Sun Life 2015 Annual Report Download - page 34

Second Quarter 2014
Reported net income was $425 million in the second quarter of 2014. Operating net income of $488 million in the second quarter of
2014 reflected favourable impact from equity markets, gains from investment activity on insurance contract liabilities, positive credit
experience and business growth, offset by unfavourable impacts from net interest rates, morbidity experience, and expense
experience.
First Quarter 2014
Reported net income was $400 million in the first quarter of 2014. Operating net income of $454 million in the first quarter of 2014
reflected favourable impact from equity markets, gains from investment activity on insurance contract liabilities and positive credit
experience, offset by unfavourable impacts from net interest rates, mortality and morbidity experience, lapse and other policyholder
behaviour and expense experience.
Business Segment Results
SLF Canada
Business Profile
SLF Canada is the Canadian market leader in a number of its businesses with a client base consisting of over six million people across
Canada. Our distribution breadth, strong service culture, technology leadership and brand recognition provide an excellent platform for
growth. SLF Canada has three main business units – Individual Insurance & Wealth, Group Benefits and Group Retirement Services –
which offer a full range of protection, wealth accumulation and income products and services to employers, group members of
company sponsored plans and individuals in their communities across Canada.
Strategy
SLF Canada’s mission is to help customers achieve lifetime financial security throughout their life stages by employing our competitive
advantages of a strong service culture, technology leadership and brand recognition across our core businesses, including Group
Benefits, Group Retirement Services and Individual Insurance & Wealth. SLF Canada is focused on leveraging our core strengths to
accelerate the growth of our wealth businesses to better serve the retirement needs of Canadians.
SLF Canada is the largest provider of benefits and pensions in the workplace in Canada and we aim to further extend our leadership
through unique capabilities such as our Total Benefits offering, innovative member experience technology such as mobile applications
and our Digital Benefits Assistant, and our industry leading customer service culture. SLF Canada is leveraging its worksite advantage
to accelerate growth in our Client Solutions business, which focuses on providing a unique suite of products and services to members
joining and leaving group plans along with a unique bridge to our CSF advisory services. In GRS, our Defined Benefit Solutions
business continues to successfully pioneer innovative de-risking solutions that help to effectively manage pension plan risks for
employers.
Our industry-leading CSF provides holistic financial advice, including a complete suite of insurance, health and wealth products,
through a sales power of over 4,000 located in over 1,200 communities across Canada. Furthermore, our strong franchise and deep
expertise help provide complete financial planning services, estate planning services and comprehensive retirement solutions. We are
growing our presence in the wealth market through the expansion of our distribution and our continued investment in SLGI, whose
mandate is to bring together the best asset managers and innovative investment solutions accessible for investors in either our retail
(advisor-based market) or institutional (group retirement market) business lines.
2015 Business Highlights
We continued to build upon each of our core businesses by maintaining or growing our share of the market across GRS, GB and
Individual Insurance & Wealth.
• GB maintained its leadership position as the top group life and health benefits provider in Canada for the sixth consecutive year
based on overall revenue(1).
• GRS continued to be ranked number one in market share measured by total Capital Accumulation Plan assets(2) and number one in
annuity sales(3).
• Individual Insurance & Wealth retained its first place position in the fixed annuities and critical illness markets at 30.6% and 30.5%,
respectively(3).
• Individual Insurance & Wealth maintained its second place position in the individual life market growing annualized premiums by
19% year over year while the industry grew at 10.3%(3). Insurance sales of $350 million in 2015 grew 16% over 2014.
• SLGI continued to build AUM to over $12.3 billion driven by net sales of $2.1 billion, higher by 26% compared to 2014. SLGI ranked
within the Top 10 in net sales across all industry participants(4).
To further build upon our leadership positions, significant investments have been made to accelerate growth in our wealth businesses
generating strong momentum in each of the following areas:
• Our GRS business recorded total sales of $14.5 billion during the year representing a $5.5 billion increase over the prior year. DBS
led the way with sales of $6.6 billion driven by a $5 billion groundbreaking longevity insurance agreement and a $530 million
combined annuity buy-in transaction.
• Individual Insurance & Wealth sales of our new segregated funds, Sun Life Guaranteed Investment Funds, launched in the second
quarter of 2015, surpassed $250 million.
(1) Fraser Group, most recently published 2015 Group Universe Report, based on revenue for the year ended December 31, 2014.
(2) As measured by Benefits Canada magazine’s 2015 CAP Suppliers Report, based on June 30, 2015 assets under administration, and released in December 2015.
(3) LIMRA, for the nine months ended September 30, 2015.
(4) IFIC, Investor Economics, company reports year to date as of the third quarter of 2015.
32 Sun Life Financial Inc. Annual Report 2015 Management’s Discussion and Analysis