Sun Life 2015 Annual Report Download - page 26

• SLF Asia life and health sales were $535 million in 2015, compared to $451 million in 2014, mainly reflecting favourable currency
impact of $54 million from the weakening Canadian dollar and strong sales growth in Malaysia, the Philippines, Vietnam and
Indonesia.
Total Company wealth sales were $122.8 billion in 2015, compared to $111.5 billion in 2014.
• SLF Canada wealth sales were $14.6 billion in 2015, compared to $13.8 billion in 2014, reflecting higher sales in the individual
wealth business in Individual Insurance & Wealth and GRS.
• SLF U.S. wealth sales were $0.6 billion in 2015, compared to $0.9 billion in 2014, due to lower investment product sales in
International, partially offset by favourable currency impact of $77 million from the weakening Canadian dollar.
• SLF Asia wealth sales were $7.1 billion in 2015, up $1.5 billion compared to 2014, primarily driven by favourable currency impact of
$0.7 billion from the weakening Canadian dollar, increased fund sales in India and higher individual wealth sales in China, partially
offset by lower mutual fund sales in the Philippines and decreased MPF sales in Hong Kong.
• SLF Asset Management sales were $100.5 billion in 2015, increased $9.4 billion compared to 2014, largely due to favourable
currency impact of $13.5 billion from the weakening Canadian dollar and the 2015 acquisitions of SLIM, partially offset by lower
fund sales in MFS.
Benefits and Expenses
Total benefits and expenses were $16.4 billion in 2015, down $7.0 billion from $23.4 billion in 2014.
($ millions) 2015 2014
Benefits and Expenses
Gross claims and benefits paid 14,086 12,816
Changes in insurance/investment contract liabilities and reinsurance assets (net of reinsurance
recoveries)(1) (5,419) 3,592
Commissions 2,100 1,889
Operating expenses 5,037 4,537
Other(2) 571 557
Total benefits and expenses 16,375 23,391
(1) Includes increase (decrease) in insurance contract liabilities, decrease (increase) in reinsurance assets, increase (decrease) in investment contract liabilities, and
reinsurance expenses (recoveries).
(2) Other includes net transfer to (from) segregated funds, premium taxes and interest expense.
Gross claims and benefits paid in 2015 were $14.1 billion, up $1.3 billion from 2014 primarily as a result of the currency impact of
$0.7 billion from the weakening Canadian dollar, higher claims and benefits paid in GRS and GB in SLF Canada, and Hong Kong in
SLF Asia.
Changes in insurance/investment contract liabilities and reinsurance assets (net of recoveries) of $5.4 billion, decreased by $9.0 billion
over 2014. The change was primarily attributable to a decrease in the fair value of assets supporting insurance contract liabilities in
SLF Canada, U.S., Asia and U.K.
Commission expenses of $2.1 billion in 2015 were up $0.2 billion from 2014. The increase was mainly attributable to the currency
impact of $178 million from the weakening Canadian dollar and increased commission expenses in Individual Insurance & Wealth in
SLF Canada and MFS, partially offset by SLF U.S.
Operating expenses of $5.0 billion in 2015 were $0.5 billion higher than 2014. Expenses increased primarily as a result of the currency
impact of $0.4 billion from the weakening Canadian dollar, increases in SLF Canada and SLIM including the 2015 acquisitions, partially
offset by SLF U.S. and MFS. Additional information on operating expenses can be found in Note 19 in our 2015 Annual Consolidated
Financial Statements.
Other expenses of $0.6 billion were largely unchanged from 2014.
Assumption Changes and Management Actions
Due to the long-term nature of our business, we make certain judgments involving assumptions and estimates to value our obligations
to policyholders. The valuation of these obligations is recorded in our financial statements as insurance contract liabilities and
investment contract liabilities and requires us to make assumptions about equity market performance, interest rates, asset default,
mortality and morbidity rates, lapse and other policyholder behaviour, expenses and inflation, and other factors over the life of our
products. We review assumptions each year, generally in the third quarter, and revise these assumptions if appropriate.
During 2015, the net impact of assumption changes and management actions resulted in a decrease of $50 million to reported net
income and a decrease of $9 million to operating net income, compared to an increase of $227 million in 2014 to reported and
operating net income.
24 Sun Life Financial Inc. Annual Report 2015 Management’s Discussion and Analysis