Sun Life 2012 Annual Report Download - page 39

First Quarter 2011
Operating net income of $472 million for the first quarter of 2011 reflected continued growth in AUM, gains in the fair value of real
estate classified as investment properties, the positive impact of investment activity on insurance contract liabilities, increases in equity
markets and favourable mortality and morbidity experience. These gains were partially offset by increased losses in the Corporate
segment.
Business Segment Results
In recognition of the pending sale of our U.S. Annuity Business, results from SLF U.S. and Corporate have been presented on both
Continuing Operations and Combined Operations bases. Other business segments have no Discontinued Operations.
In the fourth quarter of 2011, SLF Inc. acquired the minority shares of McLean Budden, its Canadian investment management
subsidiary, and transferred all of the shares of McLean Budden to MFS. Prior to the fourth quarter of 2011, the operations of McLean
Budden were included in SLF Canada. Prior period results have been restated to reflect the results of McLean Budden within MFS.
SLF Canada
Business Profile
SLF Canada is a market leader with a client base consisting of millions of people across Canada. Our distribution breadth, strong
service, technology infrastructure and brand recognition provide an excellent platform for growth. SLF Canada’s three business units –
Individual Insurance & Investments, Group Benefits and Group Retirement Services – offer a full range of protection and wealth
accumulation products and services to individuals and corporate clients.
Strategy
We help clients achieve lifetime financial security throughout their life stages by providing products and advice on insurance and
investments through multiple distribution touch points. We strengthen our sponsor and advisor partnerships with value-added insight,
service and advice. Additional value is created by enhancing productivity and client service.
We will grow our business organically by leveraging our strong brand recognition and client base to offer additional value-added
products and services. Our goal is to be the best performing life insurer in Canada.
2012 Business Highlights
• Individual Insurance & Investments continued to focus on meeting the needs of retiring Canadians through its Money for Life™
concepts, products and campaigns, and moved up to second position in the Canadian retail life market as measured by LIMRA.
Strategic actions taken across both the life and wealth businesses resulted in a more profitable mix of business, including the
launch of a de-risked segregated fund product requiring a lower capital base, the closing of new Guaranteed Minimum Withdrawal
Benefit segregated fund sales in third-party channels, the re-pricing of universal life and critical illness insurance products, and the
launch of Sunflex Retirement Income, an innovative new payout annuity product. We continued to experience sales success with
our participating insurance products. The Sun Life Career Sales Force sales power grew to 3,713 advisors and managers, driven by
improved recruiting practices.
• GB retained the #1 group life and health insurance provider position based on BIF(1). Gross sales remained strong with 7% growth
from 2011. We continued to experience growth in e-Claims, reaching 3.6 million (web and mobile combined), which represents a
42% increase from 2011. GB launched its new employee assistance group benefits product, RightDirections, in partnership with
Solareh.
• GRS continued to build on its leadership position in the defined contribution industry, capturing 50% of the total defined contribution
market activity in the first nine months of 2012(2). GRS was also ranked #1 in total assets across all pension products in the
December 2012 Benefits Canada magazine (based on June 2012 data) and achieved 54% market share in the Defined Benefit
Solutions market (as of the third quarter of 2012)(2).
• As part of our Client Solutions business, we continued to leverage our leading GB and GRS market share, together with our
exclusive Sun Life Financial Career Sales Force, to strengthen group member relationships by providing targeted solutions to
members at the worksite while they are enrolling in their group plans and through ongoing services, at key life events and at
transition.
• SLGI completed its second full year of operations with strong sales momentum and strong fund performance. Sales reached
$2.5 billion and client managed AUM grew to over $6.0 billion. Two-year investment performance was very strong with all twelve
of the original long-term funds ranked above the median and seven of twelve funds ranked in the top quartile for their respective
categories(3). In 2012, SLGI acquired the mutual fund business of MFS McLean Budden and launched the Granite Managed
Portfolios, which are five internally managed portfolios that offer a multi-manager approach with broad diversification and active
management. These portfolios accounted for approximately 30% of 2012 retail gross sales.
• SLGI was named “Fastest Growing Institutional Money Manager”, debuted in the Top 40 Money Manager rankings issue as #33
and was ranked as the sixth largest Capital Accumulation Plan Asset Manager in 2012 in Benefits Canada magazine.
(1) 2011 Fraser Group Universe Report, based on BIF premiums and premium equivalents, for the year ended December 31, 2011.
(2) LIMRA, for the nine months ended September 30, 2012.
(3) Morningstar Canada. For additional information, including the funds’ full performance history, please visit www.sunlifeglobalinvestments.com.
Management’s Discussion and Analysis Sun Life Financial Inc. Annual Report 2012 37