Sun Life Reports Third Quarter 2023 Results
Press Release
November 13, 2023
Sun Life Financial Inc. (“SLF Inc.”), its subsidiaries and, where applicable, its joint ventures and associates are collectively referred to as “the Company”, “Sun Life”, “we”, “our”, and “us”. We manage our operations and report our financial results in five business segments: Canada, United States (“U.S.”), Asset Management, Asia, and Corporate. The information in this document is based on the unaudited interim financial results of SLF Inc. for the period ended September 30, 2023 and should be read in conjunction with the interim management’s discussion and analysis (“MD&A”) and our unaudited interim consolidated financial statements and accompanying notes (“Interim Consolidated Financial Statements”) for the period ended September 30, 2023, prepared in accordance with International Financial Reporting Standards (“IFRS”). We report certain financial information using non-IFRS financial measures. For more details, refer to the Non-IFRS Financial Measures section in this document. Additional information relating to SLF Inc. is available on www.sunlife.com under Investors – Financial results and reports, on the SEDAR+ website at www.sedarplus.ca, and on the U.S. Securities and Exchange Commission’s website at www.sec.gov. Reported net income (loss) refers to Common shareholders’ net income (loss) determined in accordance with IFRS. Unless otherwise noted, all amounts are in Canadian dollars. Amounts in this document may be impacted by rounding. On January 1, 2023 we adopted IFRS 17 Insurance Contracts (“IFRS 17”), which replaces IFRS 4 Insurance Contracts, and IFRS 9 Financial Instruments (“IFRS 9”), which replaces IAS 39 Financial Instruments: Recognition and Measurement (collectively, “the new standards”). The nature and effects of the key changes to our critical accounting policies and estimated impacts from the adoption of the new standards are summarized in section L – Changes in Accounting Policies in our MD&A for the period ended September 30, 2023 (“Q3’23 MD&A”).
TORONTO, Nov. 13, 2023 – Sun Life Financial Inc. (TSX: SLF) (NYSE: SLF) announced its results for the third quarter ended September 30, 2023.
- Underlying net income(1) of $930 million decreased $19 million or 2% from Q3’22(2); underlying ROE(1) was 17.7%.
- Wealth & asset management underlying net income(1): $457 million, up $38 million or 9%.
- Group – Health & Protection underlying net income(1): $285 million, up $4 million or 1%.
- Individual – Protection underlying net income(1): $297 million, down $8 million or 3%.
- Corporate expenses & other(1): $(109) million net loss, increase in net loss of $(53) million or 95%.
- Reported net income of $871 million increased $760 million from Q3’22(2); reported ROE(1) was 16.6%.
- Increase to common share dividend from $0.75 to $0.78 per share.
“Sun Life delivered good results and we continue to benefit from our diversified business mix with strong net income in Canada, growth in SLC Management fee-related earnings and good growth in Asia,” said Kevin Strain, President and CEO of Sun Life.
“We completed our acquisition of Dialogue, Canada’s leading virtual health and wellness provider that gives access to quality, high-touch care. In Asia, we increased our investment in Bowtie, Hong Kong’s first virtual insurer. Since the beginning of our partnership five years ago, Bowtie has grown in digital distribution, sales and increased market share. In the U.S., we’ve extended our Teledentistry.com partnership to DentaQuest, which will provide approximately 3.5 million people across 20 states access to oral and dental care. SLC Management’s strategic relationship with Scotiabank Global Wealth Management to provide private asset solutions in the Canadian market will help to meet the growing demand for alternative investments.”
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Quarterly results |
Year-to-date |
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|
Profitability |
Q3’23 |
Q3’22(2) |
2023 |
2022(2) |
|
|
Underlying net income ($ millions)(1) |
930 |
949 |
2,745 |
2,477 |
|
|
Reported net income – Common shareholders ($ millions) |
871 |
111 |
2,337 |
1,706 |
|
|
Underlying EPS ($)(1)(3) |
1.59 |
1.62 |
4.68 |
4.23 |
|
|
Reported EPS ($)(3) |
1.48 |
0.19 |
3.97 |
2.91 |
|
|
Underlying return on equity (“ROE”)(1) |
17.7 % |
19.4 % |
17.6 % |
17.1 % |
|
|
Reported ROE(1) |
16.6 % |
2.3 % |
14.9 % |
11.8 % |
|
|
Growth |
Q3’23 |
Q3’22(2) |
2023 |
2022(2) |
|
|
Wealth sales & asset management gross flows ($ millions)(1)(4) |
39,324 |
42,146 |
128,070 |
155,381 |
|
|
Group – Health & Protection sales ($ millions)(1) |
374 |
499 |
1,573 |
1,209 |
|
|
Individual – Protection sales ($ millions)(1) |
669 |
444 |
1,784 |
1,269 |
|
|
Assets under management (“AUM”) ($ billions)(1) |
1,340 |
1,269 |
1,340 |
1,269 |
|
|
New business Contractual Service Margin (“CSM”) ($ millions)(1) |
370 |
177 |
872 |
509 |
|
|
Financial Strength |
Q3’23 |
As at |
|||
|
LICAT ratios (at period end)(5) |
|||||
|
Sun Life Financial Inc. |
147 % |
142 % |
|||
|
Sun Life Assurance(6) |
138 % |
139 % |
|||
|
Financial leverage ratio (at period end)(2)(7) |
21.8 % |
23.7 % |
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(1)Represents a non-IFRS financial measure. For more details, see the Non-IFRS Financial Measures section in this document and in the Q3’23 MD&A.
(2)2022 restated results may not be fully representative of our future earnings profile, as we were not managing our asset and liability portfolios under the new standards, IFRS 17 and IFRS 9. For more details, see the heading “Note to Readers: 2022 Restated Results on Adoption of IFRS 17 and IFRS 9” in this document.
(3)All earnings per share (“EPS”) measures refer to fully diluted EPS, unless otherwise stated.
(4)Effective January 1, 2023, Canada wealth sales & asset management gross flows have been updated to exclude retained sales. Prior period amounts have been updated to reflect this change.
(5)OSFI’s 2023 LICAT Guideline, effective January 1, 2023, specifies that available capital for LICAT purposes includes the Contractual Service Margin. Prior period restatement and resubmissions are not mandated. Pro-forma January 1, 2023 LICAT ratios are disclosed to illustrate transition impact. These pro-forma calculations will not be formally submitted to OSFI. Refer to section F – Financial Strength in the Q3’23 MD&A.
(6)Sun Life Assurance Company of Canada (“Sun Life Assurance”) is SLF Inc.’s principal operating life insurance subsidiary.
(7)Effective January 1, 2023, the calculation for the financial leverage ratio was updated to include the CSM balance (net of taxes) in the denominator. The CSM (net of taxes) was $9.3 billion as at September 30, 2023 (January 1, 2023 – $8.7 billion).
Financial and Operational Highlights – Quarterly Comparison (Q3’23 vs. Q3’22)
IBF4
