Sun Life Financial (SLF) NBF’s 24th Annual Financial Services Conference summary

Year in review and financial performance

• Achieved 12% earnings per share growth and over 18% ROE, nearing the 20% target.

• Leadership changes in key regions contributed to strong results in Canada and Asia.

• SOC exceeded the investor rate target, while MFS delivered solid income despite tough flows.

• U.S. business experienced volatility due to healthcare system changes, with Stop-Loss rebounding after a challenging 2024.

• Diversified business model helped offset volatility across segments.

U.S. dental and Stop-Loss business strategy

• Dental business goal remains $5B in premium, but timeline extended due to persistent state business challenges.

• State business expected to remain about half of dental, with margins below 5%; focus shifting to growing higher-margin commercial segment.

• Optimization, not growth, is the mandate for state dental, emphasizing efficiency and selective partnerships.

• Claims management and digital transformation are key to optimizing dental operations.

• Stop-Loss saw record volume after significant price increases, maintaining strong margins and benefiting from competitor challenges.

Asset management and M&A outlook

• Asset management strategy balances public and alternative assets, with SLC targeted for 20% CAGR growth.

• MFS remains core, expected to grow as cycles shift, with no M&A planned for MFS.

• SLC buyouts of BGO and Crescent are imminent, with management equity plans to ensure leadership alignment.

• Bolt-on acquisitions under CAD 500M may occur in Asia or SLC, but focus remains on organic growth and sustainable buybacks.