Sun Life Financial(SLF)2023-05-12 19:43Financial Data and Key Metrics - Net fixed income inflows were approximately 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 176 million, up 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]