Sun Life Financial Q4 Earnings Call Highlights

Core Insights - Sun Life Financial reported strong fourth-quarter results with underlying net income reaching CAD 1.1 billion, reflecting a 17% growth in underlying earnings per share compared to the previous year [3][6] - The company achieved a LICAT ratio of 157%, supported by debt issuance and organic capital generation, despite CAD 400 million in share buybacks during the quarter [3][6] Financial Performance - Asset management and wealth underlying earnings were CAD 534 million, up 10% year-over-year, driven by lower credit losses and higher fee income in Canada [1] - Group Health and Protection underlying earnings rose 16% to CAD 308 million, with individual protection underlying net income increasing 17% to CAD 362 million [1] - Reported net income was CAD 722 million, lower than underlying results due to market-related impacts [2] Business Segments - In Canada, underlying net income was CAD 417 million, up 14% year-over-year, with wealth results showing gross flows and sales up 46% [7] - Asia saw a 19% increase in underlying net income on a constant currency basis to CAD 207 million, with protection sales growing 50% year-over-year [8] - U.S. Group Health and Protection sales reached CAD 1.2 billion, up 45%, driven by record medical stop-loss sales [8] Market Dynamics - The U.S. medical stop-loss market is characterized as hardening, with an average 17% price increase on renewal business [10][12] - Medical stop-loss sales grew 58% year-over-year, with average renewal pricing up about 17% [6][8] Capital Deployment and Strategy - Management is focused on organic investment and completing buyouts at SLC Management, with a management equity plan allowing SLC managers to own up to 25% of the business [5][14] - The company generated CAD 4.2 billion in organic capital in 2025 and returned CAD 3.7 billion to shareholders through dividends and buybacks [18] Future Outlook - Share buybacks are expected to resume later in the year, contingent on market conditions, with a disciplined approach to not exceed organic capital generation [18] - The formation of Sun Life Asset Management aims to better integrate the company's insurance balance sheet, wealth businesses, and asset management capabilities [16]