SLF - Earnings call transcript Q3 2021 | Sun Life Financial Inc.

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Operator

Good morning, everyone. My name is Suzanne, and I will be your conference operator today. At this time, I would like to welcome everyone to the Sun Life Financial Q3 2021 Financial Results Conference Call. [Operator Instructions] The host of the call is Yaniv Bitton, Vice President, Head of Investor Relations and Capital Markets. Please go ahead, Mr. Bitton.

Yaniv Bitton

good the Welcome third and earnings Sun Suzanne, for call quarter you, morning, to everyone. Life's Thank of XXXX.

and Investor our release available earnings the today's for Our call on the at Relations website of section sunlife.com. slides are

an Chief We on impact Executive of third Officer. our overview Kevin by update quarter will an call results and Strain, client today's our begin with strategy President and

After Financial the remarks, Other Following also remarks, of for Executive Officer, Chief will your answer Singh, and results portion present available this Manjit be move Kevin's the members will morning. President quarter. prepared we question-and-answer will to financial the Vice to questions of the management call. the

forward-looking X. attention measures, language Turning financial the today's to which form your draw part I Slide and statements of non-IFRS use to of remarks. cautionary regarding the

in by inaccurate turn As be forward-looking I'll subsequent over events. slides, to noted may now with Kevin. that, things statements rendered the And

Kevin Strain

morning, Thank you, good and Yaniv, everybody.

my start on reflect on on our Turning to and professed our our on to purpose, taken opportunity Slide our sharing executive the builds the client becoming and which We I strengths, X. our to clients, strategy, our have team and priorities I'd by Since CEO, our our strategy. with thoughts outcomes. focus a strategy like our discuss on impact foundation. strong

on deploying and building in scale our both capabilities the leveraging that or capabilities, stakeholders. leadership, We've and is built thinking on course digital and that strategy asset strategic client We've strategic digital strength impacts. a at foundation acting has company, M&A emphasis XX a management been value health growth U.S. insurance, past and prioritized into has the our Asia. exceptional to Life in areas, and capital Canada, Over our Sun years, and sustainability delivered on X on and this of added like

central driven and both strong management, to of of strategy to lifetime tremendous lives with help Canada, net and and, financial to by ability have asset achieve half the X-pillar and macro have success foundations, up and model live management growth our and our by trusted asset are Asia, Today, will do. us a who have we being purpose by underlying made most served a management, importantly, where people insurance U.S. to opportunities business future and we with balanced asset well fuel healthier income to supported we right culture supported be trends Our brand. our nearly what the with and clients security continue

of retirement Our clients strategy whether provide the and our plan save clients at health or for center keeps helping their for their families. security everything navigate financial we do, concerns,

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-- management our be that through be third with our told and and investors excelling them. to in that purpose-driven. important strong to sustainability we're financial prudent that clients, our we company, sustainability and believe adviser a combined to to That's areas continuing plan We sustainably that us measures be have to clients financial of health, and purpose, includes Sun employees, channel, sustainable innovative why capital is or discipline plan must approach investing, to benefit whether know driven aligned communities. channels best: benefit to directly management. And Our our investors financial Life new distribution, to in all performance, risk truly have success, security our supported a parties emphasize it we've the our

with Our supports refreshed have to emerging one of our strategy areas brings to the success been world. asset of ambition and our and increasing companies the elements importance together be management that the core best in insurance

DentaQuest acquire low is strategy existing all our to business, on great health with benefits will We grow X. our advances and outcomes leading our and we Slide financial And United capital-light we've States Group business and in The our U.S. Turning improving bringing our U.S. to our intention risk medium-term dental sustainability with support approximately tail October, focusing to million some announced strategy, members. life. provider right made all. strategy progress like on offerings, the is Benefits In wellness acquisition for a to objectives. XX DentaQuest, repriceable

will zero social sustainability and imperative This I greenhouse As emissions by for to to an appoint design MFS, their to and for build InfraRed and SLGI, to by as long-term commitments our first XXXX. asset our BGO, who includes mentioned Asset our this Managers portfolios Yesterday, lead Officer, performance earlier, initiative Sun pleased by gas Alanna Life, our and was plan commitments operations achieve She the quarter, greater XXXX net owner is all Life. Boyd, for environmental reporting on directly Zero Sustainability I made sustainability to me. achieve Sun Chief net for announced Net have we goal zero joined and manager.

complements and need financial in deliver coverage to our in our and We'll a with coach, insurance partnership quarter, all tool needs. This on meaningful plan. proactively to year. model, in rollout service the capability leadership. a across We tool million digital past to with a In business Canadians $XXX this with respond nearly impacts, million to evolving focus clients' holistic started continue client wealth we transform of financial this Conquest continues digital to sold wealth financial This to digital enabling Planning. Canada a have planning Ella, our nudges, insurance leading be all Canada, deposits broad introducing $XXX platforms, advice in digital addressing for us

our Navigator quarter, to by for treatment leading Pinnacle their year, U.S. last completed complex the supported members XX the Care Care and system, we experiences. This in were guiding approach points through digitally first health year. of launched the increase health doctors they to of the in and XX% percentage quarters ensure offers new get the adoption. in better the seen diagnosis, the of helping significant up X stop-loss right concierge in Health care over solution During portfolio. a conditions, we've submitted a outcomes Asia, Pinnacle to acquisition business applications and digital In U.S.

we on equity I X. our pleased XX% previous return objective plus XX%. to XX% announce the that are Turning of increasing to am objective Slide to medium-term to from

XX% in to to and Over away diversify our the our capital-light in from and update intense duration mix. businesses. right drive interest-sensitive objective. approximately management, of shift made decade, mix underlying now moves underlying our for shift, business strong businesses, makes group past asset our we've addition our this This time shorter coupled the with Wealth capital insurance record ROE to strategy significant earnings and execution, track

our third a X. the Turning quarter of strength delivered underscores We business diversified that strong mix. to Slide

around are we the lot a of with the pandemic While a feeling world. vaccines, of we're still impact the progress rollout wide-scale seeing of

net time life needed for to date, capital million our and quarter last more COVID-XX Sun and an Sun healthier impacts wealth Asia when in driven of was of over and advisers results benefits and it life helping earnings achieve than a and mortality commitment their over continue underlying our we reflecting purpose pillars. We Life Our net live reported the and confidence our at efforts quarter and To most. To the employees their as and there Life, $XXX million position. of it just to clients and sum strong to strong on clients pandemic. XX.X% to asset also In in in employees has lives. health COVID-XX-related insurance and and in income the offset U.S. they and partially have continued accomplishments families primarily management, $XXX return up, increased be our quarter, security Underlying by the year. advisers $X for delivered maintained the equity a and clients morbidity from our generated it strong up share to third X% per increased income billion, by throughout

update Before the financial turn Sun joining to With I call our She'll executive great were of us to now recent Ingrid through to team leadership. President and touch on Manjit, is Life. addition results. I that in QX. join the the over take turn the to excited our call will team pleased a Last will call week, be we will that, a Johnson, new on who Asia. Ingrid executive of Manjit, the We're I'd like appointment Sun Life our announce to

Manjit Singh

an from net everyone. quarter and reflecting Sun and experience unfavorable growth, overview by impact over equity billion Slide Underlying net $X.XX This income. you, resulted by year our income. reflecting of of income the unfavorable of partially good in earnings, X-pillar by was $XXX good experience was $XX morbidity earnings. Asia. and quarterly Kevin, provides and our Thank was favorable delivered earnings driven higher the resilience up gains business per and X% morning, business million growth business movements third the XX% strategy. of XX.X%, prior Reported mortality on our lower income investment mix. were and results. capital record driven of million X and U.S. Underlying strong higher COVID-related market-related strength and share $X Currency both in just tax-exempt underlying net up a and underlying to return year-over-year offset credit Life

growth SLC ended reflecting inflows Assets almost another trillion, management. value net strong $X.X quarter quarter at the and under of management at market

and increased Canada year. $XX year-over-year. growth over Our wealth per Book businesses X% AUM delivered increased billion value share in also strong the Asia as prior

and per income, was impacts share XX%. up comprehensive value book Excluding other

percentage Canada the group trailing and with investments financial due reflecting margin Upon Employee Our shareholder by market XX and outlines This net Cash stop-loss wealth approximately prior update in intend of was and The year net credit claims the redemptions the the preferred LICAT age a X% leverage income U.S. accounts for ACMA as at to in the Benefits decline net SLF remains business This primarily contributions XX.X%. favorable the charges. of claims $XXX also years. million mortality XXX% between ratio basis, X.X% The by redeem Benefits. additional in population. of million participating management to offset end will primarily points line of benefits at shares the experience USD XXX% holdco was income million, in million, an in-force million, by million allocations at over significant experience experience. management. we approval, U.S. of target XX the XX announced at at at an leverage SLF points. a will and net had was the profit year, estate an business point, working in reported reflected strong favorable achieved the by driven redemption, expense XX% driven largely by Underlying gains real morbidity in decrease percentage prior Slide lower morbidity and to in favorable the experience, increase our $XX Group basis mostly SLF's by decreased approximately businesses offset performance prior from reported groups. Subject above ratio income $XXX on strong policyholder basis last elevated our fourth of balance of and approximately of case ended the prior and was X plus. X were LICAT quarter. with SLA. counts offset year, million from by mortality million and $XXX billion, $XXX of and preferred or the after-tax ratio in quarter an sheet The $XXX morbidity increase Underlying in by XX-month we quarter. line driven regulatory financial to partially by $XXX strong, quarter COVID-XX-related higher $X.X declined income share prior position from with ratio

prior MFS investments, AUM $XXX over of and by Underlying foreign ended net ACMA partially prior were offset result million was impact the net $XX income partially unfavorable loss was $X the larger for Asia, on million wealth was while impacts. recoveries margin offset Management. India income driven from an On in X/X was currency Management of fee-based both the up income headwinds growth results higher the up net basis, with net year, higher up variable COVID-XX mortality elevated to assets, of $XXX net net MFS of businesses of driven SLC by higher XX%. by translation. and a offset income $XXX credit $X insurance, of expenses $XX related driven year, experience, across of gains a nearly and million line improved given project driven costs. -- This of higher million, seed year, includes from in million year, and reported $XX underlying good with quarter currency from Asia, loss million by quarter income, million, net million market-related by from seeing compensation X%, million, translation. down Corporate's the the increase underlying Management by of SLC million largely management currency by million $XXX good spend. strong million our operating favorable offset of in $XX partially average year-over-year. prior generated MFS region, underlying by with asset earnings profit. which offset a underlying constant Indonesia, driven impact by and the tax expected compensation partially In by was Philippines reported in net account Asset million currency approximately $XX net by the movement. pretax the of and $XX prior $XX in higher net income claims reported million, impacts, higher This $XX driven and

earnings. overview Expected Slide was up XX. of of sources an provide to year. from We XX% profit our prior the Turning

Excluding top up Canada the U.S. higher impact income was driven profit and businesses expected asset loss. X% wealth in currency, fee as well management Asia of growth by and in as

mortality real million results. New incentive the driven and business partially consistent primarily million gains gains higher prior Earnings by $XX strong driven of properties. U.S. by with and was This values Asia million offset year-to-date the estate strong compensation impacts, Experience including by surplus driven year as market-related were driven increased gains. AFS million prior in $X the as COVID-XX-related higher $XXX experience by well year. fair and from $XXX were gains investment on by of impacts of

reflecting completed as partially were to actions, updates investment-related morbidity enhancements. behavior we individual of sales an credit ultimate assumption annual During review assumption our management and and ultimate pretax as of updates. favorable insurance predominantly up in-force Investment-related assumption updates in XX model included sales new constant a $XX the in mortality and X%. XX%, QX, experience, lapse resulted resulting review U.S. in whole gain expense policyholder currency to and which wealth million. Canadian $XX Individual insurance The and as a were a to after-tax of on shift margins well included reinvestment by Slide well basis. participating insurance sales shows spreads, changes net loss were other sales. higher life rate million. down These updates offset management as

declined XX% and Local a in in of as hubs. market XX% individual currency sales higher in insurance in by individual driven result Asia in Vietnam. sales Asia's sales lower by increased international Asia Philippines, the currency India constant constant

the Group at broader clients While and across solutions Benefits the third meet our new advisers engage quarter Canada region that broadly to shutdowns pickup forge capabilities Asia, with COVID-related their were movement needs. ahead, the prior saw Southeast and line saw as and tools with our billion, enabled continue coming sale in in in last digital by large a compared a provide asset to restrictions sales year strong $X.X the excluding were In constant were U.S. sales in Benefits XX%, management down Wealth currency. down year. year. increased large X% stop-loss to in a Employee reflecting case market, but Canada, solid defined year-over-year sales the sales contribution prior to results and while sales sales,

market the wealth Hong We business Asia, mutual continue driven constant sales. India, increased Kong. wealth XX% to in fund see pension sales an the individual mutual money in in by increase in sales in and In currency by Philippines fund sales

outflows, had billion, inflow offset net MFS flat growth asset billion increases by in net Canada strong gross were quarter year, XXth benefit MFS. the in by reflecting the in in our generated driven $X.X Asset Management institutional diversified in inflows ended new the in of X.X USD management. consecutive SLC in largely strong third Value by of and MFS. the SLC with Asia. of margins partially million, Management constant at flows higher sales was to net outflows, currency compared strategy flows offset business $XXX the retail reflecting year-over-year in of showcasing lower quarter quarter prior up XX% Management,

the expenses highlights Asset prior and business distribution revenue again incentive strong were primarily XX. XX% This costs our this by up reflecting driven Operating sales of businesses, to year. and higher our diversified quarter from Management strength compensation Slide the in once growth. conclude, Turning was To Wealth mix.

businesses suite and performance COVID-XX Management benefits as despite our Asset continue Our maintained market strong seeing investments the momentum, digital local investment of our from In in Asia, to benefit we're capabilities. sales demand from for restrictions. good broad

strength of our to portfolio back Our the With continued at the position its for including businesses of XX% and that, medium-term well objective our the that business leverage Group the DentaQuest of diversified platform, to to of positions growth. for build to and call deliver us this earlier U.S. to quarter. strong turn supports in business growth acquisition believe underlying We the Wealth Yaniv Canadian a Management I'll the business plus. health leadership ROE continues leading continues announcement And Q&A. increase

Yaniv Bitton

to I [Operator Manjit. you, pool now ask the participants. will Suzanne Instructions] Thank

Operator

[Operator Bank. question of Grauman line Meny from comes Your the first Instructions] Scotia from

Meny Grauman

target. on Just the ROE a question new

to of hasn't now. end exceptions, high But your it rare above for the above XX%. tracking been of has previous XX% time with been ROE some underlying XX% Your range

a it, even see chose on you've point I guess, XX% kind do why step-up there to what And a putting you wondering just to get what done? that you ROE, plus. of finer going that's I'm So relative in you to

Manjit Singh

Meny, it's Manjit.

for thank So you your question.

As the and well ROE we've have add quite of mentioned, we've on portfolio strong to businesses. continued to above some XX%, we performing been for time, our

our us seen all acquisition and, along capabilities growth and our asset all add pillars. you've So recently, with in our businesses SLC with alternative of of DentaQuest, in continued management, more of then existing

of what of So and medium-term look is for that, kind we target, our supports if view and to continue that's plus. see further XX% a we opportunities this growth, at the

Meny Grauman

be Manjit, there I Would target, medium-term would get but reasonable? in you XXXX? that be the that your could appreciate expectations

Manjit Singh

I really Meny. sort think we of don't year outlooks, comment on one

there's think I -- good is But over year. again, will and achievable a the it's that the environment on goal what medium term. depend really we next think

Operator

Next from Bank from of Gabriel line question the National comes Dechaine Financial.

Gabriel Dechaine

About the the I in towards sounds and it more in skewed businesses Canada Group the items guess, experience U.S. the U.S.,

bit the to indication see benefit higher guess, COVID-XX, of, a issues directly want group and confirmation that we’re and mortality, not like, that’s to short-term utilization eat margins. Just group starting your I are into these disability to tied an that starting

Dan Fishbein

Gabriel, I Fishbein. mortality the that start business on morbidity and in for confirm I’ll we would U.S. are out that saw quarter this Dan related. results question the it’s Yes. Yes, COVID the Group

vaccinated, with the more population than is age rates working of fully variant is over U.S. only now fully for interacted is age of in in that and quarter age but and about quarter vaccinated. third The the worst vaccination Delta working XX% U.S. since mortality pandemic the XX% the XX the that population was population began, the the to The how related the in some

population. population quarter. have So for the working time, we age big saw it in of had age in age the it was, particularly working XXX,XXX those been even vaccinations, were reports during into much Delta about third those mortality a who population. the first than would the the third working the deaths the in CDC been variant shift are but in in deaths not worse XX% more than And Obviously, the for vulnerable. The U.S. unvaccinated quarter, were

rate that in So deaths to the highest of that population. led

About businesses. $XX So in in after is to million that disability. half we the of About Group is mortality. half had that morbidity as of Manjit that tax COVID mortality and our own noted, was results, related of

noted, have other COVID are there Group disability, out that time of really reason. no for of and that you signs mortality most there be As with people issues are that the for And morbidity beyond short-term often to that business. in work some

Gabriel Dechaine

Sure.

previous a is that Or But And can indication tell I you question. sorry, rehashing, that answer is that expect there XX gave, is and I -- a an apologize is in earn there? I to that IFRS the missed this am. return if me that the XX%-plus, the to if just you catch you ROE world? the target that

Manjit Singh

it’s Gabriel, Manjit.

the as very that including you interest strong addition were update added But providing and IFRS tell are So we’ve SLC the we’ll think of DentaQuest, And closer before, lower this very guidelines fundamentals, time, growth. that light high and get they mentioned built. which have of businesses good flows. capital can an priceable They the the have opportunities as they term, also time we’re for to short of the and provide businesses generate pleased of you At cash diversity we’ve stable know, the then with rate finalized. over a future and not is to with strength we’ve as what updates. adoption I we’re We sensitivity.

the So overall, over good the about medium businesses very these of term. ability returns we good feel to generate

Gabriel Dechaine

if I seems accounting an All from right. It year odd that of may odd now said. that change, because changing just it number as we’re a be

Kevin Strain

about results look to the than to IFRS in more within XX% to sitting We’ve and basis. odd it XX% an I leave it at it on about seemed out Kevin. did there think actually it Gabriel, of to – it’s how and me X we would excess address think XX%, well XX% think to

Operator

question the Young Desjardins line comes Capital of next from Doug from Our Markets.

Doug Young

I’m I Are Or of the I’m in quarter. to it may lapse of color to I mean, the was back and have a across discussion, charge you the the making you’ve and that. built that seeing, million on bit the revert get just Just issue a assuming you’re reserve. Just pandemic. what curious will occurred you more current the lapse pre-pandemic rates $XXX rates be level? during for hoping guess, consistent? a as industry, first, more I not the an are continues curious, ACMA items that lapse unusual that that But to know yourself stay to how assumption to little that there’s

Kevin Morrissey

for Thanks This question. Yes. the Morrissey. is Kevin

as this for life policyholder the it of assumptions in and to the in-force really management year you review the recent assumptions a key business. So noted, behavior has valuation The ACMA, was strengthening, block all U.S. focus with universal align funding on better experience. the

we made recent the fully we’ve So several had last experience’s quarter over the changes addressed this losses that quarters. the

assumptions and policyholder euro QX did we analysis behavior. experienced of the for that And news, we and the supported the a for the lot updated U.S. So our good to quarter ensure saw environment. ongoing lapse backcasting

So to policyholder will conditions. and dynamic, be looking forward, the behavior market it is sensitive dynamic

we’ve we made continue how unfold experience the changes it about feel forward. with but monitor comfortable we’ll and we So good expect closely, looking to

Doug Young

experience I up confirm, mean, the end end you’ve XXXX to of up in. So baked to to just that or that’s the QX of

Kevin Morrissey

we of would well. experience at That looked up trend until the end into as year, this the been have last year but also

reflects So say to prior experience quarter. back full would the really I this it going

Doug Young

on sales on and just side on created Asia, side. some second then And Okay. one mortality the COVID challenges, the obviously,

off? in And to front as type get rebound starts you what a an in to update of of Just see anticipate take far reopening hoping So would any as be to you’re to little Asia seeing would helpful. QX. bit updates that on maybe what so

Kevin Strain

on impacts claims And a Doug, sales right, it's COVID during of both Asia. we experience and the experience certainly a side. saw the quarter Kevin you're from

Vietnam, had are across our seeing continue a will that impacts. was widespread But bit in Canadian opening back whether rates What the in countries the economies tell early those in up and because It's them we lot fought markets, up. is sales in had sort but like had currency we Delta ASEAN has our just up to variant through Although of the to up we the would example in, variant and spread. little I XX% quite that lockdown country and was up we low The saw because seeing in U.S., have we're local right? the the were Vietnam, had economies been seeing we're back. that but impactful, they a going the to an local to Delta in essence lockdowns, dollars. was vaccine very we're which XX% mean, Philippines open and give right, there vaccine be more. You of are expected started rates,

so into and this started have to back. weren't people vaccine. the first gone That's only and significantly, bancassurance many buying got they products. And should going up weren't now Vaccine people bank, rates quarter, have their reopen some we see flows come although

that's in so market example, an And just each and is of rate. playing out its own sort

rates. COVID say has vaccine the happen is and are more to what But because it paths have that we been up, economies taken early seeing seeing start So we back are unexpected. will

Doug Young

a way of kind how be of would of of about Asia Is gradual happens. think finish just what talked reopening peers through a your And we impact gradual XXXX, of thinking maybe, of that of you essentially? the as should of I as to kind more off Kevin, guess, we should with, one think -- of kind over more --

Kevin Strain

and focused They’ve do kind really they’re China, at movement been I think perspective. a open though, market, opening quite border. closed Kong it’s you look from the down. China, up of Like of different Inside quite Hong if Yes. Kong, by that flows on China-Hong it’s right?

the to on travel. are going primarily a be to be fully I little open high up. bit up. for again, expect to sales through So and – take still that of right, really businesses But is country think, do a which – is and watch, gradual. thing And the I net will every to is economy travel I the There’s higher Hong going rely before to a rates different. opening the do vaccine Kong, is made to And our you’re then open think that they’re while vaccine much worth, like rates where have Singapore be

Operator

of Next question from David comes the Motemaden ISI. from Evercore line

David Motemaden

my the around capital-light question I the businesses XXXX driven Because few at shift in cleaner mix ROE first than are is How much the ROEs, were in ROE. XX% XX%, of capital? to the which to continued ROEs require I just on mix a – around in capital-light versus Canada look years, if ROE, Asia. segments that last a the businesses shift and that XX% U.S. had by the and improving XXXX, XX%

you’re target. how wondering just XX% thinking So that the about getting to source of

Manjit Singh

we’re I I looking I one think those those how it’s of we have think will businesses. businesses businesses, for mean, look of And at businesses perform of see forward. growth each as we the across David, that Manjit. all and we those across looking now portfolio opportunities

In strong for we those of integrated platforms. lots and of leverage more businesses the work various addition, kind built capabilities together to see opportunities we’ve across

all you the together, So is that feel when we put achievable. XX%-plus that very ROE

David Motemaden

AUM. a switching outflows the quarters. positive just – to I a absolute in for terms of about maybe well guess, retail there, I XX then have as as think, understand beginning been straight was gears falling But MFS. the I flows to the driving what And wanted the of bit I Okay. it just overall. just of percentage period was talk – dollars they’re

have weaker of I sort I it looks it, looks redemptions I what guess, And like would have when actually are So it sales look expected. control. through under than been, the like

about, so sales weak? and guess, talk the I why So could on outlook been had just you sales

Mike Roberge

side over The Mike entire themes the of block this last the virtually equity Appreciate first be in with talked we’ve the actually business. institutional same that question. on is the quarters would couple of Roberge. booked David, institutional the about

all-time trades we highs, that market derisking rebalancing continue the as activity to book. and – at continue activity see in We

driving what’s institutional flows. that’s So the

think side, On a you you retail sales. see it reduction at if I the look in year-over-year,

line what XXXX. with speaks look the last think increase that of call rate we that. equities, our now active year funds out down massive for and come I – allocation it’s and probably sales the a back we When was an and industry our sales sales in had And rate mutual well to to positioned industry. in relative such much come has the at have again, was were industry, you down, out of sales

our sales going industry. So we’re there’s what than seeing nothing the on that’s any different in in

thing hesitancy market to and retail we’re to continue net that allocate allocations same there’s highs makes the in our seeing think in all-time I equities, to books. new as –

of same the we’ve about that last couple it’s So over the talked themes quarters.

David Motemaden

the Got driving it. half your the you a quartile over metrics And is business. my I’m in bit percentage fallen what’s that is in peers X-year versus understanding because the more maybe have the that the it performance quarters. looks But top numbers several to of AUM last provide, the new top compared really interested that’s your like

categories. So changed I’m half percentage the top the wondering if in of the that’s that a to as magnitude has similar

Mike Roberge

Well, say the year was it would I to a I I performance, we’ve think things. – definitely the strong, and had well, top to we’ve the unsustainably in last think strong years, at your all come speaks as backdrop go seen – over the couple outperforming were back, over of and What of seen percentage market. quartile pretty or very top very, quartile. the if a down is a virtually last market we’ve is few you environment the and the certainly large products One

is in gone market and high style generally reasonable the ROEs of And investment Our seen lot at higher market a valuations. of businesses trading with speculative outperform. parts quality investing up, has the we’ve

our they surprised when relative any is understand more And flows. our haven’t impact what investment that that put market process, have so well on challenged. the seen relative performance we’re by We clients understand we on done. are decline in market And given performance slight in what the environments we’ll platforms they think that their not perform the us has because

Operator

comes Tom from MacKinnon the question from Capital. BMO of line Next

Tom MacKinnon

buybacks question A and a dividend, then share on follow-up.

running we at So with terms of dividends been objective. increase. – quarter of that’s It’d you assuming last and ‘XX of we I been had north given be of light respect like the your an – here EPS green share get underlying sort XX% certainly later in be over buybacks, looking X to afternoon and would growth since on this X% fourth the a you’ve end years top assume increase,

that, at share like were prior the back if XX% thinking well about because does increase your and how into you’re that given active to of while even And restrictions the buying than just you running in stock ratio? fact talk higher payout – target you can buybacks does potentially lower translate you’re least an perhaps that given a as OSFI as well. So

Kevin Strain

Tom, dividend, our that's of it's if earnings past XX% we've out underlying the our take would for to got about to and that Kevin. this, you look, XX% in be. I'm going Manjit that, guidance and objective jump the talked our may there But in. what of we've

be into we're approved dividend to Of we that. I'm going for course, target, Board, what XX% and advance. OSFI to back in about the by be to XX% right? that talk not our allow needs So to need our would getting do But to going

into have at buyback, it's and we our when as dividend towards -- We when the the the generating, first changed, growth, right? deploy -- capital then organic M&A On in hasn't A use we into And don't we buyback program. we position for our we're the enough our when there. capital objective pipeline look the the pipeline M& can M&A

growth And so going what's M&A on, in it the happening, what's pipeline, specific be to our what's the timing objectives. of in what's organic would very

that's things we look So capital we that all how and deployment. at when think we those about make decision,

Tom MacKinnon

and then for about quarter, as Okay. be have the And that fact here, anticipated stop-loss we as been you result the quarter Maybe can just especially you and benefits. are as the for What to would for seeing outlook experience as a busy COVID? been pricing question pricing Dan. environment? seems hasn't that the into given move a talk good So the of fourth employee

Dan Fishbein

because It's Dan. to quarter. and are, most couple is quarter sales a the course, past has about This the a we're the XX% into the marketplace that of competitive right third Tom. seeing not a We're a that Thanks, years. isn't been of actually it time remind great of actually good now, is probably quarter sales sales what than heading the our But big Only third in happen in Yes. has question It's quarter. it's quarter. somewhat over we of competitive more activity. our

selling we're wide a margin very the stop-loss by industry leading in high at So levels. We're sales. still

sticking Our to is our sales which pricing Group are but are up our target. year-to-date business, in great, we

trade-offs, somewhat it to will be of a to to So margins. bit and level the And seeing have volume if competition heightened a our we moment. targets at of sacrifice little make are we maintain our pricing

Operator

the comes from question from Paul Holden of CIBC. Next line

Paul Holden

for part quarter the estimate a changes in I ACMA your of reduction estate real assumptions. So that this noticed best were just

uncertainty, particularly So to just real SLC and at if wondering demand demand continued those real if products. commercial you’re is impacting back run returns in you can the seeing tie – estate at And that estate, the you I guess, what funds and all there. of

Kevin Morrissey

was address you the the experience going ACMA, and just to maybe I Steve, talk let about then in the I’ll quarter.

just We cycle. It’s So term through Paul, It’s assumption. strengthen look we long assumption, the comment. very the that And want maybe real to fact the do right? long-term I of always a did estate that specify is kind at. a

interest as rates performance types classes. well we levels past So and as at expectations, asset look premium these of future risk for of

quarter the in to fact did had the the the change quarter. estate positive we in we make estimate, the in best reduce experience real that really So despite an assumption

I’ll talk real estate the about Steve, to maybe, quarter. So you the for over hand it to

Stephen Peacher

Yes. Thanks, strong. have And as that been as office other industrial, certain which such retail but been cold certainly, storage, were extremely the weaker, have sectors, – Paul, were Kevin. through in sectors subsectors pandemic, such there there

If across like funds there BTO, the overweight been you have that. look sectors BentallGreenOak,

U.S., if in Europe fund has actually, Asia, of variety you funds also look quite of the in the So been at kind and North performance America, strong. Canada, a

Their delivered XX% funds best one the quarterly over have fund their fact, In had. recently U.S. net. of core returns had returns Asia it’s ever

year attracting new and active – had capital. of terms a they’ve in So very

– I to back it of part So would ACMA I’m to and charges. trying the connect attribute maybe that,

estate, return. buys on at for value-add about in a making their core-plus – properties a lot of of general terms you then the and If value selling less then those to some real and and total look a in BentallGreenOak estate real money ways, side, them more is in it’s, or about SLC lot improvements where

interest on what So in I the we continued we’re strong. say be would pretty feel and like, seeing investors, estate, have returns that to the persist real our to based from continues

Paul Holden

related my I and legacy of time is to lapse That’s lapse lapse products then additional just product seen back less assumption question want that verify on discussion. dependent these great. sort one on just relates sold to I is to that really changes assumptions, And being the have correct that that part? we’ve over newer have

Kevin Morrissey

because we’ve as in years well few experience that’s seeing, have business that seen that’s so It’s right. been – closed It’s lapse the all Paul, we’re the strengthening that’s more – block. been new as last not related the legacy over right. to the

Operator

Darko Next question comes Mihelic RBC from of Capital Markets. the from line

Darko Mihelic

just all large before. we to I I we on a expense for I money is that of from I reason typically, risk. the why I little par it really you allocation ask ultimate allocation realize seed bit the that ask small, know pulled just but you of the that. – guess any sort has – think is, color of and the And wanted investment par But through is passed out and

in an this allocation continue now a affect now only risk us future the bigger possible time this small, of that prospect touch the that from you And asymmetric that, of I’m forward lot thing as you? effect this that the affect though so which on of, I maybe only on, like understand, sort like won’t of assure could will sort just you goes make And reallocations sell, on. to company happen sort is can the par really is Can policies, just future? an happen this of going wondering, that potentially to in

Kevin Morrissey

Darko, for that this is question. Thanks Kevin.

in risk This seen between to a not of a adjustment. and the period allocation past. what and the onetime was it pre-XXXX was policy And income of refinement we’ve cost of a this the shareholders. expenses with really investment par par associated So was par prior

a current half resulted those benefit across allocations, to in and to ago. in accrued income the the just So part interest the of It’s adjustments allocation back back complicated, it’s quarter quarter. quarter cost interaction the mutualization million. adjustment the accounts. that changes X – of and to the this allocate XXXX, prior in to need quite costs, of happened to structure demutualization period And And some $XX par adjustments different the the result and the structure. and and to so expenses to time count accounting was with the and XXXX related half shareholders About bring this like was the between agreement this of that the investment account XXXX

of to pass-through impact earnings, this not it is isn’t really to features the likely no and that’s future we’re say And there. par and at all profile products products related the of to is the again. I’d there occur something So the that selling

Operator

Nigel question D'Souza Veritas comes Investment. line of from from the Next

Nigel D'Souza

your versus in mortality least in general color continuing whether experience you're persist trends first related was or The not and Indonesia, seeing population the the on to COVID-XX short the your mortality expect in for wondering at -- to I on you population think had more unfavorable experience question to Asia, that you I insured follow-up term. was mortality if highlighted could I unfavorable provide adverse and and the a Philippines India. you

Kevin Strain

variant It’s the the was about Delta Yes. rates the death heavy earlier rates in prevalent. Kevin, we We saw vaccine where COVID were where lower countries that Nigel. talked more and

be mortality the most. looking masking across Asia. in improvement They right, is the to markets, needed time countries, to and the and those up. for really at rates. what’s help. It’s that’s when social India What going had going us proud rates distancing and a rates vaccination we’re Vaccine rates continue Indonesia, in there you’re see vaccination were those particular, and in we to certainly higher for clients a difficult and Philippines our So they

in line roughly I think experience in were the be would country. with seeing what you our

were and India, the seeing rates in You higher Philippines. mortality Indonesia in in

earlier, fact perspective say, difficult rates really are happen to that going a today. what’s from I So that’s vaccine variants. the we the to – answered not as And it’s at that is with new claims they’re

the it’s getting vaccine people and wanting being to of issue issue of available. idea vaccine, this the higher, not an not So of rates get vaccination an it’s

So that availability is an important step to happen. see

but into more countries. we – ways watching So we’re around to get is vaccine watch closely, it’s it the something finding really

employees In get jurisdictions. fact, many those we’re in our of helping vaccines

Nigel D’Souza

helpful. of That’s exposure outside risks way does the Asia. you at sits longevity change look in Asia? insurance your mean, it I your And

equitable you you for more way at you’re as tunnel look risk the the out it vaccination vaccine the of more distribution area? light are that mortality-related insurance looking risk? So so kind is changing towards program the of a managing Or rolling end at through

Kevin Strain

Yes.

of purpose our curbing longer the markets. look just and commitment changing a Asia variants not the change, vaccine this but are rates in we can really and term, other if that's seeing to places, it's and see in so -- little think of you to bit quarter. amount going I those I'm up death even is types you going things, things end of certainly to like can getting help. change our those of And

Nigel D'Souza

And you question does growth even if have rising business rate we more you Are mix? look of your rates it a your And is, Could supportive if you a change side? or to have a you in is ask that have management if insurance on think environment? do that could to financial and that's about low-rate does perhaps the have for conditions, at Or on the you interest market broader a leading So Or rising rate higher low environment and preference expectations. I your elaborate? you business? asset mix? a the preference rate environment, I a that a expecting environment rate inflation your way business persistently interest end impact reason higher

Kevin Strain

I rates And matching risk how going good interest got and to might our a very go. not Randy try and talk We we’re at – you’ve cash let and do on about good about our disclosure. predict We our start to are look inflation. job thinking a flows. sensitivities management where

for That’s benefited obviously worked they – our in really from MFS But interest basis. that rates. rise has rates for as that. to now. has a the a on we’ve aren’t helpful higher a interest sustainable adding geared SLC environment thing on We’ve a bad equity front. long market towards been results rate that also interest lower industry time rising businesses low have So a a relation insurance

we So that fact on well quite business, different way we’re the business, mix about think to our and the feel positioned of and Randy do could diversity. inflation that. risk supported lower talk of maybe our we’re the we But seeing by economic that’s capital, we diversity the positioned. like how we’re views The we’re management, our conditions,

Randy Brown

This Randy, is Nigel. Happy Sure. to.

less now the think that portray. banks to had we’ve transitory inflation, on trying several we for central years will be are that inflation than So view

around side think, I seeing And to the measured banks inflation several both supply we’re that system. into coming think are months, So view. transitory, years the in central demand and more creeping than that and is we

heard Investor in So income that, available well negative at to inflationary but in to on as rate a return Day a us what done given environment. the you is and which do and, nominal high-quality have estate, particular, real from our we a fixed real income, moderately noted, portfolio nonfixed in moderate will shift

side away from but inflation to on So we that we worried the are don’t by to a do deflationary err going any see little bit higher inflation move edge means, think longer so central of that letting be being for banks they’re run about. away

you. thank So

Operator

Securities. of Lemar from line comes question from Next Persaud the Cormark

Lemar Persaud

it’s wondering in versus COVID how vaccination recovery in some with should discussion to Is of about there’s of U.S. same trajectory from in earnings the It availability Asia. like going Asia? the thinking you’re I’m a if faster the Or the gradual more that the on already suggesting So the we recovery be sounds recovery going suggests just U.S.? simple in Asia. be a be to there’s U.S.

Dan Fishbein

This is thanks. Dan. Well,

the for portion. that take me U.S. Let

surge it’s think results, in them. our the And us for I and the XX claims to for those U.S. at on variant days to about important statistics takes get or XX. September submit the about Delta to peaked in look in deaths and overall it people

October for certainly very imagine, adverse to can you month So continued a be mortality.

U.S. XX, about average, a Now since XX% have X-day September come in deaths the on down

very But hard to hopeful they’ll course, down. certainly predict. come that’s continue to We’re of that

population. our with happening the to experience would in moderate, that So will expect what’s broader own we start consistent

Lemar Persaud

to then We And Slide Got evolving? helpful. question. So that’s it. wealth guys chipping guess, That’s a and from to churns of do X, you other big see this years, how another traditional away X XXXX you group short-duration and showed in the forward picture look mix on XXXX. I and then business insurance how more

Kevin Strain

It’s of growth, the faster businesses capital insurance, – long seeing sort in we’re deploy see the of growth traditional as we that duration, have less guarantees. and more

of that factors. it So a I would expect trend little but that, over it’s depends a time, would down on bit, – lot

Operator

from comes Genuity. line the Chan question from Scott Canaccord Next of

Scott Chan

Kevin, organic M&A And capital would on and depend on near-term you then about, focus your I talked mentioned priorities, you pipeline. NCIB dividend. guess,

wondering pipeline I'm is the So what just pre-pandemic. now, M&A say, versus

Kevin Strain

strategic you we and in would We’ve out, InfraRed ACB, different and always if objectives, be X at Dialogue a talked that really the looking and programmic Scott. spanned last seems and years DentaQuest look at. about, And Canada. M&A. bancassurance COVID, U.S., pillars, Crescent in transactions. M&A businesses in got And – they’ve our like things Pinnacle to we’ve done number my XX given in transaction through that the thanks, pipeline Steve’s all a the the in, addition in Vietnam, good across I mentioned it businesses Well, of we’re and things the transaction Care have of diversity There approach we’re we point I to few

It’s a that scale we able medium-term case, what they about. confidence diverse you looking were thinking we’re to ability a capabilities. – how and or And had execute, our either We business. we’re our objectives. have each gives So sense and broad we met of in in to add

a look those world, on the world, the it changes done the strategy? over it achieving At we for pipeline, acquisition. around our is is one, objectives? we’ve That will something execute on we always when medium-term on things. Life’s in can – going meet Sun DentaQuest the that? So this Is point, we Can those and at look we time. things. was it there That big about but And

Scott Chan

thing for Kevin, last as it. Got And well. you, maybe

priorities into XX%-plus Asset key X and about focused? it being them And between synergies? your realizing more cost X, synergies ROE Insurance these businesses. one of on And could Slide is target. maybe maybe perhaps, revenue the on talked ties Management and elaborate you But or You

Kevin Strain

regular them, for out the part Benefit give example. you to to support these from Insurance to successfully, opportunities, right? SLC to had expertise this flow SLC these Solutions long-duration reasons capital. Yes. assets GRS, provides out in and is basis, business ability we And that's out an looking have cash provide on mortality, synergies provide duration asset and we Insurance This able were were of able built the business and Defined was where an in to in compete build but what longevity We we of needed returns in and had a leverage assets. between so with liability another one able seed we and Because SLC. to here, continuing This build that, Asset a that step I'll as standpoint we provide Management long-duration we expertise

synergy business. the the making efficiency of sure that So uncovering opportunities Asset about Management for it's looking really drive all and that the we're and between Insurance to and

Operator

this for time. now Mr. turn questions Bitton I would We have things to at further no remarks. closing

Yaniv Bitton

wish good like to all our available today. this and to would to be of you, thank Thank day. our website later afternoon. you on Should it will a I have the participants rebroadcast, listen

Operator

you conference Thank for today's concludes participating. This call.

You may disconnect. now

Sun Life Financial (SLF) 4 Nov 212021 Q3 Earnings call transcript