SLF - Earnings call transcript Q4 2021 | Sun Life Financial Inc.

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Operator

Good morning everyone. My name is Justin and I will be your conference operator today. At this time, I would like to welcome everyone to Sun Life Financial Q4 2021 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions] The host of the call is Yaniv Bitton, Vice President, Head of Investor Relations and Capital Markets. Mr. ahead go Please Bitton.

Yaniv Bitton

and for everyone. XXXX. the Justin Life’s to earnings call fourth good you, Welcome morning, Sun Thank quarter of

earnings section slides on the sunlife.com. release call Our available are for the our of today’s relations website at investor and

call begin overview an full today’s quarter President and of Kevin results from We Strain, fourth Chief and with will the year Executive Officer.

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

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

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

Kevin Strain

Thanks, Yaniv.

to COVID-XX US to up remained over was mortality experienced. elevated significantly mortality which working mostly as than Canada, see in age reflecting COVID-XX X, income income X% both basis, higher in results million. on we related across income the were the and XX% quarter up in delivered to fourth to Turning underlying result, in management also prior asset X% down year. earnings currency and strong adverse net XX% a expected up billion net underlying XX% and and to continue population. we approximately $X.X Growth up US constant rates slide underlying solid mortality net was a $XXX reported Asia, with approximately infection

in also saw mostly the Philippines. elevated We in mortality Asia,

for to the our reinforcing In year strong ended at strong of announce returns to cash to SLF LICAT our regulatory all the length $X.X November, common shareholders. billion. federally capital regulated restrictions share we of increase commitment a and company institutions, provide XXX% Our XX% remains holding for following the position at dividend

with $X.X the to XX% growth. billion was strong ROE assets reported our $XXX under of X, XXXX XXXX Management the income our slide Underlying $X.X medium the term related medium we to year, of up results income the was moving gain by million in of impact XX% a ended trillion driven $X.X IPO at end objective closing year high billion term towards plus market full net of XX% XX.X% venture. Turning to to also And joint year India Asset strong objective. net X% with favorable XX% on with our underlying up and management. in

million Sales pandemic. start through benefits we total our group These businesses the We the were US also in ended wealth constant grew the COVID Asia grew and net of strong had of from AUM in Canada paid up of MFS year COVID-XX strong US $XXX managing impacts XX% billion. in currency. of $XXX profound while record related sales $XX.X in were Asia had Individually have growth currency. in constant were achieved Since outside management international sales insurance across with year, results and pandemic, hubs, almost XX% XX% in SLC the inflows the XXXX. in billion and claims. sales

identify us mental people and health, We’re clients on the for clients we our our to to they has these impacts and through issues. significant our when ways also proud there needed work to The be had help most. pandemic continue

we we not bring over. digital through demonstrated the innovating lockdowns the We solutions business. to geographies various new to is of And constantly in are course our clients. do also restrictions movement resilience and And that pandemic

supply mortality. higher driving rates. and The rates are chains also vaccine COVID disrupted continue unprecedented lower, are world, inflation and the unfortunately, As in drove Omicron continued from are to others also governments. we around among These factors where we see cases higher seeing rates incidence pandemic stimulus has spreads

manage environment is inflationary long also suited rising particularly higher pricing interest rates, Our mix insurers of usually well business and good end to Inflation support provide term. to followed in rates. curve disciplined profitability continue diversified over with actions. Steadily is an are for medium expense at and interest should business management the the growth, the

important and slide purpose X, to has long-term their never focused health financial our ever been. it security Turning more on is now are People like than before.

strategy. half seeking health and benefits and on respectively. X CloudMD top categories, XX%, not our use clients over guide more and where strong on they sales manage clients support. on maintained delivered to for have Sun our $X.X ranked Morningstar help to we elements to to capabilities Canadians to digital based with health year in funds our distribution This right and XX% partnership XX, with continue reaches to the identify US the continued to with deliver it coach. on compared risk bancassurance and In prior outcomes, to tripled assets health delivering their year. resources the In Asia, mental performance than XX% that clients to half our enhance quarter excellence, to Many CloudMD, sales US care. retail of easier Vietnam clients continue In of at yet make for mental the XXXX get Canada the MFS, mental of mutual MFS data supported found we’re performance benefits Life we them coach need. analytics their out record our billion. health proactively struggle new US, health, with study mental expanding are and key of the of US X group

outstanding was award for [Indiscernible] our XXXX. of million awarded in also sustainability. building and Bowtie, storey [Indiscernible] the the imperative to intelligence in the XXX in art office year and XXXX sustainable to building positioning artificial uses making example first are of great year excellence energy approximately building expand sharing solutions Toronto. pivotal digital type retail number recently continuing the that across an of of And by Sustainability the Life savings Life globally. in among X.X XX a We carbon Hong neutrality was kilograms invest This We’re Asia. consecutive analytics world, was in is carbon one is XXXX the we and investments one for insurer, for Sun it course to industry, leadership achieve American complexes of state weighted management XXX the the generated energy a Kong’s us. It recognized across corporations emissions annual like the to health operations. the homes. global global position our use XXth equivalent Sun over of year, insurance companies among most for North of reduced

the as Sun Finally, US, recently work was certified in our adding Life great to certifications Philippines in previous our Asia service India. and Canada place and the to center a in

Life shift Turning leadership key continue priority to think Sun organization for and slide to a we a is and to act like the digital X, digital company.

areas, additional of ones broad clients, their capabilities, of interactions percentage US, security manual connection the and In enable meaningful to the Link, with in In Asia, this need. we operational Our launched Sun digital is compared Ella with points working. plan digital Life million of in future coach focus the our in portfolio matter how employees. prior nearly wealth $XXX adoption digital example work loved have is financial outcomes year. solutions coverage spend Digital for for a helping digital protection families increasing that XX% another ways is allowing experiences, players time and in digital centered to digital sold their save our business a sponsors, new Canadians and also we’re they Canada, insurance things to easier and strategy deposits $XXX three year. on up digitally reducing applications efficiencies, ensure XX their million more This submitted continues driving XXXX and on of to to deliver and

easier do during for with business where to We’re difficult. making it are us, face-to-face clients connections more especially times

are providing our are and year. be just digital number and to These by on hybrid model ways the agile last through the our year. experiences continue of work some advancing progress sharing XX% We practitioners more a and businesses the our by across increasing people we of we digital flexibility throughout capabilities over the empowering journey support will

past year, I’m my extremely and of six first as we’ve this CEO, what months on accomplished. proud reflecting Finally,

track for are well-positioned have of growth, execution. strong We and record we a strategy compelling a with clear

purchase financial We effectively lifetime the Care, in they financial clients. that, Pinnacle with strategic now financial to purpose transactions through the thank IPO clients And XX to fourth year to Asset security our to into want lives. remain Quest. world Management continued capital call employees healthier positive Manjit, we India the to outcomes help live have Dental acquisition will manage I the the for all our and health over who creating of everything intention and XXXX, around our of our I and over joint venture, committed this us of achieve results. take our also advisors for to and will turn quarter With done our including

Manjit Singh

results. resilience Slide demonstrate business overview morning the once Kevin everyone. results and model. X good an fourth our you, provides The Thank of quarter diversified of again our

favorable results Our net good flows driven delivered businesses by asset market wealth management and strong and conditions.

increase broad-based offset a investment past our IPO the reflecting underlying largely the groups. approximately crossed of income XX.X% tax first at tax billion. while in quarter, $XXX net the rate, joint remained by share tax experience of expected few X% year, was XX% Underlying increased $XXX reflecting valuations, on an created of has India has team of quarter activity This gain the marking included ROE the the time our the the year’s largely underlying quarter SLC full return side, and the net a weathered income impacts XX% portfolio across partially the Asset million also mortality $XXX years. basis. tax of affiliates. in Reported value management, net of and for of matters. the COVID-XX resolution and time by on venture. million protection buy On income higher up in over of of a driven property full per COVID-XX the is earnings related This million growth our the prior from higher year exempt Underlying by Reported liabilities in was was related $X.X and strong our quarter. interest release nearly fundamental remaining $X.XX reflecting a equity effective business morbidity Management elevated and offset acquisition the lower to business included repositioned investment income higher earnings was

Assets reflecting strong and grew quarter at management. over of another under market growth net SLC value flows $X.X management trillion,

billion acquisition. year, Crescent and up management assets For the were driven the nearly SLC by $XX under net flows strong

per value businesses management Canada Book asset impacts the up $XX and share excluding from also X% was comprehensive growth value Asia and over AUM increased year, other prior wealth share XX%. the and strong income up Our in prior book delivered per billion year.

and of debt Our offering capital position increased the SLS The with increased quarter. subordinated ratio remains and groups. $X of cash both ratios did the leverage XXX% strong company XX at SLA. outlines billion, financial holding billion our business Slide XXX% at to in the the $X.X LICAT we reflecting XX.X% to at performance

from net largely are management underlying Asset $XX growth $XXX Accordingly, by in management target million income net Day charge Investor related increasing liability XXXX increase reflects to for down year, the million $XXX the prior reflecting acquisition we reported million. of SLC approximately for liabilities. income our The $XXX higher million expectations. was

age XX% $XXX and estate of This management. increase higher delivered was expense income of of of estate was offset at management partially from valuations prior income impacts income net Underlying market X%, Asset elevated. was $XXX US million net income favorable COVID-XX million $XXX million as at income million million US reflecting up investment remained a up in by of slightly prior fourth was growth. gains lower MFS reported was disability million are and increase and the included US driven quarter SLC infections expected net net working real The $XX and by year, strong driven results mortality unfavorable underlying net and population $XX offset experience. $XX by growth profit Canada’s by on XX% $XXX income. from equity impairment Underlying investments million US record year. as million real net experience. of $XX US mostly the report the underlying down

business are first expect That said, fundamentals the We the being the for quarter persist related of of headwinds group pandemic core XXXX. US to strong.

We growth for support includes are constant we’ve which the was premiums strategy. have net from digital Asia level our $XXX of gain $XXX a We’ve remains our product and In was the and net XX% to talent Management growth. high persistency enhanced million new capabilities. on added maintained currency basis. key income Asset Underlying good generating firm, up business reported Pricing IPO. million, India income and

higher conditions by business on in were effective was constant Philippines. net $XX business quarter the basis Expected markets, offset currency partially While offset profit XX, Canada Total record XXX increase XX% were reflecting morbidity. million partially asset sales we of new reflecting US prior Slide pillar underlying included challenging growth to by the X% X% This tax AFS view constant on quarter. in the continue on income XX% two down of individual gains. and offset earnings line made expenses. is and by Experience and driven mortality by strong. the a basis and updated overall by some the primarily favorable results Reported insurance profit provide XX primarily we sources in to up that sales on a face the related the The earnings. the sources sources surplus and a sales. Notably, million we period fundamentals expected basis, an market up meaningful by profit important in XX% US for increasing business lower currency. expected expected COVID-XX business on experienced of experienced earnings, currency and gains separate a more year, were lower Earnings from Insurance grew sales have XX% experience, on net constant XX% partially strong, up investment driven corporate On of increased profit fourth information. we income an higher were related constant and primarily from slide a a management in include driven basis. basis driven an were in and reflected currency with losses. changes of by prior both for our rate We’ve underlying basis. wealth reported the sales market improved driven by On Canada Asia the gains very impacts are was COVID-XX we’re outlines an by and insurance pleased year. losses also were gains. group sales in seed quarter benefits driven grew and underlying

growth in while in prior Asia the sales heading constant sales with local have across double momentum declined And hub most we markets XX% markets. sales currency insurance the year, digit individual into pipeline grew international from good XXXX.

higher constant XX% solution While Canada defined sales benefit increased on higher a the and currency basis, driven in Philippines India. by sales in wealth and sales

sales as gross Asset inflows institutional strong constant by billion US new of quarter basis, management $X.X net net most reflecting flows outflows, business in and XX%. was strong generate management SLC up flows MFS margins fourth $X.X Value billion. were businesses. had across retail offset outflows. of a delivered on the of were XX% up higher currency

on well as five term progress XXXX year slide full objectives medium XX, view. a year a outlines Turning to which as

year, in of to more footprint geographies. pandemic through for business had health allowed results, to financial challenging across our our related and clients. to The outcomes and impactful our We challenges pleased mix especially environment with navigate combination deliver our we diversified global a effectively are a through XXXX us operating manage

to for leading strong our by well-positioned us opportunities period. MFS track As the strong positions US shareholders. growth returns and we in Asia. provide we more the Yaniv wealth businesses and are SLC a of pursue and call question record towards and and performance look markets to market premier XXXX to build ahead franchises, back capital management supported for that And capitalized established Canada, to in a allows strong shift answer beyond, a insurance Asset I’ll and attractive position turn With presence a in and attractive management,

Yaniv Bitton

questions re-queue of now Manjit. I opportunity you, that you would Thank or pull participants. questions ask to morning. have one yourselves all questions. and To Justin additional help to limit two I will this an then to participants the any ensure ask to with our ask

Operator

first you. question Humphrey And from Thank [Operator & Instructions] Dowling our Lee Partners. from comes

now open. is Your line

Humphrey Lee

My little you was experience and over, do The surprise Can all big a the players for Good that group my favorable that just more quarters? since normalization you in terms benefits taking results. question stop-loss bit thank talk relatively in me, stop-loss of underwriting have it favorability of your especially and to on compare performance. the a we’ve seen stop-loss is morning dramatic claims underwriting questions. to previous a first US was

Dan Fishbein

Yes, Humphrey. This Dan thanks is Fishbein.

We continue the from and during wearing the reductions we gradual seeing pandemic. that care impact the seen a fourth we’ve of the to quarter. results favorable in were What off is have favorable stop-loss slowdown in

delays you to remain half quarters, have we year. But those during of favorable in pricing we’ve the significant about XXXX COVID. XX% stop-loss largely due know the were the in seen the we’ve both And utilization the those due favorable But actually fourth starts XX% As year results and the returned which favorable, in impact that due and were and continue care hospital fourth normal to then very quarter. estimated the of results. the results underwriting results stop-loss and third to first and to stop-loss in continued to the was

Humphrey Lee

to just there normalization than the stop-loss, running a of favorable, COVID more through numbers? claims is last the the quarter little $X is net was income of group for don’t you this the benefits, million thinking since quarter’s like $XX thinking for kind results, versus the on underlying provide basis, the or more like delta kind about but So million the seemed just net just just anything the of is that bit delta, income the like

Dan Fishbein

claims as entirely some We’ve quarter the that mostly entirely COVID the disability mortality, million indicated COVID well. in fourth experienced we $XX delta in claims. No, almost was the unfavorable or essentially

variant, the first quarter less and COVID late contagious quarter quarter experience to especially fourth what’s due which now difference very was If severe fourth in in the about more Omicron quarter fourth US of we the in quite in during but quarter third more the been common. claims. and between far variant we’ve begun the So experiencing the delta the quarter mortality. is and the And severe, happening far, and think into were is the third terms largely which the we

in more US in has, the pandemic, population from what overall think the out was in I age into working the population. year, the population much of So whereas seeing here earlier in migrated you’re which second playing the COVID half is mortality largely it the above the XX

Humphrey Lee

the to for COVID like impact quarter first a just from it it $XX XQ XQ? not big was But is US, million so increase

Dan Fishbein

I and higher, the we the third that though, time of million. quarter, those COVID believe fourth It significantly $XX morbidity follows incidence the periods. that in unfortunately the and in deaths was our mortality reported quarter in US in

Humphrey Lee

Thank right. All you.

Operator

next comes Dechaine our And Gabriel from National thank And Bank you. question Financial. from

Your line is now open.

Gabriel Dechaine

curious I’m the you. thank Well, Yes. about outlook. more

saw US yet this see particularly the weak, do have you and you You see Canada appear seen medical really these coming next see and quarter But they and Canada and just fully headwinds price the inflation talked in, for over you evolving by claims group US hopefully the the and that business may you alright, such not some COVID-XX But really well, you’ve or we I’m for those anyway. alternatively, won’t for for may trends the an like just group still that how transient, but things transient there’s other issues year actually? think I headwinds impact health that and some we wondering rates mortality as and like business it, on matter. was horizon mental be replaced cost that

Kevin Strain

Jac talk benefits US you want do can to start Canadian the maybe with about business? and the then group Dan,

Dan Fishbein

Sure, sure.

second to as above exposed threshold. claims So to the remember large are claims. our kind a impacts US, mental not we course, health business of in that good question generally In order business, maybe. catastrophic is of very In what very what as stop-loss

different in Mental term. So the business fall. those and our disability certainly to which benefits than our morbidity. environment, the But is quite US claims are not would Canada, health mental impact limited on an typically are where mental on a health have healthcare year two disability

are So of reserve while reserve we may see because that the much based duration set we some a course, the impacts claims claim of expected on the smaller up category there. in

about disability these which in times, additional more We’re capabilities obviously issue members place business for and of roles. that work in at to put looking very our least to concerned work, especially many for now members more help approaches, in because our virtual including difficult with at environment feasible return alternative this are we’ve

disposal the products think at So manage simply to is are because But modest in we have tools again, impact the we offering. that. of more the our that US I more

Gabriel Dechaine

costs medical any about what But inflation, concern? there is

Dan Fishbein

the impact it one medical Well, potentially business, that area cost would inflation stop-loss our could that’s impact.

of business account, course, And the every expected consulting work number actually insurers Our widely medical pricing sources. inflation, as which our public is medical is a we in firms set year. US, well we factors, of health and in shared take into amongst fully we sample project the costs actuarial when re-prices to inflation leading with pretty

we quickly, that that react each we trend, the if we very would our would So in expectation some able re-prices incorrect, and as business prospectively to going forward. be for price was medical year. pricing reason And for have

that for fact, hoping on for impact we’re stop-loss inflation, mean, would be business medical more premium. not medical In inflation our the I but primary

Jacques Goulet

it’s No, okay.

let me hedge you issue. time natural large have that block had more the before. impact experiencing. [Indiscernible] So this not business, know, bit you annuity you the on a different we probably a in know, Dan has is probably give know. a bit a you context material of And a Canadian COVID Canada, situation you’ve is also part as around. bit here. our in actually The little as And addressed is from mental mortality But what there’s an as because

May the through now increases of it. then And an as You book. COVID. the a putting might we And in XXXX, price in number cases, mental of health from increase we’ve of starting fact, before saw and we done years XX% through in accentuated on impact some it’s started actually But recall COVID. visibility,

the COVID expect a line need So the to part actually a getting of is, driven visibility bit we’re But the the work. variable what work with issue access people to incidence we in And by back issue place. care moment at from people we And think to been good the is It’s because return pricing. in during to and of in a is that is challenge. care has an COVID. that access is

it Canada, fact, we of comes think So transient as in aspect actually more were we’re to morbidity and when terms that’s of in it in incidents, the with right to place return saying work pricing something in you the earlier. US

Gabriel Dechaine

Duration, little the for uncertain a might Canada, the as claim? duration some your that one trends these of be now in price but bit of

Jacques Goulet

Yes it’s as it’s to this normal. care COVID back during the COVID, have been and known but know, to media well been to recedes you come due difficulty, expect a problem and will that in access we as

Gabriel Dechaine

you. Thank

Operator

from comes from question Motemaden Evercore. next our And David you. Thank

open. now is line Your

David Motemaden

how morning. wondering share you’re another about good I’m out now about it’s that NCIB there if thinking Hi, repurchases putting Kevin, just allowed. could you talk maybe and now,

Kevin Strain

David. Thanks Yes.

position, at in do with As and be our up, capital from do you M&A to for support we position. the the still capital. that of NCIB billion the quarter cash What results, we using opportunities look expect we’re building growth US and will at that we DentaQuest capabilities the activity and close May, is about $X.X to coming we strong acquisition have June timeframe can see a that’s capital in but

we the closed. acquisition assessing be and get as closer the DentaQuest year that of get So, back to we’ll the half

So our it’s a of pipeline. sort at of matter looking

active. still We’re pretty

XXXX. and to lots invest we You would opportunity ten have did saw my strategic on opening in got the of see go our in we’ve that in that initiatives remarks And businesses. lots we

So it’s we’ll year. that balance as closer back And half we the those to of two the of things. get a be assessing

David Motemaden

million for Thanks did an about talking And maybe a come that question think then just flow. free were net the $XXX flow, I cash in for year last businesses? guess year, on COVID this what I Where maybe we the given dividend. of year? has that. level the Great. just was going an flow but free and outlook underlying talk impact obviously, you year, in forward the this cash growth think about cash

Manjit Singh

morning. good This David, for questions. Yes, is Thank your Manjit. you

as the of term. potential, know, given line our with growth you million broadly sort in that In businesses going generation and we expect mix XXXX a referencing are over we of capital As we’ve our that. sort And to $XXX of range the forward. outlined the be are medium range in

David Motemaden

Got it. underlying earnings XXXX And I I the you from a time that that COVID But headwind. guess the grown was why gave last the obviously, first it grown? mean, believe think I I XXXX. is hasn’t since despite have headwinds COVID.

wondering just increased? why generation the free cash hasn’t flow So

Manjit Singh

a I there’s couple think of things.

changes been a market And mentioned, I a the said, And interest of to XXX as So invest target businesses. at number the of obviously, in over factors we’re medium looking seen cycle. one, organically kind rates. we market impacts our as like of Kevin there’s in we’ve in some some continuing some the opportunities like term is have then there,

David Motemaden

you. Thank

Operator

Tom And MacKinnon thank you. from And our next question from BMO comes Capital.

now is open. line Your

Tom MacKinnon

had big time group for question business and new there. US very thanks Good all for In growth, morning. you fours think in activity business XX% sales in here. much. Dan Yes, Maybe I

one on your the other you’re in So the end than higher then XX% growing sales end mortality same expected quarter. experiencing both claims and you’re

mortality? of process terms Did what away renewal? in when are came how you So much explaining can in this in extent And your for to do elevated try, mortality elevated to think these you through help of this pricing could you go go r-epricing you maybe thought up pricing? groups us the

Dan Fishbein

Dan. thanks, Yes, This Tom. is

the stop-loss mostly was in which in noted quarter, fourth increase of our substantial first in as sales So the all, was you business.

cycle. But saw environment pricing we business results consistent the quarter, in of quarter emerge And last So rational we two the most that the on the year in prior in with months that a months the had the much there which fourth a one-one mostly two of sales dynamics the more year, are is biggest renewal strong increase sales largely is the of was course, because especially and group the in stop-loss. fourth well. of as sales business

and very earlier team the strong in had products the seen So we really as in irrational some the day that our carried fourth quite earlier frankly, pricing, quarter in stop-loss fourth quarter. largely evaporated the year

up those ended the especially a nice last having close very we strong, ratio, very, finishing in So two months. year and strong

And growth this the for because well some year business so we’ve had that business. nice stop-loss bodes in

of business. And comment related to the pricing course, specifically driven. COVID group is course, Your is of life that

driven. In fact, entirely believe we COVID that

pricing expected long-term. not persist fully are not to we So that’s the for mortality because current COVID

upward have taken actions, occurred think will moving as don’t in year marketplace. I upward to fourth what and to click pricing the pricing side quarter out that elevated have adjust However, immediately. quarter observed to point would contracts. as term about in the three long we on into the which marketplace we’ve And changes opposed experience. first Most moved talked our reflect be modestly the quarter. in we some side, some appears business fourth entire The in in the disability we of both to stop-loss and two on past, pricing group the that is the

of book for increases a the So business. while to it cycle price does those through take

Tom MacKinnon

And for second Thanks. then the question.

but exclude the the Asia. sales wrong, good really growth first new correct me if had this was And Asia I’m good in I’ve international time You’ve in seen hub. pretty business

Asia new quarter the quarter Thanks. you going profitable? is and from forward, Asia normal or what we looking scale? should normally, the to looking what first coming in how more the And we it fourth saw forward? much Is coming be business going So are happening for new Is in business business this here? or more at

A –Kevin Strain

call the Tom. It’s Hong Kevin. now. Ingress ground quarter. the on Kong this She’s in on is

question to Ingress. to turn I’m And going that so

A –Unidentified Company Representative

thanks question overall I But Kevin bit Good Good a think I much. terms see to little did blanked very a morning. get out. in [Indiscernible].

On a effort we’ve new ensuring business on the product gains, done tremendous asking sales. we’re actually quality addressing profitability,

already of While local This quarters. the X. momentum or been then the bit that has over first nine look if trends, quarter you’ve of of in [Indiscernible] quarter. this four irregular, back been on been the a past quarter probably look market, X% perhaps it’s actually was But of of has actually quarter the little some seen fixed. the this our actually just International the best a at past hubs, X% that interestingly, some the And some you

are rebuild. seeing through coming and we So this

the So do the implications into Omicron remain. lower clearly, through some shows sales. the need line government see you optimistic. profit are through does And around uncertainties to and implications flow at federal the remain then of the cautious, look should sponsors gains we We we also virus on obviously, of the remain But as actually expected which track mortality. that there line and new and restrictions

A –Kevin Strain

a Indonesia, growing Kevin, just opportunity. great the Tom, we’ve with before we agency the Philippines, one Philippines, class course, the investing a been, a being We in Vietnam, the year, very this a this of years force, year that ACB We Malaysia, might have We’ve in one in it’s bancassurance distribution year. number that number with ASEAN countries Record of strong relationship. for I in as see did and Vietnam Asia. Bank. note now a good then bancassurance transaction grown TP they’re last in significantly middle with

that banker agency we’ve on got side. nice grow new and a well CEO we’re And to continues So there. a positioned the

excited related then, agency growth with growth results. a and And to quite some out relationships I’m are Malaysia India And in in got high got [Indiscernible] relationship class emerging CIMB we’ve We’ve there. China see there and Indonesia, banker to middle good and building and got course, Malaysia So seem well. force of is the are really the agency one as a we’ve well. quality good a as And there, strong force we start about Vietnam. continue strong seeing

So why results you’re seeing that’s there. strong

the question think impacted ways in different that’s times Ingress’s about And COVID. But seeing different would countries. particularly of because investments overall, with across is country-by-country in the though, COVID really it’s you’re think this I around a middle at off in results and of say quarter, distribution the are paying one the those good emergence class. what our point I a of COVID to

Tom MacKinnon

takeaway to new quarter expect And that better is business to continue that gotten takeaway? you the be those significantly the Is that the traditionally had in you’ve in you than things business that Asia Asia? gains the or that losses a

Kevin Strain

we’ve controls work discussed expenses, scale helpful right the I because your done that bigger it Tom, Asia, the also the is and in the mix think, distribution the that channel, earlier. business Ingress you’re on of

what both those is of of the the So you’re in seeing results. combination

Tom MacKinnon

do disclosures. like that. Thanks. I the for Thanks

Kevin Strain

Tom. Yes, welcome, you’re

Unidentified Company Representative

it is more the But through it positive be variable, trajectory, variable expect will don’t quarter.

Operator

Thank you. And Doug our from next from Young comes question Desjardins Markets.

Your line is now open.

Doug Young

Good morning.

the and do at margin of benefits realistic to achieve being you’re like, is questions, lot there I question, to US whether plus seeing group out on do and transitory? you or stop-loss as getting the you in the the So just you how but see X% obviously more maybe that? it’s see throw guess, that question pressures excess business margin side been that as think I’ll that seeing the employee The you’re Is Do this a answered you’ve about permanent is that loaded just able of policyholder given Dan. thrown on your you, why? on experience that it group in is And that side, feel back still you’ve you’ve I this

Dan Fishbein

Yes, Great questions. thanks, Doug.

a there’s pieces of think go there to I different through. number

of first the all, on experience. So stop-loss

I to in XX% But strong and ongoing earlier, the to favorable experience care really was the of impact just COVID. of that think from delays As about about results. due due XX% it of said we underwriting was XXXX

our quarter as of see in in population we normal. close So, well fourth on to is statistics utilization based the book what very and utilization this return overall business we returned as

expect but underlying that favorable not. would continue, the it’s part tailwind we experience from and would to So care a delays that

of little quarter very January, that a time, getting a the caveat there Now now. in where thankfully in first better was were period there overburdened, hospitals especially were I but should

to the a see linear anomalies normal pattern might back we So utilization. path some in complete, straight versus

the nothing pack what business ratios, the middle of in century as mortality that book the book having at or US the of a mortality, far So, experienced a As in unusual portion we unusual companies of quarter compared in a loss as percent, as once in the our relative to a I you we’re of experienced peer was was if in business. very pandemic. fourth Obviously though, look

delta time, variants of fall, in extending things the and February, to into the January the difficult very to both pandemic. nationwide. hospitalizations, get Omicron deaths we’re and in a better. even with are flows, the now Cash and variant know, part then fall you same At the starting As starting are

first the predict still But we our and impacts another the of dramatic quarter. would kind belief There variants. more course, new can’t a especially COVID beyond to significant new impacts after our we expect we’re get the in with will variant, be the hope, So of what of happen, that we much quarter. first endemic hoping barring the emergence But impact will quarter. subside first to level of but

Doug Young

margin. around just the And

Dan Fishbein

on around actually target. Yes, it XX the peaked The well above Remember, a it’s months you. which you. our Thank obviously, Thank margin, margin. trailing at was X%, measure.

in in the we best pricing, are So mortality, the very products been that quarters four is COVID we’ve that the of book through But it’s it notable look in take the has now. now. for never of on fog say to put is business, a on to momentum, I back it’s sincerely off. that on the terms hard of to all where say capabilities, business business we new condition and better the in market, while sales but the with exception, that can exception will in have digital ever COVID will right growth fully group it on in at the impacts obviously on than of been condition actually persistency, the see I wear

we impacts group a should as as its fade, earnings significant of COVID business in So underlying US as source hopefully earnings the the they see which will, growth the power reemerges.

business, closes, its become the of it’s because will capital. very nature margin, the is a on somewhat just our big comment when DentaQuest lower a little other margin by requires which dental business that business business, a one part very Now,

on generate margins lower So, very equity. strong return

nature the of that business. that’s So

So have metric considering we and total there business are thinking the our the out about the target play that forward, going in book role that of we DentaQuest right current will forward. is margin going

Doug Young

in Steve’s $XX net inflows And line, billion color. my question, good then just on that’s second but Now know quarter. just SLC the on I the

get And obviously, to of wanted you’re it seeing a Just your by a sounds increased target little flow XXXX to $XX million earnings color perspective. $XXX. for you what like from

gas Just there of get in increase? tank what drove more trying sense that on the And side? to is a that

Stephen Peacher

for that really good our in about business. for but Thanks Doug. things full for of the It’s like we year we’re Yes And is diversity of the Yes. Steve. question. one flows. the really feel Hi, fourth feel that seeing the momentum the in good also those fundraising quarter, I

across platform. growth the seeing We’re

million BGO billion million a a If for you number the BGO. think UK XXX over cold for a Crest for business billion XXX a half that assets for a of lending our the instance over almost income in fourth lending includes and fund, real fund, storage for increasing fixed for Mezzanine at business billion European estate fund, quarter private almost for almost US, real dollars estate that

the and widespread, year. So same it’s is very thing true for the

in expect that I liability due seeing of and So say of good and this increase primarily example cold I outlook we had in increase we is Investor [Indiscernible] in an because to that would that the about out launch new at That’s into to we year. there at that. in And that Day. a we’re originally given we that’s continue guidance And terms storage funds feel hadn’t good included. the that a increase fund. say would our And

a raised kind we’ve a came today XXXX. the to And of billion germinate over that’s industrial. That within a So fourth was fund that of quarter niche idea started last in from very they out that’s business partners. Carlisle business And a now dollars. also that secondaries bought strategic in example is going gangbusters. BGO called small we’ve fundraising, They’re the BGO that another

So that’s the outlook some of driving increased the there. things

Doug Young

you. Thank color. the Appreciate

Operator

comes next And thank Meny from Scotia And from Bank. question our you. Grauman

open. now Your line is

Meny Grauman

the we just the little lots the of morning, through about And impact? of on wondering look touched some make talk discussion so see your that’s potentially I’m border age of more positives on want the are that I headwinds know wondering here. but if there that group about the a talked to an a good bit, going calling sides there’s to some know Hi, both yet. Dan, but don’t perspective if if far, of material the people to really? just just results don’t we something given just of on at what coming that’s golden you headline I really benefits. we on business or And

Dan Fishbein

Yes.

competitive. and So Clearly, that. to over turn labor a market there’s interesting maybe noted, a has at speculation the you the become on moment it dynamic. hyper I’ll as start of really then And lot Jacques. It’s

in way competing they employers talent. So are whatever can for

increasing benefits we’re hard to fact, compensation do they specific number anecdotes expand compensation of as lever tease employers the is and with may out steadily, pay this the benefits of obvious benefits an employer the is of is very perk side but be time. us opinion been versus are certainly doing number in not and products way and amount see has In data obviously the for bigger as well to although preserve benefit book to business. pressure more entire or to whether drivers the It’s them. one appear at in a talent to and for going fairly the direction reduce scary over modest an overall this way our benefits that that’s this attract packages. does and We that as It versus and general environment ourselves using than up

well growth bodes ascribe the certainly again, and we for effect, can’t cause exactly are nice business. we indeed business. in that So group seeing And our

Jacques Goulet

Yes. with this you virtual become It’s more would becoming said, that Meny care Dan certainly might here. more give I and is telemedicine. Canada I agree One important. example organization. is and are in everything has to with little a Jac health competitive in and mental you Lots benefits program have you mush, your come of that. if a like, the on a want benefits bit if modern that emphasis of benefits

where more people workers. the that expand have obviously from seen to thing covered So last right announcement coverage, We increasing they’re the looking cover that do. to you might Ontario we it’s we benefits is coverage what think point, to I gig And benefit have call mention, may welcome. something

benefits So I are I and think increasingly remain fully that Dan. employers. agree And for with strategic

Meny Grauman

Thanks.

Operator

you. And Scott comes next our from And Chan Canaccord question from thank Genuity.

is line open. Your now

Scott Chan

quarter, moment, back product back wanted speed And for looking together, this XX full XX, go about day you just talked XXXX Good to guided flows put investor if many, kind had I a billion XX you because of almost exceeded launches. in it. you in different your certainly many billion morning, you and XXXX, it Steve. I net to with

good it platform. ahead So sounds one like you’ve year the got on visibility in

repeatable XXXX products? wondering, of the the with timing on based you’re certain is is just was or just So obscure an something seeing, pipeline it just that year

Stephen Peacher

to raise say types. it. equity businesses, I different Well for The But product quarter that do lumpiness we’ll some is would there continue quarter thanks question, across and say stall we’ve to it the Scott. we’ve funds. number we of is see and the I a seen private would reason got that

in you raised you another have raise typically or know, periodically, years. for So get won’t as fund those a two a couple three that closings product, have big couple you closings

eighth fund it. the big, Crescent. And closing mezzanine had there’s saw had to And mezzanine We direct of large this at a a for their fundraise up of the that in we’re that fun fund big was some lumpiness a They so some of we middle this year. US year. lending

said year. the lumpy some fundraisers this got a Having docket were on we’ve that, year. things there So number of next

fund. European of BGO be They third their with market products. the the with in will in be a will Crescent example, couple an As direct market different lending

anything that don’t of be was this normal some think would in anomalous I just beyond year, there lumpiness. kind So

out year putting But be code. year. projection another a next fundraising strong it’ll think we think zip same the specific don’t in for I So we’re

Scott Chan

wondering just provide a my term, of term And more interest got second And to question the rising just the been in rate rise XXX interest you’ve in near line? could it’s this I helpful. by And on seed investment earnings spot games. that any near think kind That’s range, rates, affected past surplus guidance if for projected quarter you was on and then on million you below got AFS I with number. Manjit guided

Manjit Singh

thanks Yes, Scott. question the for

you and we the target the AFS quarter-to-quarter. the this we’ve mentioned you of sort sort level. impact quarter. right had you we see rough plus of it from quarter, remains surplus have per four impairment. $XXX overall, As of But million And as bouncing think might for million and minus $XXX mentioned, or But around earnings range the

Scott Chan

very much. you Thank

Operator

CIBC. And you. And our thank Paul next from Holden question comes from

Your line now is open.

Paul Holden

Thanks. morning. Good

this so directed Mike questions of So far Roberge morning. the a but his gets none call, on normally number way

to of as in the these involved. So a let’s messaged get benefit in MSS you’ve and clearly in was market volatility. lot past from tends of Mike the There volatility January periods

around well? mean this sort So give fund us flows of for you fund might can what during wondering performance thoughts as period, if some particularly and it

Mike Roberge

a year banks Mike. say be are Paul. fall what way of geopolitical we number the in the market there and some I’d play whether the interest short inflation, number This things. just, frame really lonely that rates, of risks, I in world the in thanks, Central year, time peak Morning. we’re from is that the high the of in some of stocks of of time, strategies years, of some valuations world. going it’s risks are the We is central where of such just to the I think of markets downside, performance. here. the bouts had be in in terms saw would going was guess, struggled period it a is parts fact the I that the I where in and the around pickup high, early be getting to they a volatile. and valuation is of mean starting this the seen are part bank impact a of and the first we’ve we more around I for a given to number have continue our think play that

newer to for at create is high, time challenges the think, and market. and valuations going risks, emerging are more some So emerging the I same

we we’ll we’ve comfortable an do well economic cycle. out. economics performed But feel in to cycle, those Our would well. And like I how platform see being historically to that through plays cycle more that Historically the environments. done is so and difficult say tied

sit in see for in you quarter-to-quarter, industry If some, remains and flows retail people we market is down US the is year. probably saw the to come an volatile, I the markets going that terms get it In expect on actually additional to quarter, and of year. have that tend would flows, the do this the when see sidelines, fourth more this you volatile, see cash we’ll what yield will

So relative. cash people are to likely in sit

to view is think so the our we’ve got And through cycle.

by We’re not through investing adding several drive things prepared cycle. in headcount, more think that environment. preparing and for costs, too a those over we we will discretionary we’ve difficult we’re terms much think growth the in of been last the And years

Paul Holden

realize close you to update for just Thanks for help work of us Manjit any And Can second benefits maybe Kevin or question, the that acquisition. thanks. on expected an to and close you’re expected maybe this DentaQuest update Great, then give context. us is ahead one and on related to guided give on do can able synergies. an

A –Kevin Strain

I’ll Manjit and he But and for with it’s his know this. at And And XX. had would covered. does Yes, that step to that and Dan away Kevin, start away I’m to actually speak funeral questions step ask he’s Kevin that so Healy, that. and I Morrissey to David I mentioning have a

his So to I US and earlier he this it to leave, dad away passed questions sure does want Dan keep needs funeral. to make week, But the that coming. make the

of business or said how still be can are number number it. watching states in approve There So but in earlier been a still expected of taken. a as to in May We well. There’s to we we’ve there’s involved on performing June. DentaQuest, I close the been has steps to be restrictions

do what maintain are as at be, much restrictions still as that of would pricing. in original we can terms our in it close but we we’re this But expecting it business how we we’re can So case thought in and there period. least interim will

to it as great still. I it’s So as And we’re the can. it that addition closes think excited. going to soon I business a be hope

Paul Holden

you. Got it, thank

Operator

comes And from you. next Securities. our Persaud Cormark from Thank Lemar question

open. Your now line is

Lemar Persaud

Great, question MSS Mike, for is moving to My back thanks. just here.

margin pre-tax not mix Or a shift So, past XX% I to keeps the retail? margin higher, margin? little due entirely remember talking bit the the too else in grinding in something about upper XX% just there distant in to in this range.

be helpful. on comments So any would that just

Mike Roberge

contributed the Lemar. the Yes. the Good obviously question, obviously quarter. the morning. Yes, that. got print pretty in it’s for But Thanks backdrop market you and backdrop, good to beta

going through aren’t you to costs XX% you of remind the going the operating the some year. in same of first our get where cycle, amortization compensation So compensation half market and continue that at the We to leverage that’s margin the the to bring level, just got better tends XX% that higher. stock then in to drive stay would here to get year we’ve and margin deferred the rise the back we of half to lower

So with margin. a over an XX% all that’s provided. year a guidance we high, time the at printed the And for the that little we’ve market

anything that think provide. different I don’t would there’s I So that

Lemar Persaud

Thanks for that.

of suggest with institutional fair some so normalize? might earlier outflows the the should we the on and in market be question, net it that business answer volatility the think that that in from would the to Just increased challenges

Mike Roberge

primarily we’re the makes the for definitely It’s highs see possible so all-time and that a in that addition highs is market DB book to get been you and de-risking that’s these because to as continues make so so all-time hopeful. clients as headwind that plans us market an rebalance book and equity you

that but for brings diversify the book longer guess term that redemption it down in volatility to to that. is is hopeful The fixed not activity strategy We’re offside into some probably I on income.

other equities where income years expect sell into several would in and activity but again those we book be of out to in so need fixed the come we we clear So side over a that’s particularly as down we allocations more think do the here next income. of the redemption on fixed the people part to hopefully that strategy go can of and

Lemar Persaud

Great, thank you.

Operator

And Nigel you. D’Souza question from thank comes Veritas. And from our next

line Your open. now is

Nigel D’Souza

risk follow-up sense population? exposure a of question you first had I the policies a experience. experience group US to just group the benefits relative roughly general morning. could Good mortality vaccination in us it you a trying you. give quick for get morbidity same of rates higher, on the US play Thank sense understand Is versus out? Could how and and your to on your lower the

Kevin Strain

I’m Yes. going It’s Kevin. a higher but to Nigel. at take level a crack this, at

I call for it’s and you on discussion a think around obvious reasons lot mortality and of this there’s been appropriate If discussion.

and taking relates in so us in where it’s that with death us claims the and having does rates to we in you at either. Philippines as ending and look now lockdown be us Indonesia back hospitalization this and you COVID to see well but types is you more them it’s of in business and mean forever not and we rates going US it If relate the we Omicron where claims those I India in approach back morbidity the and and happened spiking us quarter do know us quarters It and vaccine by to that things other hold. see to country happened rates. see you and death to COVID the having not

because why that and This claims it It’s we’re business challenging These we’re it. our these in say would general it’s when in part we’re business. we I different to rates countries of COVID of at are think and at clients good best in if do rates you indication what in hospitalization look they death the important you obviously protect are spiking and that I the mortality that is way where So and business areas. why gives here morbidity for. look a and help I is that’s think

say though. but in give we the general can comment to rates that population talked this benefits death would terms a versus you mortality know Dan, and business morbidity So our vaccination if quarter we Morrissey saw our rates to industry I to add when don’t want we group what spiking Kevin the is claims. I and may it in consistent of

Kevin Morrissey

the are I’ll life underwritten in insurance all Yes, we we think we mortality see that individual generally that’s add across claims maybe of individually the that benefit think uninsured. we’ve lower geographies and rates that where a is terms to when for only thanks insured when Kevin the effect the thing the about underwriting seen of the population than

it’s individual a generally business you positive the switch think group broad-based. We that’s more when more accurately So don’t done much but of have population. and I underwriting to probably profile it reflects the

Nigel D’Souza

was tax I tax a prior items That’s resolved. if It’s lower on tax helpful of and quarter from was that your benefit a ran my second of decrease expect some that on tax-exempt and run you and understand much rate. going color maybe how income and to was and you income the you running could this provide it year some effective wondering forward? were your that versus drove just color from more exempt exactly at and where the question specificity what that I issues for tax mix rate on prior

Manjit Singh

your Good Nigel question. thanks for it’s morning, Manjit,

full income was but can lower prior move prior for as jurisdictional the tax tax in prepared a earnings, in that of many the of mix exempt main the generate the to disclosed items differences in throughout quarter and think you a matters reasons, matters. rate a resolution around from to in estimate, in good matters. my that drove the basis resolution year So year is of your we’ve to tax about about year you this rough mentioned tax statements, it, I year two-thirds forward range and tax we as our the how we income terms about terms the increase relate the give prior still think our And financial remarks, of and I tax of of to mentioned. for to the for but going think about can to those of about way of third the it specific related in it’s last is that sort quarter we two quarter- quarter And then, the on that a of on-quarter exempt, XX% point, you the know reasons XX% higher nature tax income have a the the rate

Nigel D’Souza

there’s are is marker that you essentially clarification automated the just when that any items elective recognize items? or triggers nature there tax these these that, are on a a of mean where recognition I And can

Manjit Singh

sort there’s No know. you of

to You these pick don’t things get when happen.

Nigel D’Souza

Thank you. helpful. That’s

Operator

things and now question. am I turn further have for at Thank to Mr. you would I now further would to and this time I no like like, questions closing remarks. showing Bitton no we

Yaniv Bitton

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

Operator

call. Thank for you This participating. concludes today’s

You may now disconnect.

Sun Life Financial (SLF) 10 Feb 222021 Q4 Earnings call transcript