Sun Life Financial(US:SLF)2023-11-14 21:19Financial 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]