Sun Life Reports Third Quarter 2024 Results
Sun Life Financial Inc. ("SLF Inc."), its subsidiaries and, where applicable, its joint ventures and associates are collectively referred to as "the Company", "Sun Life", "we", "our", and "us". We manage our operations and report our financial results in five business segments: Canada, United States ("U.S."), Asset Management, Asia, and Corporate. The information in this document is based on the unaudited interim financial results of SLF Inc. for the period ended September 30, 2024 and should be read in conjunction with the interim management's discussion and analysis ("MD&A") and our unaudited interim consolidated financial statements and accompanying notes ("Interim Consolidated Financial Statements") for the period ended September 30, 2024, prepared in accordance with International Financial Reporting Standards ("IFRS"). We report certain financial information using non-IFRS financial measures. For more details, refer to the Non-IFRS Financial Measures section in this document. Additional information relating to SLF Inc. is available on www.sunlife.com under Investors, Financial results and reports, on the SEDAR+ website at www.sedarplus.ca, and on the U.S. Securities and Exchange Commission's website at www.sec.gov. Reported net income (loss) refers to Common shareholders' net income (loss) determined in accordance with IFRS. Unless otherwise noted, all amounts are in Canadian dollars. Amounts in this document may be impacted by rounding. Certain 2023 results in the Drivers of Earnings and Contractual Service Margin ("CSM") Movement Analysis were refined to more accurately reflect how the business is managed.
TORONTO, Nov. 4, 2024 /PRNewswire/ - Sun Life Financial Inc. (TSX:SLF) (NYSE:SLF) announced its results for the third quarter ended September 30, 2024.
Underlying net income(1) of $1,016 million increased $86 million or 9% from Q3'23; underlying return on equity ("ROE")(1) was 17.9%.
Wealth & asset management underlying net income(1): $474 million, up $17 million or 4%.
Group - Health & Protection underlying net income(1): $345 million, up $60 million or 21%.
Individual - Protection underlying net income(1): $306 million, up $9 million or 3%.
Corporate expenses & other(1): $(109) million net loss, consistent with the prior year.
Reported net income of $1,348 million increased $477 million or 55% from Q3'23; reported ROE(1) was 23.8%.
Assets under management ("AUM")(1) of $1,515 billion increased $175 billion or 13% from Q3'23.
Increase to common share dividend from $0.81 to $0.84 per share.
"Sun Life had a strong quarter with more than $1 billion in both underlying and reported net income, showcasing the strength and diversity of our businesses," said Kevin Strain, President and CEO of Sun Life. "These results reflect our leadership positions in asset management and insurance, driven by strong insurance growth, and a return on equity of close to 18 percent. Our results demonstrate our resolve to deliver on our Purpose to help Clients achieve lifetime financial security and live healthier lives."
Financial and Operational Highlights
Quarterly results
Year-to-date
Profitability
Q3'24
Q3'23
2024
2023
Underlying net income ($ millions)(1)
1,016
930
2,891
2,745
Reported net income - Common shareholders ($ millions)
1,348
871
2,812
2,337
Underlying EPS ($)(1)(2)
1.76
1.59
4.98
4.68
Reported EPS ($)(2)
2.33
1.48
4.83
3.97
Underlying ROE(1)
17.9 %
17.7 %
17.2 %
17.6 %
Reported ROE(1)
23.8 %
16.6 %
16.8 %
14.9 %
Growth
Q3'24
Q3'23
2024
2023
Wealth sales & asset management gross flows ($ millions)(1)
41,915
39,324
135,075
128,070
Group - Health & Protection sales ($ millions)(1)(3)
445
374
1,467
1,483
Individual - Protection sales ($ millions)(1)
730
669
2,240
1,784
Assets under management ("AUM") ($ billions)(1)
1,515
1,340
1,515
1,340
New business Contractual Service Margin ("CSM") ($ millions)(1)
383
370
1,167
872
Financial Strength
Q3'24
Q3'23
LICAT ratios (at period end)(4)
Sun Life Financial Inc.
152 %
147 %
Sun Life Assurance(5)
147 %
138 %
Financial leverage ratio (at period end)(1)(6)
20.4 %
21.8 %
___________
(1)
Represents a non-IFRS financial measure. For more details, see the Non-IFRS Financial Measures section in this document and in the Q3'24 MD&A.
(2)
All earnings per share ("EPS") measures refer to fully diluted EPS, unless otherwise stated.
(3)
Prior period amounts related to U.S. Dental sales have been restated to reflect new information.
(4)
Life Insurance Capital Adequacy Test ("LICAT") ratio. Our LICAT ratios are calculated in accordance with the OSFI-mandated guideline, Life Insurance Capital Adequacy Test.
(5)
Sun Life Assurance Company of Canada ("Sun Life Assurance") is SLF Inc.'s principal operating life insurance subsidiary.
(6)
The calculation for the financial leverage ratio includes the CSM balance (net of taxes) in the denominator. The CSM (net of taxes) was $9.9 billion as at September 30, 2024 (September 30, 2023 - $9.3 billion).
Financial and Operational Highlights - Quarterly Comparison (Q3'24 vs. Q3'23)
($ millions)
Q3'24
Underlying net income by business type(1)(2):
Sun Life
Asset Management
Canada
U.S.
Asia
Corporate
Wealth & asset management
474
344
101
—
29
—
Group - Health & Protection
345
—
172
173
—
—
Individual - Protection
306
—
102
46
158
—
Corporate expenses & other
(109)
—
—
—
(17)
(92)
Underlying net income(1)
1,016
344
375
219
170
(92)
Reported net income - Common shareholders
1,348
644
382
339
32
(49)
Change in underlying net income (% year-over-year)
9 %
4 %
11 %
18 %
2 %
nm(3)
Change in reported net income (% year-over-year)
55 %
140 %
5 %
157 %
(85) %
nm(3)
Wealth sales & asset management gross flows(1)
41,915
36,259
3,755
—
1,901
—
Group - Health & Protection sales(1)
445
—
124
300
21
—
Individual - Protection sales(1)
730
—
112
—
618
—
Change in wealth sales & asset management gross flows
(% year-over-year)
7 %
6 %
11 %
—
14 %
—
Change in group sales (% year-over-year)
19 %
—
4 %
26 %
31 %
—
Change in individual sales (% year-over-year)
9 %
—
(24) %
—
19 %
—
(1)
Represents a non-IFRS financial measure. For more details, see the Non-IFRS Financial Measures section in this document and in the Q3'24 MD&A.
(2)
For more information about the business types in Sun Life's business groups, see section A - How We Report Our Results in the Q3'24 MD&A.
(3)
Not meaningful.
Underlying net income(1) of $1,016 million increased $86 million or 9% from prior year, driven by:
Wealth & asset management(1) up $17 million: Higher fee income in Asset Management, Asia, and Canada, partially offset by unfavourable credit experience in Canada.
Group - Health & Protection(1)(2) up $60 million: Strong business growth in U.S. Group Benefits and Canada, higher fee-based income in Canada, and improved group life mortality experience in the U.S., partially offset by lower U.S. Dental results.
Individual - Protection(1)(2) up $9 million: Business growth in Asia and Canada partially offset by unfavourable mortality experience in Asia.
Corporate expenses & other(1) were in line with prior year.
Reported net income of $1,348 million increased $477 million or 55% from prior year, driven by:
A decrease in SLC Management's estimated acquisition-related liabilities(3); and
The increase in underlying net income.
Favourable equity market impacts and improved real estate experience(4) were offset by interest rate impacts.
Underlying ROE was 17.9% and reported ROE was 23.8% (Q3'23 - 17.7% and 16.6%, respectively). SLF Inc. ended the quarter with a LICAT ratio of 152%.
__________
(1)
Refer to section C - Profitability in the Q3'24 MD&A for more information on notable items attributable to reported and underlying net income items and the Non-IFRS Financial Measures in this document for a reconciliation between reported net income and underlying net income. For more information about the business types in Sun Life's operating segments/business groups, see section A - How We Report Our Results in the Q3'24 MD&A.
(2)
Effective Q1'24, reflects a refinement in the allocation methodology for expenses from Individual - Protection to Group - Health & Protection business types in the U.S. business group.
