23** and **19% year-to-date 2023** compared to prior periods, while reported net income decreased by **29% in Q2'23** and **8% year-to-date 2023**[43](index=43&type=chunk) - Wealth sales & asset management gross flows decreased by **25% in Q2'23** and **22% year-to-date**, while Group - Health & Protection sales surged by **105% in Q2'23** and **69% year-to-date**[43](index=43&type=chunk) [C. Profitability](index=13&type=section&id=C.%20Profitability) Sun Life's Q2 2023 underlying net income rose 14% from strong health and protection, but reported net income fell 29% due to market impacts and prior-year gains Q2'23 vs Q2'22 Profitability Reconciliation ($ millions, after-tax) | Metric | Q2'23 | Q2'22 (Restated) | Change ($) | Change (%) | | :---------------------------------------- | :---- | :--------------- | :--------- | :--------- | | **Underlying net income** | **920** | **808** | **112** | **14%** | | Market-related impacts | (220) | 118 | (338) | nm | | Assumption changes and management actions | 7 | (22) | 29 | nm | | Other adjustments | (47) | 26 | (73) | nm | | **Reported net income** | **660** | **930** | **(270)** | **(29)%** | - Underlying net income increased by **$112 million (14%) in Q2'23**, primarily from Group - Health & Protection (up **$122 million**) due to premium growth, better disability experience, and DentaQuest contributions, and Individual - Protection (up **$50 million**) from higher premiums and improved insurance experience[46](index=46&type=chunk) - Reported net income decreased by **$270 million (29%) in Q2'23**, mainly due to market-related impacts (real estate investments and interest rates), a prior year gain on the sale-leaseback of the Wellesley office, and fair value changes in MFS shares[46](index=46&type=chunk) - Year-to-date, underlying net income increased by **$287 million (19%)**, while reported net income decreased by **$129 million (8%)**, driven by similar factors as the quarterly comparison[53](index=53&type=chunk)[57](index=57&type=chunk) - Foreign exchange translation positively impacted Q2'23 underlying net income by **$27 million** and reported net income by **$25 million**[47](index=47&type=chunk)[52](index=52&type=chunk) [D. Growth](index=15&type=section&id=D.%20Growth) Sun Life's Q2 2023 growth was mixed, with strong Group and Individual Protection sales, but decreased wealth sales and asset management gross flows, while AUM and new business CSM increased Q2'23 vs Q2'22 Sales and Gross Flows ($ millions) | Sales Category | Q2'23 | Q2'22 | Change ($) | Change (%) | | :---------------------------------------- | :------- | :------- | :--------- | :--------- | | Wealth sales & asset management gross flows | 42,397 | 56,279 | (13,882) | (25)% | | Group - Health & Protection sales | 656 | 320 | 336 | 105% | | Individual - Protection sales | 604 | 416 | 188 | 45% | | New business Contractual Service Margin (CSM) | 270 | 189 | 81 | 42.9% | - Total AUM increased by **$48.3 billion (4%)** from December 31, 2022, reaching **$1,366.8 billion**, primarily driven by favorable market movements and the AAM acquisition, partially offset by foreign exchange translation and net outflows[6](index=6&type=chunk)[66](index=66&type=chunk) - Segregated fund and third-party AUM experienced net outflows of **$2.2 billion** during the quarter, with MFS having net outflows of **$5.3 billion**[67](index=67&type=chunk) - New business CSM, representing growth from sales activity, increased to **$270 million in Q2'23** from **$189 million** in the prior year, driven by Canada individual protection sales and Asia's High-Net-Worth and Hong Kong sales[64](index=64&type=chunk) [E. Contractual Service Margin](index=17&type=section&id=E.%20Contractual%20Service%20Margin) The Contractual Service Margin (CSM) grew 4% to $11.3 billion in H1 2023, driven by new business, favorable experience, and assumption changes, despite currency impacts and the Sun Life UK sale - Total CSM ended Q2'23 at **$11.3 billion**, an increase of **$0.4 billion or 4%** for the six months ended June 30, 2023[70](index=70&type=chunk) - Organic CSM movement was driven by new insurance business, reflecting individual protection sales in Canada and Asia, and favorable insurance experience in Canada[71](index=71&type=chunk) - The impact of change in assumptions included a contract modification that increased CSM[71](index=71&type=chunk) - Unfavorable currency impacts and a **$262 million** reduction from the sale of Sun Life UK partially offset the CSM growth[71](index=71&type=chunk) CSM Movement (Six Months Ended June 30, 2023) | CSM Component | Amount ($ millions) | | :---------------------------------- | :------------------ | | Beginning of Period | 10,865 | | Impact of new insurance business | 502 | | Expected movements from asset returns & locked-in rates | 256 | | Insurance experience gains/losses | 114 | | CSM recognized for services provided | (443) | | Organic CSM Movement | 429 | | Impact of markets & other | 7 | | Impact of change in assumptions | 330 | | Currency impact | (111) | | Disposition (Sun Life UK sale) | (262) | | **Total CSM Movement** | **393** | | **Contractual Service Margin, End of Period** | **11,258** | [F. Financial Strength](index=18&type=section&id=F.%20Financial%20Strength) Sun Life maintained strong Q2 2023 financial strength, with LICAT ratios above minimums and total capital rising to $41.3 billion, supported by net income, CSM growth, and strategic initiatives Financial Strength Metrics (Q2'23 vs Jan 1, 2023) | Metric | Q2'23 | Jan 1, 2023 | | :------------------------------------ | :------ | :---------- | | SLF Inc. LICAT ratio | 148% | 142% | | Sun Life Assurance LICAT ratio | 139% | 139% | | Financial leverage ratio | 23.3% | 23.7% | | Total capital ($ billions) | 41.3 | 40.6 | | Book value per common share ($) | 34.86 | 34.60 | - SLF Inc.'s LICAT ratio increased by **six percentage points to 148%** as at June 30, 2023, driven by reported net income, the sale of Sun Life UK, and capital optimization[76](index=76&type=chunk) - Total capital was **$41.3 billion** as at June 30, 2023, an increase of **$0.7 billion** compared to January 1, 2023, primarily due to reported net income and an increase in CSM[80](index=80&type=chunk) - Sun Life commenced a **15-year exclusive bancassurance partnership** with Dah Sing Bank in Hong Kong, issued a **$500 million sustainability bond**, and announced an intention to launch a normal course issuer bid to purchase up to **17 million common shares**[82](index=82&type=chunk)[83](index=83&type=chunk)[86](index=86&type=chunk) - The company also announced an agreement to acquire Dialogue Health Technologies Inc., increasing its ownership interest from approximately **23% to 97%**[85](index=85&type=chunk) [G. Performance by Business Segment](index=20&type=section&id=G.%20Performance%20by%20Business%20Segment) Sun Life's Q2 2023 segments showed varied performance: Asset Management stable with outflows, Canada and U.S. strong, Asia growing, Corporate loss increasing Q2'23 vs Q2'22 Underlying Net Income by Business Segment ($ millions) | Business Segment | Q2'23 | Q2'22 (Restated) | Change ($) | Change (%) | | :--------------- | :---- | :--------------- | :--------- | :--------- | | Asset Management | 296 | 295 | 1 | 0.3% | | Canada | 372 | 299 | 73 | 24% | | U.S. | 215 | 134 | 81 | 60% | | Asia | 150 | 118 | 32 | 27% | | Corporate | (113) | (38) | (75) | (197.4)% | | **Total** | **920** | **808** | **112** | **14%** | Q2'23 vs Q2'22 Reported Net Income by Business Segment ($ millions) | Business Segment | Q2'23 | Q2'22 (Restated) | Change ($) | Change (%) | | :--------------- | :---- | :--------------- | :--------- | :--------- | | Asset Management | 248 | 298 | (50) | (17)% | | Canada | 210 | 476 | (266) | (56)% | | U.S. | 175 | 149 | 26 | 17% | | Asia | 122 | 7 | 115 | nm | | Corporate | (95) | 0 | (95) | nm | | **Total** | **660** | **930** | **(270)** | **(29)%** | [1. Asset Management](index=22&type=section&id=1.%20Asset%20Management) Asset Management Q2'23 vs Q2'22 Financials | Metric | Q2'23 ($ millions) | Q2'22 ($ millions) | Change ($) | Change (%) | | :---------------------- | :----------------- | :----------------- | :--------- | :--------- | | Underlying net income | 296 | 295 | 1 | 0.3% | | Reported net income | 248 | 298 | (50) | (17)% | | AUM ($ billions) | 997.8 | 905.3 | 92.5 | 10.2% | | Gross flows ($ billions) | 37.7 | 49.6 | (11.9) | (24)% | | Net flows ($ billions) | (3.3) | 0.3 | (3.6) | nm | - Underlying net income was largely flat, with higher investment income offset by lower fee-based earnings in MFS due to equity market declines and higher expenses in Canada[92](index=92&type=chunk)[97](index=97&type=chunk) - Reported net income decreased by **17%** due to fair value changes in management's ownership of MFS shares and losses on real estate investments[92](index=92&type=chunk) - Asset Management AUM increased by **5%** from December 31, 2022, driven by net asset value changes and the AAM acquisition, but experienced net outflows of **$3.3 billion** in Q2'23[96](index=96&type=chunk)[97](index=97&type=chunk) [2. Canada](index=24&type=section&id=2.%20Canada) Canada Q2'23 vs Q2'22 Financials | Metric | Q2'23 ($ millions) | Q2'22 ($ millions) | Change ($) | Change (%) | | :---------------------- | :----------------- | :----------------- | :--------- | :--------- | | Underlying net income | 372 | 299 | 73 | 24% | | Reported net income | 210 | 476 | (266) | (56)% | | Wealth sales & asset management gross flows | 3,130 | 3,341 | (211) | (6)% | | Group - Health & Protection sales | 153 | 92 | 61 | 66% | | Individual - Protection sales | 154 | 126 | 28 | 22% | - Underlying net income increased by **24%**, reflecting better disability experience in Group - Health & Protection and improved insurance experience in Individual - Protection[99](index=99&type=chunk)[101](index=101&type=chunk) - Reported net income decreased by **56%**, primarily due to market-related impacts from interest rates and real estate experience[99](index=99&type=chunk) - Group sales increased by **66%** due to higher large case sales, and Individual sales increased by **22%** from higher participating whole life insurance sales[101](index=101&type=chunk) [3. U.S.](index=25&type=section&id=3.%20U.S.) U.S. Q2'23 vs Q2'22 Financials (US$ millions) | Metric | Q2'23 (US$ millions) | Q2'22 (US$ millions) | Change (US$) | Change (%) | | :---------------------- | :------------------- | :------------------- | :----------- | :--------- | | Underlying net income | 160 | 102 | 58 | 57% | | Reported net income | 133 | 113 | 20 | 18% | | Group - Health & Protection sales | 360 | 168 | 192 | 114.3% | - Underlying net income increased by **57%**, driven by strong performance across all businesses, including good premium growth, DentaQuest contributions, higher investment contributions, and favorable experience (medical stop-loss margins, group disability)[103](index=103&type=chunk)[106](index=106&type=chunk) - Reported net income increased by **18%**, reflecting the increase in underlying net income and favorable assumption changes and management actions (ACMA), partially offset by a prior year gain on the sale-leaseback of the Wellesley office[103](index=103&type=chunk) - U.S. group sales increased by **US$192 million**, driven by higher dental and medical stop-loss sales[109](index=109&type=chunk) [4. Asia](index=27&type=section&id=4.%20Asia) Asia Q2'23 vs Q2'22 Financials | Metric | Q2'23 ($ millions) | Q2'22 ($ millions) | Change ($) | Change (%) | | :---------------------- | :----------------- | :----------------- | :--------- | :--------- | | Underlying net income | 150 | 118 | 32 | 27% | | Reported net income | 122 | 7 | 115 | nm | | Wealth sales & asset management gross flows | 1,616 | 3,298 | (1,682) | (51)% | | Individual - Protection sales | 450 | 290 | 160 | 55% | | New business CSM | 118 | 70 | 48 | 68.6% | - Underlying net income increased by **27%**, driven by higher premiums and improved expenses and lapse experience in joint ventures for Individual - Protection, partially offset by lower fee-based earnings in Wealth & Asset Management[112](index=112&type=chunk)[114](index=114&type=chunk) - Reported net income increased by **$115 million**, driven by market-related impacts (interest rates, real estate experience) and the increase in underlying net income[112](index=112&type=chunk) - Individual sales were up **55%**, driven by higher sales in Hong Kong, China, and India, contributing to a new business CSM of **$118 million**[117](index=117&type=chunk) [5. Corporate](index=29&type=section&id=5.%20Corporate) Corporate Q2'23 vs Q2'22 Financials | Metric | Q2'23 ($ millions) | Q2'22 (Restated) ($ millions) | Change ($) | Change (%) | | :---------------------- | :----------------- | :---------------------------- | :--------- | :--------- | | Underlying net loss | (113) | (38) | (75) | (197.4)% | | Reported net loss | (95) | 0 | (95) | nm | - Underlying net loss increased due to higher operating expenses (including incentive compensation), increased debt financing costs, and the impact from the sale of Sun Life UK, partially offset by higher investment income from surplus assets[121](index=121&type=chunk) - The sale of SLF of Canada UK Limited was completed on April 3, 2023, recognizing a gain of **$19 million** in reported net income[125](index=125&type=chunk) [H. Investments](index=30&type=section&id=H.%20Investments) Sun Life's general fund invested assets slightly decreased to $165.8 billion by June 30, 2023, mainly due to foreign exchange, offset by fair value gains from declining interest rates, maintaining a diversified portfolio - Total general fund invested assets were **$165.8 billion** as at June 30, 2023, down **$3.0 billion** from December 31, 2022, mainly due to unfavorable foreign exchange translation, partially offset by increases in net fair value from declining interest rates[127](index=127&type=chunk) Composition of General Fund Invested Assets (June 30, 2023) | Investment Type | Carrying value ($ millions) | % of Total carrying value | | :------------------------------------ | :-------------------------- | :------------------------ | | Debt securities | 72,469 | 44% | | Mortgages and loans | 52,338 | 32% | | Cash, cash equivalents and short-term securities | 10,348 | 6% | | Other invested assets | 11,296 | 7% | | Investment properties | 10,001 | 6% | | Equity securities | 7,187 | 4% | | Derivative assets | 2,178 | 1% | | **Total invested assets** | **165,817** | **100%** | - Debt securities with a credit rating of 'A' or higher represented **72%** of the total debt securities, and gross unrealized losses decreased to **$7,550 million** for FVTPL and **$879 million** for FVOCI debt securities[131](index=131&type=chunk)[132](index=132&type=chunk) - The mortgage portfolio consisted entirely of commercial mortgages (**$14.4 billion**), with an uninsured commercial portfolio weighted average loan-to-value ratio of approximately **52%**. Impaired mortgages and loans, net of allowances, were **$10 million**[136](index=136&type=chunk)[137](index=137&type=chunk)[139](index=139&type=chunk) - The net fair value of derivatives was an asset of **$550 million** as at June 30, 2023, an increase from a liability of **$256 million** at December 31, 2022[141](index=141&type=chunk) [I. Risk Management](index=33&type=section&id=I.%20Risk%20Management) Sun Life's Risk Management Framework addresses market, insurance, credit, business, operational, and liquidity risks, using hedging and sensitivity analyses to quantify financial impacts - Sun Life's Risk Management Framework covers six major categories: market, insurance, credit, business and strategic, operational, and liquidity risks, with established risk appetite limits for key market risks[146](index=146&type=chunk) - The company is exposed to equity risk from segregated fund guarantees, participating insurance contracts, asset management fees, and direct investments, which can impact net income, CSM, and capital[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) - Interest rate and spread risk arises from insurance and investment contracts with guarantees, managed through an asset-liability management program and hedging strategies using derivatives[151](index=151&type=chunk)[152](index=152&type=chunk) - Real estate risk stems from direct ownership and real estate-backed investments, with fluctuations affecting net income, CSM, and capital[157](index=157&type=chunk) [1. Equity Market Sensitivities](index=35&type=section&id=1.%20Equity%20Market%20Sensitivities) Estimated Impact of Equity Market Changes (June 30, 2023) | Change in Equity Markets | Potential impact on net income (after tax) ($ millions) | Potential impact on CSM (pre-tax) ($ millions) | Potential impact on LICAT ratio (% point decrease/increase) | | :----------------------- | :------------------------------------------------------ | :--------------------------------------------- | :---------------------------------------------------------- | | 25% decrease | (375) | (625) | 3.0% point decrease | | 10% decrease | (150) | (250) | 1.0% point decrease | | 10% increase | 150 | 225 | 1.0% point increase | | 25% increase | 400 | 575 | 2.5% point increase | [2. Interest Rate Sensitivities](index=35&type=section&id=2.%20Interest%20Rate%20Sensitivities) Estimated Impact of Interest Rate Changes (June 30, 2023) | Change in Interest Rates | Potential impact on net income (after-tax) ($ millions) | Potential impact on CSM (pre-tax) ($ millions) | Potential impact on OCI ($ millions) | Potential impact on LICAT ratio (% point increase/decrease) | | :----------------------- | :------------------------------------------------------ | :--------------------------------------------- | :----------------------------------- | :---------------------------------------------------------- | | 50 basis point decrease | — | 125 | 225 | 2.0% point increase | | 50 basis point increase | 25 | (125) | (225) | 2.0% point decrease | [3. Credit Spread and Swap Sensitivities](index=36&type=section&id=3.%20Credit%20Spread%20and%20Swap%20Sensitivities) Estimated Impact of Credit Spread Changes (June 30, 2023) | Change in Credit Spreads | Potential impact on net income (after tax) ($ millions) | Potential impact on CSM (pre-tax) ($ millions) | Potential impact on OCI ($ millions) | Potential impact on LICAT ratio (% point increase/decrease) | | :----------------------- | :------------------------------------------------------ | :--------------------------------------------- | :----------------------------------- | :---------------------------------------------------------- | | 50 basis point decrease | 75 | 100 | 200 | 1.5% point increase | | 50 basis point increase | (100) | (150) | (200) | 2.0% point decrease | Estimated Impact of Swap Spread Changes (June 30, 2023) | Change in Swap Spreads | Potential impact on net income (after-tax) ($ millions) | | :--------------------- | :------------------------------------------------------ | | 20 basis point decrease | (25) | | 20 basis point increase | 25 | [4. Real Estate Sensitivities](index=38&type=section&id=4.%20Real%20Estate%20Sensitivities) Estimated Impact of Real Estate Value Changes (June 30, 2023) | Change in Real Estate Values | Potential impact on net income (after-tax) ($ millions) | Potential impact on CSM (pre-tax) ($ millions) | | :--------------------------- | :------------------------------------------------------ | :--------------------------------------------- | | 10% decrease | (475) | (100) | | 10% increase | 475 | 100 | [5. Segregated Funds Risk & Hedging](index=38&type=section&id=5.%20Segregated%20Funds%20Risk%20%26%20Hedging) - Over **90%** of segregated fund contracts, measured by fund values, were included in a hedging program as at June 30, 2023, using derivative instruments and fixed income assets to mitigate interest rate and equity market exposure[173](index=173&type=chunk) - The hedging strategy is applied at both the line of business and total company levels, using techniques like re-balancing short-dated derivatives and longer-dated put options[174](index=174&type=chunk) [6. Additional Cautionary Language and Key Assumptions Related to Sensitivities](index=38&type=section&id=6.%20Additional%20Cautionary%20Language%20and%20Key%20Assumptions%20Related%20to%20Sensitivities) - Market risk sensitivities are indicative estimates based on specific assumptions and do not account for indirect effects, interactions between risk factors, model error, or changes in other assumptions[176](index=176&type=chunk)[178](index=178&type=chunk) - Actual results can differ materially from these estimates, and the extent of difference generally increases with larger movements in risk variables[178](index=178&type=chunk) - Hedging programs may expose the company to other risks, including basis risk, volatility risk, and increased derivative counterparty credit risk, which can impact effectiveness and financial viability[180](index=180&type=chunk) [J. Additional Financial Disclosure](index=39&type=section&id=J.%20Additional%20Financial%20Disclosure) This section details supplementary financial information, including increased total revenue from net investment income, a slight decrease in net insurance contract liabilities, and cash flow activities, alongside historical quarterly results [1. Revenue](index=39&type=section&id=1.%20Revenue) Q2'23 and YTD 2023 Revenue ($ millions) | Revenue Category | Q2'23 | Q1'23 | Q2'22 (Restated) | YTD 2023 | YTD 2022 (Restated) | | :-------------------- | :----- | :----- | :--------------- | :------- | :------------------ | | Insurance revenue | 5,283 | 5,282 | 4,405 | 10,565 | 8,448 | | Net Investment income (loss) | 449 | 4,800 | (9,151) | 5,249 | (19,692) | | Fee income | 1,936 | 1,901 | 1,779 | 3,837 | 3,618 | | **Total revenue** | **7,668** | **11,983** | **(2,967)** | **19,651** | **(7,626)** | - Total revenue increased by **$10.6 billion in Q2'23** compared to the prior year, and by **$27.3 billion year-to-date**, primarily driven by higher net investment income from fair value changes of assets[184](index=184&type=chunk)[185](index=185&type=chunk) - Foreign exchange translation contributed a **$0.2 billion increase in revenue for Q2'23** and **$0.6 billion year-to-date**[184](index=184&type=chunk)[185](index=185&type=chunk) [2. Changes in the Statements of Financial Position and in Shareholders' Equity](index=40&type=section&id=2.%20Changes%20in%20the%20Statements%20of%20Financial%20Position%20and%20in%20Shareholders'%20Equity) - The net liabilities balance for insurance contracts issued was **$128.9 billion** as at June 30, 2023, a decrease from **$131.2 billion** at December 31, 2022, mainly due to dispositions and changes in insurance service result[187](index=187&type=chunk) - Total shareholders' equity, including preferred shares, was **$22.7 billion** as at June 30, 2023, an increase from **$22.5 billion** at December 31, 2022[187](index=187&type=chunk) - The change in total shareholders' equity included **$1,506 million** in total shareholders' net income and **$82 million** in net unrealized gains on FVOCI assets, partially offset by **$863 million** in common share dividends and **$322 million** in unfavorable foreign exchange translation[190](index=190&type=chunk) [3. Cash Flows](index=40&type=section&id=3.%20Cash%20Flows) Q2'23 and YTD 2023 Cash Flows ($ millions) | Cash Flow Activity | Q2'23 | Q1'23 | Q2'22 (Restated) | YTD 2023 | YTD 2022 (Restated) | | :------------------------------ | :---- | :---- | :--------------- | :------- | :------------------ | | Operating activities | 289 | 20 | 1,983 | 309 | 1,512 | | Investing activities | 64 | (244) | (2,589) | (180) | (2,641) | | Financing activities | (756) | (264) | 1,261 | (1,020) | 907 | | Changes due to exchange rates | (74) | (33) | 78 | (107) | 14 | | Increase (decrease) in cash and cash equivalents | (477) | (521) | 733 | (998) | (208) | | Net cash and cash equivalents, end of period | 8,374 | 8,851 | 7,485 | 8,374 | 7,485 | - Operating activities generated **$289 million in Q2'23** and **$309 million year-to-date 2023**[188](index=188&type=chunk) - Cash flows used in financing activities decreased year-over-year in Q2'23 due to higher borrowing from credit facilities in the prior year[189](index=189&type=chunk) [4. Quarterly Financial Results](index=41&type=section&id=4.%20Quarterly%20Financial%20Results) Quarterly Financial Results (Q2'23 to Q3'21) | Metric / Quarter | Q2'23 | Q1'23 | Q4'22 (IFRS 17/9) | Q3'22 (IFRS 17/9) | Q2'22 (IFRS 17/9) | Q1'22 (IFRS 17/9) | Q4'22 (IFRS 4/IAS 39) | Q3'22 (IFRS 4/IAS 39) | Q2'22 (IFRS 4/IAS 39) | Q1'22 (IFRS 4/IAS 39) | Q4'21 (IFRS 4/IAS 39) | Q3'21 (IFRS 4/IAS 39) | | :--------------- | :---- | :---- | :---------------- | :---------------- | :---------------- | :---------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------- | | Total revenue ($ millions) | 7,668 | 11,983 | 8,494 | 4,901 | (2,967) | (4,659) | 12,301 | 8,630 | 2,011 | 380 | 12,995 | 8,510 | | Underlying net income ($ millions) | 920 | 895 | 892 | 949 | 808 | 720 | 990 | 949 | 892 | 843 | 898 | 902 | | Reported net income ($ millions) | 660 | 806 | 1,165 | 111 | 930 | 665 | 951 | 466 | 785 | 858 | 1,078 | 1,019 | | Underlying EPS ($) | 1.57 | 1.52 | 1.52 | 1.62 | 1.38 | 1.23 | 1.69 | 1.62 | 1.52 | 1.44 | 1.53 | 1.54 | | Reported EPS ($) | 1.12 | 1.37 | 1.98 | 0.19 | 1.58 | 1.13 | 1.62 | 0.80 | 1.34 | 1.46 | 1.83 | 1.74 | - Q2'23 underlying net income was **$920 million**, with reported net income at **$660 million**. This compares to Q2'22 underlying net income of **$808 million** and reported net income of **$930 million** (restated under IFRS 17 and IFRS 9)[192](index=192&type=chunk) - The report provides a historical overview of financial performance, noting the impact of IFRS 17 and IFRS 9 adoption on comparability with prior periods[191](index=191&type=chunk)[192](index=192&type=chunk) [K. Legal and Regulatory Proceedings](index=42&type=section&id=K.%20Legal%20and%20Regulatory%20Proceedings) Sun Life is routinely involved in legal and regulatory matters, with provisions established based on management's assessment, and no significant updates reported - Sun Life is regularly involved in legal actions and inquiries from government and regulatory bodies concerning compliance with insurance, securities, and other laws[201](index=201&type=chunk) - Provisions for legal proceedings related to insurance contracts are included in Insurance contract liabilities, while other provisions are established if a payment is probable and reliably estimable[201](index=201&type=chunk) - There have been no significant updates to legal and regulatory proceedings since the 2022 Annual Consolidated Financial Statements[201](index=201&type=chunk) [L. Changes in Accounting Policies](index=43&type=section&id=L.%20Changes%20in%20Accounting%20Policies) Sun Life adopted IFRS 17 and IFRS 9 on January 1, 2023, fundamentally changing insurance contract and financial instrument accounting, especially for CSM and the ECL model [1. Changes in Accounting Policies](index=43&type=section&id=1.%20Changes%20in%20Accounting%20Policies) - Sun Life adopted IFRS 17 Insurance Contracts and IFRS 9 Financial Instruments on January 1, 2023, replacing IFRS 4 and IAS 39, respectively[205](index=205&type=chunk)[206](index=206&type=chunk) - IFRS 17 establishes new principles for the recognition, measurement, presentation, and disclosure of insurance contracts, including the introduction of the Contractual Service Margin (CSM) representing unearned profit[205](index=205&type=chunk)[208](index=208&type=chunk) - IFRS 9 introduces new classification categories for financial assets (FVTPL, FVOCI, amortized cost) and replaces the 'incurred loss' model with a forward-looking 'expected credit loss' (ECL) model for impairment[226](index=226&type=chunk)[229](index=229&type=chunk) - The company elected to apply a classification overlay for financial assets in comparative periods as if IFRS 9 had been effective since January 1, 2022[206](index=206&type=chunk) [2. Critical Accounting Policies and Estimates](index=45&type=section&id=2.%20Critical%20Accounting%20Policies%20and%20Estimates) - Significant judgment is required in making assumptions and estimates for accounting policies, particularly for insurance contracts and financial instruments under IFRS 17 and IFRS 9[232](index=232&type=chunk) - Key assumptions for insurance contracts include mortality, morbidity, lapse and other policyholder behavior, expenses, and current discount rates, which are regularly reviewed and subject to external actuarial peer review[240](index=240&type=chunk)[243](index=243&type=chunk) - The Risk Adjustment (RA) for non-financial risk is measured as compensation for uncertainty in future cash flow estimates, corresponding to an overall confidence level of approximately **80-85%**[241](index=241&type=chunk)[264](index=264&type=chunk) - The Contractual Service Margin (CSM) represents unearned profit recognized as insurance contract services are provided, with its measurement involving interest accretion and changes in fulfillment cash flows related to future service[242](index=242&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk)[268](index=268&type=chunk) Sensitivities to Insurance Assumptions (As at December 31, 2022) | Sensitivity (where adverse) | Potential impact on CSM (pre-tax) ($ millions) | Potential impact on net income (after-tax) ($ millions) | | :---------------------------------------------- | :--------------------------------------------- | :------------------------------------------------------ | | Policyholder Behaviour (10% increase/decrease) | (850) | 75 | | Life Mortality rates (2% increase) | (75) | (25) | | Annuity Mortality rates (2% decrease) | (175) | 25 | | Morbidity rates (5% incidence increase and 5% termination decrease) | (75) | (175) | | Expenses (5% increase) | (175) | — | [M. Internal Control Over Financial Reporting](index=49&type=section&id=M.%20Internal%20Control%20Over%20Financial%20Reporting) Management maintains effective internal control over financial reporting, modified for IFRS 17 and IFRS 9 implementation, with no material changes believed to have occurred - Management is responsible for establishing and maintaining adequate internal control over financial reporting to ensure reliability and IFRS compliance[280](index=280&type=chunk) - Internal controls were modified to reflect key changes from IFRS 17 and IFRS 9 implementations, with a comprehensive enterprise-wide governance structure in place[281](index=281&type=chunk)[282](index=282&type=chunk) - The company believes there have been no material changes to its internal control over financial reporting as a result of adopting the new accounting standards during the period ended June 30, 2023[283](index=283&type=chunk) [N. Non-IFRS Financial Measures](index=50&type=section&id=N.%20Non-IFRS%20Financial%20Measures) This section defines and reconciles non-IFRS financial measures, providing insights into Sun Life's business performance and long-term earnings potential through adjustments to reported IFRS figures - Underlying net income is a non-IFRS financial measure that adjusts IFRS income to reflect management's view of the company's underlying business performance and long-term earnings potential[290](index=290&type=chunk) - Effective January 1, 2023, the definition of underlying net income was refined to update market-related impacts, adjust for management's ownership of MFS shares, and remove intangible asset amortization on acquired finite-life intangibles[291](index=291&type=chunk) Q2'23 Underlying Net Income Adjustments ($ millions, after-tax) | Adjustment Category | Q2'23 | Q1'23 | Q2'22 (Restated) | | :---------------------------------------- | :---- | :---- | :--------------- | | **Underlying net income** | **920** | **895** | **808** | | Market-related impacts | (220) | (64) | 118 | | Assumption changes and management actions | 7 | (5) | (22) | | Other adjustments | (47) | (20) | 26 | | **Reported net income** | **660** | **806** | **930** | - Additional non-IFRS measures include Assets under management (AUM), Contractual Service Margin (CSM) movement analysis, Financial leverage ratio, and various profitability margins (e.g., pre-tax fee-related earnings margin, pre-tax net operating margin)[300](index=300&type=chunk)[305](index=305&type=chunk)[317](index=317&type=chunk)[321](index=321&type=chunk)[322](index=322&type=chunk) [1. Common Shareholders' View of Reported Net Income](index=50&type=section&id=1.%20Common%20Shareholders'%20View%20of%20Reported%20Net%20Income) - The Drivers of Earnings (DOE) analysis provides additional detail on the sources of earnings, primarily for protection and health businesses, and explains actual results compared to longer-term expectations[285](index=285&type=chunk) Q2'23 Reconciliation of Drivers of Earnings to Reported Net Income ($ millions) | Statement of Operations Item | Underlying DOE | Non-underlying adjustments | Common Shareholders' Reported DOE | | :--------------------------- | :------------- | :------------------------- | :-------------------------------- | | Net insurance service result | 794 | (36) | 758 | | Net investment result | 430 | (265) | 165 | | Fee income | - | - | - | | Asset Management | 403 | (76) | 327 | | Other fee income | 80 | 4 | 84 | | Other expenses | (516) | (10) | (526) | | Income before taxes | 1,191 | (383) | 808 | | Income tax (expense) benefit | (235) | 116 | (119) | | Total net income | 956 | (267) | 689 | | Allocated to Participating and NCI | (16) | 7 | (9) | | Dividends and Distributions | (20) | — | (20) | | **Underlying net income** | **920** | | | | **Reported net income - Common shareholders** | | **(260)** | **660** | [2. Underlying Net Income and Underlying EPS](index=52&type=section&id=2.%20Underlying%20Net%20Income%20and%20Underlying%20EPS) - Underlying net income is a non-IFRS financial measure used for management planning and employee incentive compensation, reflecting the company's core business performance and long-term earnings potential by adjusting for certain non-recurring or market-related impacts[290](index=290&type=chunk) - Key adjustments to reported net income to arrive at underlying net income include market-related impacts (net interest, non-fixed income investments), assumption changes and management actions (ACMA), and other adjustments (MFS shares, acquisition/restructuring costs, intangible asset amortization, other unusual items)[294](index=294&type=chunk) Q2'23 Underlying Net Income and EPS Reconciliation ($ millions, after-tax) | Metric | Q2'23 | Q1'23 | Q2'22 (Restated) | | :---------------------------------------- | :---- | :---- | :--------------- | | **Underlying net income** | **920** | **895** | **808** | | Market-related impacts | (220) | (64) | 118 | | Assumption changes and management actions | 7 | (5) | (22) | | Other adjustments | (47) | (20) | 26 | | **Reported net income - Common shareholders** | **660** | **806** | **930** | | **Underlying EPS (diluted) ($)** | **1.57** | **1.52** | **1.38** | | Market-related impacts ($) | (0.38) | (0.10) | 0.19 | | Assumption changes and management actions ($) | 0.01 | (0.01) | (0.04) | | Other adjustments ($) | (0.08) | (0.04) | 0.17 | | **Reported EPS (diluted) ($)** | **1.12** | **1.37** | **1.58** | [3. Additional Non-IFRS Financial Measures](index=54&type=section&id=3.%20Additional%20Non-IFRS%20Financial%20Measures) - Assets under management (AUM) indicates the size of the company's assets across asset management, wealth, and insurance, including general funds, segregated funds, and third-party AUM[300](index=300&type=chunk) - The financial leverage ratio measures balance sheet strength as the proportion of capital qualifying debt to total capital, including the contractual service margin (CSM) net of taxes[317](index=317&type=chunk) - Pre-tax net operating margin for MFS is calculated by excluding management's ownership of MFS shares and certain offsetting commission expenses to neutralize their impact on profitability[322](index=322&type=chunk) - Sales and flows measures include Asset Management gross flows, Group - Health & Protection sales, and Individual - Protection sales, with adjustments for foreign exchange translation to enhance comparability[325](index=325&type=chunk) Cash and Other Liquid Assets (As at June 30, 2023) | Asset Category | Amount ($ millions) | | :------------------------------------------------------ | :------------------ | | Cash, cash equivalents & short-term securities | 1,281 | | Debt securities | 1,370 | | Equity securities | 100 | | Sub-total | 2,751 | | Less: Loans related to acquisitions | (704) | | **Cash and other liquid assets (held at SLF Inc. and its wholly owned holding companies)** | **2,047** | [4. Reconciliations of Select Non-IFRS Financial Measures](index=58&type=section&id=4.%20Reconciliations%20of%20Select%20Non-IFRS%20Financial%20Measures) Q2'23 Pre-tax Reconciliation by Business Group ($ millions) | Business Group | Underlying net income (loss) | Market-related impacts (pre-tax) | ACMA (pre-tax) | Other adjustments (pre-tax) | Tax expense (benefit) on above items | Reported net income (loss) - Common shareholders | | :------------- | :--------------------------- | :------------------------------- | :------------- | :-------------------------- | :----------------------------------- | :----------------------------------------------- | | Asset Management | 296 | (40) | — | (29) | 21 | 248 | | Canada | 372 | (212) | (8) | (1) | 59 | 210 | | U.S. | 215 | (17) | 29 | (65) | 13 | 175 | | Asia | 150 | (30) | (10) | (7) | 19 | 122 | | Corporate | (113) | 1 | — | 13 | 4 | (95) | | **Total** | **920** | **(298)** | **11** | **(89)** | **116** | **660** | Q2'23 Pre-tax Reconciliation for Asset Management Business Unit ($ millions) | Business Unit | Underlying net income (loss) | Other adjustments (pre-tax) | Tax expense (benefit) on above items | Reported net income (loss) - Common shareholders | | :------------ | :--------------------------- | :-------------------------- | :----------------------------------- | :----------------------------------------------- | | MFS | 252 | 4 | (5) | 251 | | SLC Management | 44 | (73) | 26 | (3) | Q2'23 Pre-tax Reconciliation for U.S. Business Unit (US$ millions) | Business Unit | Underlying net income (loss) | Market-related impacts (pre-tax) | ACMA (pre-tax) | Other adjustments (pre-tax) | Tax expense (benefit) on above items | Reported net income (loss) - Common shareholders | | :------------ | :--------------------------- | :------------------------------- | :------------- | :-------------------------- | :----------------------------------- | :----------------------------------------------- | | U.S. | 160 | (10) | 23 | (49) | 9 | 133 | | MFS | 187

1 Represents the respective change across all equity markets as at March 31, 2023 and December 31, 2022. Assumes that actual equity exposures consistently and precisely track the broader equity markets. Since in actual practice equityrelated exposures differ from broad market indices (due to the impact of active management, basis risk, and other factors), realized sensitivities may differ significantly from those illustrated above. Sensitivities include the impact of re-balancing equity hedges for hedging p ...

Financial Data and Key Metrics - Net fixed income inflows were approximately $1 billion in the quarter [1] - Individual protection earnings increased by $40 million, driven by premium growth and higher investment earnings [2] - Underlying ROE for the quarter was 17.3%, trending towards the medium-term objective of 18%-plus [38] - SLF LICAT ratio was 148%, up 18 points from the prior quarter, including 12 points from the transition to IFRS 17 and 6 points of organic capital generation [26] - Reported net income for the quarter was $806 million, up 21% from the prior year [90] Business Line Performance - Individual protection sales were up year-over-year, reflecting strong demand for par products [2] - Wealth and Asset Management businesses comprise 40% to 45% of earnings, with resilient results this quarter despite global equity market declines [25] - Group and health protection businesses comprise approximately 30% of earnings, with strong premium growth and favorable experience in Q1 [55] - Sun Life Asia achieved 24% overall sales growth and over 20% insurance sales growth in 5 of its markets, including the Philippines, Hong Kong, India, and international [12] - DentaQuest had strong business growth during the quarter, with significant Medicaid and commercial business wins [37] Market Performance - In Canada, earnings were up across all business types, reflecting higher investment income and realized investment gains [2] - In the U.S., underlying net income was $176 million, up $93 million from last year, driven by premium growth and favorable experience [75] - In Asia, underlying net income was $141 million, up 4% year-over-year on a constant currency basis [28] - Hong Kong sales were up significantly due to the reopening of the border with Mainland China and new product offerings [12] Strategic Direction and Industry Competition - The company is committed to sustainability, with a goal to achieve net zero greenhouse gas emissions by 2050 [29] - Sun Life is leveraging digital capabilities and product innovation to help clients achieve lifetime financial security [54] - The company is focused on increasing access to healthcare and wellness solutions, with partnerships like AbleTo and GoodPath [34] - Sun Life is recognized for its commitment to diversity, equity, and inclusion, and was named among America's best employers for diversity [7] Management Commentary on Operating Environment and Future Outlook - The company is confident in its diversified and capital-light business mix, strong capital position, and prudent approach to risk management [73] - Sun Life remains excited about growth opportunities in Asia as markets reopen following pandemic restrictions [33] - The company expects to continue delivering strong results, with a focus on client needs, pricing, and risk management [56] Other Important Information - Sun Life completed the acquisition of a 51% interest in Advisors Asset Management and is developing alternative products for high net worth individuals [32] - The company introduced the Sun Life One Plan digital tool to over 750,000 Canadian GRS clients, with nearly 100,000 financial roadmaps created [6] - Sun Life Health Navigator powered by Pinnacle Care is providing personal care navigation services to help members access timely and quality care [71] Q&A Session Summary Question: Capital optimization and its impact on LICAT [18] - Capital optimization added 4 points to LICAT, primarily from ALM actions and reinsurance activities [143] Question: Commercial real estate market impact on fundraising [18] - BGO expects to raise a meaningful amount of money this year, despite a more difficult fundraising environment [162] Question: U.S. group side decline in dental underlying earnings [77] - The decline in dental underlying earnings was due to seasonality and higher claim amounts, with DentaQuest contributing positively [61] Question: Capital deployment priorities [160] - The priority for capital deployment remains unchanged, with a focus on dividends, organic growth, M&A, and buybacks [161] Question: CSM balance and amortization [135] - CSM amortization is expected to remain relatively stable, with growth in new business CSM in the mid to low-double digit range [124] Question: Investment activity gains and IFRS 17 impact [86] - Investment activity gains under IFRS 4 will be recognized over time through investment income under IFRS 17 [154] Question: U.S. segment ROE increase [104] - The increase in U.S. segment ROE was driven by improved margins in the stop-loss business and the integration of DentaQuest [170] Question: Commercial mortgage book exposure to office space [103] - The company has repositioned its real estate portfolio, reducing office exposure and increasing industrial exposure, with no mortgages in arrears [10]

"We started 2023 with strong results driven by our execution capabilities and growth in our health and protection businesses, highlighting the resilience of our business mix. We generated strong growth in both health and protection sales, which reinforces the importance Clients continue to place on health and financial security," said Kevin Strain, President and CEO of Sun Life. "This is Sun Life's first quarter reporting under IFRS 17 and IFRS 9. A special thank you to all of the Sun Lifers involved in the ...

Sun Life Financial, Inc. (NYSE:SLF) Q4 2022 Earnings Conference Call February 9, 2023 10:00 AM ET Company Participants Yaniv Bitton - VP, Head of IR & Capital Markets Kevin Strain - President, CEO & Director Manjit Singh - EVP & CFO Ingrid Johnson - President, Sun Life Asia Daniel Fishbein - President, Sun Life U.S. Jacques Goulet - President, Sun Life Canada Randolph Brown - CIO, SLC Management Kevin Morrissey - Chief Actuary & SVP Stephen Peacher - President, SLC Management Conference Call Participants Me ...