Sun Life 2015 Annual Report Download - page 37

GB’s reported net income was $324 million in 2015, compared to $290 million in 2014. Operating net income was $318 million in 2015,
an increase of $28 million from 2014. Net income in 2015 reflected positive disability experience, gains from investing activity and
mortality gains partially offset by the unfavourable impacts of high-cost drug claims.
Net income in 2014 reflected the net favourable impact of assumption changes and management actions and gains from investing
activity partially offset by negative morbidity experience.
GB maintained the #1 market share position for overall revenue(1) in Canada while continuing to focus on customer service and
productivity. Client retention remained strong, with cancellation rates at 2.3% of revenue compared to the industry average of 4.3%(1).
Group Retirement Services
GRS is the leading provider of defined contribution plans and defined benefit solutions in Canada, serving over one million plan
members at the end of 2015. Our offering meets the complex plan and service requirements of medium-to-large organizations with
industry-leading technology and expertise, while providing cost-effective solutions to the small employer market. In addition, our Client
Solutions area leverages our worksite advantage to offer voluntary savings plans, including post-employment plans, to those members
exiting their employer-sponsored plans. Other services and product offerings include: investment-only segregated funds and fixed rate
annuities, stock plans, group life annuities, and pensioner payroll services. Our Defined Benefit Solutions business offers an expanding
range of innovative de-risking solutions for defined benefit pension plans such as liability-driven investing, annuity buy-outs and buy-
ins, and longevity insurance to meet the emerging needs of the pension market, further enhancing our leadership position.
Our products are marketed and distributed across Canada by experienced sales representatives in collaboration with a multi-channel
distribution network of pension consultants and advisors and through teams dedicated to the defined contributions and defined benefit
solutions markets.
GRS had reported net income of $152 million in 2015, compared to $121 million in 2014. Operating net income increased to
$149 million in 2015 from $123 million in 2014. Net income in 2015 reflected strong new business gains driven by significant DBS sales
and gains from investing activity.
Net income in 2014 reflected gains from new business and the impact of positive investing activities more than offset by the net
unfavourable impact of assumption changes and management actions reflecting economic reinvestment assumption and future
mortality improvement assumption changes.
GRS’s sales increased to $14.5 billion in 2015 driven by a $5.3 billion DBS large case longevity insurance contract and a $530 million
annuity transaction, large case defined contribution new sales and strong member rollover sales. In 2015, rollover sales from members
leaving their defined contribution plans increased by 40% from 2014 achieving $2.2 billion in sales.
GRS assets under administration of $80.1 billion in 2015 grew by 8% over 2014, resulting from strong net sales and favourable equity
market performance.
2016 Outlook and Priorities
In 2016, we will continue to leverage our leadership position across our core businesses and distribution networks, and build on our
objective of being the leader in financial protection and wealth solutions in our Canadian home market. Shifting demographics, in
particular the aging of baby boomers and their need for financial security in retirement, and the shift in financial responsibility from
governments to individuals, in areas such as health care, are expanding the need of individuals to seek out effective financial
protection and retirement planning solutions. Being a leader at the workplace and in communities across Canada with a full suite of
solutions and advice positions us to continue to benefit from these trends in the coming years.
Our greatest opportunities for growth lie in the accelerated development of our wealth businesses. Over time, we expect this sales
growth to increase the contribution of wealth earnings to SLF Canada. While building new businesses is difficult and requires
significant investment, the early momentum we have achieved is encouraging and validating of the overall strategy. Key areas of focus
include:
• Growing our retail wealth business in Individual Insurance & Wealth through increased sales of our wealth products and services
such as our new group of segregated funds, Sun Life Guaranteed Investment Funds, and our SLGI wealth management solutions
to further strengthen our position in the retirement market;
• Expanding our leadership position in the DBS business through innovative de-risking solutions to meet emerging needs of the
pension market; and
• Further leveraging our worksite advantage to drive growth in our Client Solutions business by deepening our customer protection
and wealth relationships through effective customer touch points and solutions such as the Digital Benefits Assistant to meet our
customers’ needs.
While focusing on the acceleration of our wealth businesses, we will maintain our leading positions in our core business through
investment in distribution, product, customer-focused technology and productivity. Priorities in our 2016 plans include:
• Developing new and enhancing existing products that continue to support our CSF in offering customized holistic financial plans
and solutions to our clients;
• Building further success in the group markets by continuing to focus on customer needs and enriching their experience; and
• Continuing to implement management systems focused on enhancing customer and shareholder value and continuous productivity
and savings initiatives.
(1) Fraser Group, most recently published 2015 Group Universe Report, based on revenue for the year ended December 31, 2014.
Management’s Discussion and Analysis Sun Life Financial Inc. Annual Report 2015 35